Choosing The Right Rebate Management Software Partner

Typically, there are a number of interested parties in an organisation when it comes to rebates. Sales, commercial, or procurement functions negotiate the rebates and handle the drafting of contracts and trading agreements. Finance are usually responsible for rebate calculations, accruals relating to rebates, and the payment or claiming of rebates. Senior management and trading partners also need to be able to access timely and accurate reporting on rebate performance.

Having access to a single source of accurate and up-to-date rebate information across the organisation is therefore critical. The value of a rebate platform is therefore in a sense directly proportional to how many stakeholders can access it.

Some rebate management platforms, and ERP suites that offer some rebate management capabilities, are often priced on a per-user or per-seat basis. This can make it very expensive to give access to everyone that needs it, and organisations therefore have to choose between maximising value and keeping costs reasonable.

e-bate does not use a per-user or per-seat pricing model, and offers functionality (Business Intelligence, Portals) that makes it easier to offer the right type of access to rebate information within the organisation and to external stakeholders.

Some organisations claim rebates from suppliers, and we would term these buy-side rebates. Other organisations offer rebates to their customers, and we would term these sell-side rebates. Some organisations need to be able to manage both forms.

Some rebate management solutions, because of how they were originally developed, are only effective for buy-side or sell-side rebates (and indeed are only suitable for the industry sector they were originally developed for). Some that do support both types charge separately for each type of capability, which can make them prohibitively expensive for organisations that need to manage both forms of rebate.

e-bate grew from experience gained with organisations in a number of industry sectors that did both types of rebate. e-bate can therefore manage both forms, and does not charge for them separately.

If the rebates that you manage are simple, then one of the ERP suites that offers rebate management functionality may be a good choice. The advantages of the functionality being tightly integrated with the rest of the application may outweigh the disadvantages presented by only having limited rebate management functionality.

However, over time, rebate complexity has tended to increase as organisations have tried to maximise their effectiveness and prevent trading partners from gaming them. Both the calculation types and the qualification or exclusion criteria can be very complex, and for organisations that have complex rebates, the choice of platform is critical. Generalist ERP suites don’t have the depth of functionality, nor do some of the Pricing Plus Rebates platforms.

e-bate was designed solely and specifically for rebate management, and therefore offers an unrivalled depth of rebate management functionality. As mentioned above, it was designed to cope with the needs of multiple industry sectors that had varied requirements in terms of rebate types, calculation types, qualification/exclusion criteria and other factors like multi-currency and complex multi-layered product hierarchies.

Ironically, having too little data can be as big a problem as having large volumes of data for some rebate management solutions. One reason that organisations persist with spreadsheets despite the administrative effort and risks is that their trading partners can only supply limited amounts of data, often in spreadsheet or CSV form. ERP suites are designed with the assumption that data will be exchanged using APIs or other automated methods, and don’t have the flexibility to cope with data sources like spreadsheets that may vary in format.  

At the other end of the spectrum, some organisations have masses of transactional data that rebates are calculated against. For these organisations, having a rebate management platform that can cope with these data volumes is key – and cope cost-effectively. Some rebate management platforms were not developed with this capability in mind, and while they may be able to ingest large amounts of data they may not be able to process the calculations driven by this data very quickly, and may have a pricing structure that penalises customers with large data volumes.  

e-bate was always designed with both ends of the data spectrum in mind. Data can be uploaded from spreadsheets and csv files, and can adapt to whatever file structures are required. At the other extreme, massive data volumes can be imported into e-bate using completely automated processes, and the calculation engine at the heart of e-bate can crunch that data to provide near real-time rebate calculation outputs even with extreme data loads.  

Rebate management systems typically rely on information from multiple sources. Data is required on customers, suppliers, products, and the transactions (sales, purchases, deliveries) that are used to drive rebate calculations.

This means there are similar considerations around integration as there are with rebate complexity and data volumes. For organisations with a single ERP suite that holds all the data required for rebate calculations, then the benefits of that integration may outweigh the limitations of the suite’s rebate management functionality.

For other organisations, the ability to access data in multiple formats from multiple sources is critical for rebate management. Some rebate management vendors offer APIs or integrations with some popular ERP suites, but these suites are generally not the only applications that an organisation’s rebate management system will need to communicate with. In this situation the organisation will therefore need to get the rebate management vendor to build a bespoke interface. If the vendor is unwilling to do this (or the cost is prohibitive), then another supplier will need to be sourced to build that interface, and it’s unlikely that vendor will be familiar with the rebate management vendor’s software, so building that interface is unlikely to be cheap or risk-free.

Like some other rebate management platforms, e-bate comes with pre-built interfaces to common finance and ERP products. Unlike other rebate management vendors, e-bate has a sister company – Evolved Ideas – that builds bespoke software and is intimately familiar with e-bate. This means that if additional interfaces are required they can be created quickly and cost-effectively.

Some organisations, e.g., Buying Groups, Procurement Organisations, negotiate rebates on behalf of other organisations. This type of business has specific needs when it comes to rebate management – they have to be able to demonstrate value to the organisations they are procuring goods or services for.

This requires specialised functionality that ERP suites and a number of rebate management platforms do not have, and difficulties in meeting these needs is often the trigger for organisations moving away from using spreadsheets for rebate management.

These organisations need to be able to make it easy for their customers to maximise their rebate qualification, and to be able to moderate disputes between their customers and the suppliers they have negotiated group rebates with. For the first requirement, functionality that lets all interested parties see rebate qualification criteria, and any shortfalls in meeting those criteria, is key. For the second, the ability to compare data from multiple sources and facilitate the resolution of any differences between those sources is needed.

e-bate is used by a number of Buying Groups and Procurement organisations in a number of sectors, so it has the functionality to let those customers demonstrate how they are adding value to their customers or members.

Historically, rebates were a nice-to-have that were calculated annually. Increasingly, they are a critical source of income for buyers or a key part of the marketing mix for suppliers, and calculations are needed frequently in order to maximise performance.

Rebates also have to be accounted for accurately and in a timely fashion as they can represent substantial liabilities.

The ability to carry out calculations in real-time is therefore an important consideration when evaluating rebate management vendors. This is particularly important if, as mentioned above, complex rebate calculations and / or high volumes of data are involved. This is an area where ERP suites struggle for the reasons outlined above, and some rebate management platforms can struggle to produce up-to-date rebate calculation data.

E-bate, irrespective of data volumes or rebate complexity, provides real-time or near real-time rebate information, ensuring that rebate qualification is maximised and the financial picture is always up to date.

In an ideal world, the budget for managing rebates would be commensurate with the importance of rebates to the business. As we don’t live in an ideal world, budgets are usually constrained, and a rebate management platform has to be cost-effective and offer value for money.

Apparent low cost is a reason why ERP suite rebate management modules or add-ons can look attractive, but aside from the typical limitations of the rebate management functionality offered by ERP suites, there can be a cost issue. If customisation is needed or additional functionality has to be developed to complement what’s provided natively, costs can rise substantially, and the completed solution may be expensive to maintain and support because it will be unique.

Rebate management platforms vary widely in terms of the budget required to purchase and operate them. Additionally, as mentioned above, factors like user numbers or data volumes can have a dramatic effect on costs with some vendors. Similarly, onboarding and integration costs (for the reasons outlined above) can provide unwelcome surprises

e-bate is not the cheapest rebate management platform on the market, because quality, reliability and scalability have costs, but neither is it the most expensive.

Because it has been designed for maximum flexibility, only configuration is required, not customisation, which guarantees a cost-effective and supportable solution. Additionally, as outlined above, e-bate’s pricing does not penalise customers that have high data volumes, lots of users, or that need to do both buy-side and sell-side rebates.

Replacing spreadsheets or home-grown solutions that have been used for rebate management is sometimes part of a broader initiative to modernise a business.

Just fixing “the rebate problem” would have limited benefits if other aspects of how the business is operating are not addressed.

Most rebate management platform vendors are purely software product companies; they have neither the interest nor the capability to tackle anything outside of the scope of their product. ERP suites may offer an off-the-shelf solution, but aside from offering limited rebate management functionality may not be a good fit for all the functions that need modernising.

This is where e-bate’s relationship with Evolved Ideas offers real advantages. Evolved Ideas’ core business is helping business transform their operations through the use of technology. Evolved Ideas can guide organisations through the process of identifying how technology can help achieve business objectives and then either selecting and implementing off-the-shelf solutions or creating bespoke software that precisely meets the organisation’s needs.