Business

Why tech-driven innovation can help companies adapt to changing consumer behaviors

By Ara Gopal, Anaplan

Consumer goods brands competing for customers in Southeast Asia have an unprecedented opportunity to grow and increase market share. Population shifts, such as an expanding middle class, are helping drive the rapid growth of these consumer markets. It is estimated that the urban population in the region will grow by 7% between now and 2030, meaning that there will be millions more consumers with total greater spending power. These consumers are using this spending power to buy different things than they used to, and increasingly online. A Forrester report shows that online retail in Southeast Asia is expected to almost triple in size, from $19 billion in 2018 to $53 billion in 2023.

As the regional economies continue to grow, the opportunities for local brands to cross borders and take advantage of regional markets become more attractive and realistic. The Asean Economic Community (AEC), established in 2015, is helping to facilitate this expansion by creating a highly competitive economic area with a single market and production base, strengthened export capacity and better-integrated regional supply chains.

How can consumer packaged goods companies deal with this emerging new world order while simultaneously ensuring they deliver the experiences customers expect? The answer lies in how organizational teams utilize technology-enabled planning platforms to collaborate.

In order for brands to capitalize on this tremendous opportunity, it is essential to be agile and responsive to consumer behaviors and preferences in each market – and innovate in the face of change. Although strategic business planning has always been necessary for companies to meet the needs of its customers, it has become a monumental effort as the proliferation of data to glean endless insights overwhelms executive teams. Fortunately, technologies have emerged to address these challenges.

New approach to collaboration

Too many businesses in Southeast Asia are still relying on antiquated spreadsheets and methods for business planning. Business leaders in the Asia Pacific recognize planning as a fundamental component of multiple business outcomes. In our recent report on this subject, 94% of executives said they saw planning as critically important for their company. However, they are still facing obstacles in implementing better processes and enhancing collaboration. People, process, and data are seen as key areas that can be improved. This is where a cloud platform for Connected Planning can break down silos and bring plans and data together in one place, making it much easier for management to reach the right decision. Leveraging planning technology helps brands make better business decisions based on data, more efficiently deploy resources, drive revenue with smarter trade promotions and pricing models, and innovate faster — potentially putting new products on the shelf before competitors. As IDC (International Data Corp.) notes, the key is that these planning processes are not done in isolation, but as part of a cohesive, integrated, and enterprisewide whole.

To achieve growth targets for its Asia-Pacific business, an MNC spirits distributor with a multi-brand portfolio wanted greater control over its trade and promotion planning and execution process. The company’s marketing and finance departments had limited visibility into advertising & promotions (A&P) activity and spend across its brand portfolio, markets and strategic imperatives, which restricted capabilities around strategic resource allocation decisions and tracking of KPIs. Additionally, financial management processes, such as reconciling actuals against budget, were inefficient.

The solution was a finance top-down A&P budget controlling marketing plans and expenditure by brand, market, category, and strategic imperative with invoicing matched to purchase orders and integrated to the finance system to manage accruals, prepayments, and accounts payable. Multi-dimensional reporting across business functions facilitates visibility into actual, committed and remaining A&P spend and enables on-demand updates to A&P plans per market as brand strategies change.

A commonplace planning scenario sees resources deployed against a demand plan, only to find reality doesn’t line up with the plan’s predictions. The power of a single connected platform for planning lies in its ability to update the demand plan and see the downstream effects in real-time. Currently, many steps in building, updating and testing the plan are most likely slow, manual and error-prone processes for businesses. A connected plan means these steps can be accomplished much more rapidly and effectively. Integrating required data and forecasting in one place is integral for any business that hopes to keep pace with constantly changing consumer preferences.

Of course, no commercial plan is viable without input from the finance function. Companies that are able to integrate financial planning and analysis with operations should expect to see heightened collaboration, improved data transparency and bolstered productivity. Consumer goods brands in the region need to balance their investment in customer-facing systems like CRM and web analytics with innovative back-office finance processes. A balanced approach to enterprise planning is critical to steering business performance in today’s volatile markets.

Balance in planning also leads to innovation in the finance function — a key factor for progressive companies that want to break out of the pack. A recent survey of global CFOs and finance professionals found that 34% of finance functions are actively pursuing process innovation. However, that leaves 66% of organizations stuck with legacy systems and processes. Many finance professionals feel that the pressure of monthly, quarterly and annual reporting leaves them with no time to pursue the process improvement initiatives that would transform their performance. Ironically the simplest of innovations, such as the standardization and automation of processes, would give them the time they need to look seriously at innovative, time-saving improvements.

As customer behaviors and preferences evolve, and commercial models fight to keep up, Southeast Asian consumer goods companies should adopt technology that enables collaborative, flexible planning and seamlessly integrates with legacy systems and applications. Organizations today can’t afford to be held back by limitations in technology, data, and processes.

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