Practitioner Point of view :
Merab Dekano’s professional experience until now has been focused on price optimisation, price execution and price analytics. He has worked with multinational, national and regional companies alike (JCI, Bombardier, Caselex, Mobis Parts Europe, just to name a few). In his various positions, he has successfully led diverse pricing software implementation projects and it is in this context that he wants to share his experience with us at the EPP Aftermarket Forum this year.
Please enjoy this guest post by Merab on 5 things to keep in mind when you are considering investing in Pricing Software :
No large company can truly have efficient control of their products without dedicated pricing software. The sad reality is that most companies operating in the Aftermarket sell an important portion of their products with very low margins and even below cost without actually realising it, until it’s too late.
However, let’s be realistic, pricing software is not the magical answer to all your pricing issues. Pricing software is a tool, a very good tool, but it needs a very skilled ‘craftsman’ too. Pricing software can automate and sustain many pricing related processes (it will certainly reduce headcount needs), but it cannot take over the human job completely! For it to work well, it is a human that needs to tell it what to do.
There are several challenges to overcome before you make the final decision to implement a pricing software:
- Company’s maturity level
- Data integration
- Decision making process
- Reporting needs
1. Company’s maturity levels:
Are you really making a full use of your current ERP system capabilities (which are sometimes very limited from pricing standpoint)? If you do, it means you know what your ERP system is capable of doing and you have probably discovered that you need more. This is when you need to start thinking about acquiring a dedicated pricing software system. Bear in mind that you will still need your ERP system to execute prices in the field, so they have to integrate perfectly.
2. Data integration:
This is probably the most important challenge. The bigger the company, the more dispersed and scattered the data is across all different ERP systems, handcrafted applications, Excel files, etc. Pricing software implementation goes through data integration, which is a necessary but, at the same time, expensive and painstaking process. The more ‘homework’ companies do before starting a pricing software implementation, the more reasonable the costs will be, which will play in favor of ROI ratios. Bear in mind that so called ‘services’ that are related to distinct workshops and data integration and mapping tasks, can cost twice or three times as much as an annual license fee for the software usage. Pricing software companies are not interested in lengthening this phase of the project either. So, do your ‘homework’ before calling up pricing software companies. Your Management, and pricing software companies alike will appreciate it.
3. Decision making process:
Make sure and clear who makes pricing decisions in your company: Finance VP? Marketing VP? Sales VP? Product Management VP? All these options have pros and cons. It is, however, important to have a clear idea, as pricing software will support and sustain whatever culture you have within your organization. Change management may occur, but it usually does not happen overnight. Consider having a specific Pricing VP.
4. Reporting needs:
Do not start thinking about what reports you will need when you are already in the process of implementing pricing software. Save time and define your reports on beforehand. Do not have more than 10 reports configured. Otherwise, you will end up not using them.
Clean your data well before you decide to implement pricing software. Pricing software will be of little use if your input data is not clean. “Crap in, crap out”, they say. You will have to clean your data afterwards anyway, it is much more efficient to do it before the start of the project.
Last, but not least: Enjoy your new pricing software !
It will make your working environment much healthier and joyful. Do not underestimate emotional contribution that a reliable pricing software will provide to your employees.
Join us on 19+20 June in Frankfurt where Merab Dekano and several other top experts will share their experiences in an effort to Drive your Sales in 2013 and beyond !
Early bird special of € 1.100 ends on 18 April — contact firstname.lastname@example.org to register !