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The strategic importance of the Price Management function to a business’s profitability cannot be understated. It is therefore very surprising when analyst surveys on this function reveal multiple operational gaps when it comes to managing price execution and enforcement.

• Spreadsheets based Price Management is highlighted as one of the leading causes of price leakage. Most enterprises have reported that they lack a formal, system-enforced governance mechanism to control changes to the Price-Waterfall. Price Management is intrinsically a collaborative function wherein different departments like Cost Accounting, Product Management, Risk Management, Marketing, Customer & Relationship Strategies Management, etc; can independently contribute to the Price-Waterfall. Each of these contributions has to dovetail to a centrally coordinated change governance process that can holistically test the impact of each change on the Price-Waterfall before approving such change. Spreadsheet driven processes are ill equipped to take on such governance responsibility and can easily break which in turn leads to unintended pricing results like under-pricing or over-pricing.



• The lack of strong governance and infrastructure controls around the Price Distribution process also figures as a significant source of price leakage. List Price Enforcement has traditionally been done through the use of Price Sheets. If this process is not managed systematically, there is a high chance that field offices are quoting off out-dated or in-appropriate Price Sheets, thereby leading to price leakage. Furthermore, Price Sheets are captured as spreadsheets, which are limited in the total number of rows they can support. This imposes restrictions on the total number of price points that can be efficiently distributed, even for medium sized organizations with tens of thousands of SKUs.



• Manually enforced Price approval controls during deal negotiation leads to a higher chance of maverick discounting. An informally enforced process for managing special price clearances during deal negotiation can lead to significant price leakages.



• Inflexibility in efficiently managing Pricing Rules for differential pricing is often an impediment in driving transaction specific pricing enforcement. The Price Analytics function may have innovated by identifying many non-product dimensions like customer, competition, risk, channel, but limitations in enforcing these as Pricing Rules nullify the competitive advantage of such innovations, leading to an inability to differentiate prices from one transactional situation to another. Competitors that have this ability to right-price for a transactional situation can take away market share and cherry pick the most profitable transactions.



• Lack of integration with core enterprise systems and processes to serve different process areas like Quoting, Deal negotiations, Account renewals, etc is also an operational gap in analyst surveys, leading to duplication, higher system maintenance costs and delays when introducing changes. To deliver a solution to the above problems, a flexible and powerful Price Management infrastructure is needed. This infrastructure has to be able to support multiple operational challenges encountered by enterprises…



• Consolidate different components of pricing; provide a single anchor for all updates and changes; by organizing all pricing logic and rates within a central repository which serves as the single truthful custodian of all pricing related information. This repository should support any number of pricing components adopted by the enterprise as part of its Price-Waterfall. The logic and rates pertaining to each element of the Price-Waterfall can be independently versioned by date and any number of other criteria like jurisdiction, channel, division etc. This repository can be queried in multiple ways to access pricing information contained within it.



• Efficiently support Price Management and Distribution for thousands of SKUs and millions of Price Points.



• Establish a formal, auditable process for managing special price clearances during deal negotiation.



• Separation of various pricing concerns i.e. functional areas like Costing, Product Management, Risk management, Deal Management, that contribute to the Price-Waterfall. The system enforces this by providing role based controls for accessing and modifying pricing logic and rates. This ensures separation and prevents inadvertent “stepping on toes”.



• GUI Driven, Collaborative, Pricing Definition & testing wherein business analysts and pricing specialists can leverage a GUI based, authoring environment (Workbench) to define and test changes to pricing logic and rates. They can do this without involving any programming staff. Different members of the team can collaborate with each other through email, chat, notes, wikis, discussion boards and use the outcome of those collaborations to finalize on the actual definitions of pricing logic & rates. Once these are defined, they can interactively test the impact of the changes they’ve made through sandbox environments, before sending the change for approval.



• Controlled change & release management wherein any changes to pricing logic and rates, go through a pre-configured series of approval steps before being authorized for release. As part of the approval process, the impact of the change on the entire Price-Waterfall can also be understood. Changes or revisions required to the definitions, can be done at this time. After approval, the change is migrated to a formal deployment process. Audit trails made available on the history of change performed on the pricing logic and rates of each pricing component and on the comments made by the approver ensure changes are tightly controlled.



• On Demand Price Sheet generation by enabling custom price sheets (by product family, region, channel partner, branch location) to be generate-able on demand. The system generates the most relevant price sheets, containing rates, pricing rules relevant to that audience.



• Multi-Dimensional, Transactional Price Calculation Engine for exposing price calculation capabilities as an on demand service to their field staff so that the subjectivity of manually applying rates and pricing logic from a price sheet is eliminated. A central Price Calculation Engine is established to support price calculation requests, in an on-demand manner from different parts of the organization. Based on the context of the transaction (product, customer & risk, region, channel, partner, marketing-program, division, etc) the right rates, pricing rules and formulae are applied towards calculating a price. This can be used to calculate not only price but also other elements like fees, commissions, surcharges & discounts, taxes, etc. This reduces the chances of errors during the manual process of calculating prices.



• Integration with core Enterprise Systems and Processes like Quoting, Deal negotiations, Account renewals, etc. The output of Price Management function is seamlessly accessed by key processes through standardized interfaces.