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Integrating CRM Funds Management with Market Development Funds (MDF)

In my previous document “Funds Plan and Funds in SAP CRM Funds Plan” I had shared details on significance and configuration associated with CRM Funds Plan and Funds. In this document I would focus on how to make use of CRM Funds Management by integrating it with Market Development Funds (MDF) in order to achieve an end-to-end Channel Marketing experience for a brand owner or manufacturer.

Market Development Funds (MDF) represent resources provided by manufacturer to its partners in order for the later to market products of the manufacturer for achieving pre-defined objectives. These objectives can be anything ranging from improving brand awareness, increasing customer base, increasing revenue, promoting products or product categories etc. MDF also enables the manufacturer to synchronize their marketing strategy with that of their partners’ to execute an effective, efficient and consistent marketing program.

SAP CRM MDF assists the manufacturer in utilizing the marketing programs right from planning, to enrollment of partners, through to settling claims raised for partners after completion of the marketing activity. In this document we will touch up on MDF objects like MDF Programs, Initiatives, Budget Reservations and Claims.

MDF Program

The MDF Program is used by the manufacturer to set-up activities that will assist in achieving a medium to long-term business objective and also be effective in managing the processes associated with MDF. It is also a crucial element which defines and executes the co-operative marketing activities which manufacturer wants to run with the partner. Following are few critical aspects of a MDF Program:

  • It can be targeted for one or more partners
  • It can be linked to only one Funds Plan
  • It can have one or more Initiative Templates and Initiatives assigned
  • Products and Product Categories can be linked with MDF programs which are to be part of Marketing activity
  • Field ‘Objective’ in the MDF Program defines the outcome which is sought out by the manufacturer to execute the program in coordination with the partner

The MDF Program can be configured in the path IMG >> Customer Relationship Management >> Marketing >> Marketing Planning and Campaign Management >> Basic Data >> Define Types/Objectives/Tactics


Initiative Templates & Initiatives

Initiative Template is a pre-defined structure for creating an Initiative in an MDF Program. These templates assist the partners in creating Initiatives as these act as a data entry support object to pre-populate or limit the viable selection for certain fields in the initiative object, thus assisting the Channel manager of the manufacturer to control and restrict the initiatives which the partner may create.

In the screenshot below you can find Initiative Template of type ‘Advertisement (Reservations)’being created with an objective of increasing revenues. An ‘Expense Type’ is maintained in an initiative template and this signifies that the initiative which will be created from this template will be considering expenses during co-marketing activities towards the nature of the defined expense type.


Initiative documents the targeted marketing activities by the partner in an MDF Program. It consist information relevant to activities from a marketing perspective and also acts as a point of reference to any related information in funds management and claims management. It is used by the partner to propose a specific marketing activity or a set of marketing activities to be executed to achieve the objects set out by the MDF Program. If manufacturer approves this proposal, the partner will proceed with the execution of the proposal at his/her own expense.

The Initiative object can be configured using the path IMG >> Customer Relationship Management >> Marketing >> Marketing Planning and Campaign Management >> Basic Data >> Define Types/Objectives/Tactics


There is a need to define how the Initiative is going to be used. The usage of the Initiative in a MDF scenario can be Initiative followed by a direct claim OR Initiative followed by a Budget Reservation and then a claim. This setting can be achieved by defining the Initiative usage:


Budget Reservation

A budget reservation carries the information on the amount of money in a particular Fund that has been set aside (reserved) for execution of an Initiative. It can be created manually by partner or manufacturer OR automatically as a succeeding document to an already ‘Released’ Initiative. Once a Budget Reservation is created the system adds the amount that is defined in the reservation to the fund checkbook entry as ‘Pre-reserved’. Once the reservation is approved by the manufacturer then the amount moved to ‘Reserved’ in the fund checkbook entry.

The Budget Reservation can be configured using path IMG >> Customer Relationship Management >> Transactions >> Basic Settings >> Define Transaction Types/Item Categories




SAP CRM Claims Management application assists in creation and settlement of claims associated with MDF, TPM etc. A Claim is nothing but a budget request that consumes funds. Standard offering in SAP CRM in the MDF scenario provides 2 types of claims, Reimbursement Claims or Direct payments.

The claims are created by the partner or manufacturer (on-behalf of partner) after the execution of the marketing activity as defined in MDF program and Initiative. As part of the claim the manufacturer is settling the expenses associated with pre-defined reimbursement rate for the expenses spent by the partner after thoroughly evaluating the outcome of the marketing activity based on agreed KPIs.

Reimbursement claims can be created and approved in the system after the associated Initiative and Budget Reservation  objects are in approved state. The manufacturer is at liberty to decide upon the KPIs which will be used to evaluate the outcome of marketing activities executed by the partner while processing the claim. Once the claim is approved in the system a settlement billing document is created which is then to be used to reimburse the amount back to partner.

Claim can be configured by using the path IMG >> Customer Relationship Management >> Transactions >> Basic Settings >> Define Transaction Types/Item Categories



In order for the system to link the Budget Reservation and Claim transactions there is a need to assign the usage types configured for Initiative with Budget Reservation and Claim transactions.


Now that we have configured the respective MDF objects we can proceed with creation of the same using CRM WebUI. For this please make use of standard Business role ‘CHM-CM – Channel Manager’. In this business role on the left-hand side navigation pane we use ‘Market Dev. Funds’ option.

The MDF Program which will be created will look like below. It is important to note the Objective of the program and assignment blocks ‘Partners’ and ‘Funds Plan’


This is followed by creation of an Initiative using the Initiative Template earlier shown.


As you can see once Initiative is created and Approved, you will be able to create Budget Reservation and Claims from Initiative document directly with the help of specific tabs. Budget Reservation (header/item) thus created can be seen below:



Finally, we create a Claim against the reservation which was created earlier where manufacturer after processing the same will approve it and eventually the expenses incurred will get reimbursed to the partner.



This brings us to the conclusion of this document. As part of this document we have seen how we can utilize the CRM Funds Management and MDF functionality in creating an end-to-end co-marketing experience for marketing activities performed by manufacturer or brand owner along with its partner.

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