When an organization is ready to make an investment in pricing technology, there are a host of software vendors in the marketplace offering a variety of solutions. Most vendors offer 3-4 software packages that perform related pricing functions and integrate with both other pricing packages as well as an organization’s existing ERP system. Pricing software packages normally break down into four main categories.
Pricing analytics software is designed to increase your visibility into price and margin data through the use of scorecards, dashboards, and common pricing analyses like waterfall charts, scatter charts, etc. The software generally allows customers to design and save custom reports as well – a great way for companies to institutionalize the analysis frameworks that best help them identify opportunities for margin improvement.
Pricing execution software helps companies accelerate and automate their pricing approval workflow. Many execution programs will begin by “scoring” a potential deal based on pricing, volume, and cost estimates, and then allows companies to route pricing approvals based on deal parameters. (i.e. Companies can configure the software to allow small, high-margin deals to be approved automatically while low negative margin deals can require various approval levels based on size.) In addition to getting customer quotes together more quickly, the software can also provide an audit trail for Sarbanes Oxley requirements – an added bonus for companies who need to fulfill that requirement as well.
Pricing administration software aims to take some of the headaches out of price management. In addition to improving invoice accuracy, many packages in this area allow users to easily perform mass price updates – something many existing ERP systems do not allow. For large companies with hundreds of thousands of pricing records processing price increases more efficiently not only reduces personnel costs, but also allows you to start capturing higher prices faster. Since these activities are highly related to pricing execution work, some vendors lump administration and execution functions together in a single software package.
Pricing optimization software is designed to help companies maximize their profit potentials by identifying optimal prices for certain customer segments in their portfolio. As these modules use patented or proprietary algorithms to identify these segments, optimization software varies between vendors more than the previous three packages.
Companies can decide which package or combinations of packages are right for their needs as well as their budgets. For more information on the importance of selecting the right software vendor please contact us anytime.
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