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Guide Pricing Strategy and Improve Profits with SAP Software
 

Guide Pricing Strategy and Improve Profits with SAP Software

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The pricing dashboard and analytics available through the SAP Price and Margin Management application by Vendavo deliver powerful pricing insights that can help you realize huge profit increases on ...

The pricing dashboard and analytics available through the SAP Price and Margin Management application by Vendavo deliver powerful pricing insights that can help you realize huge profit increases on your current business.

You can identify new profit-improvement opportunities, gain insights needed to create a comprehensive pricing strategy, understand the impacts of price and volume changes, uncover margin leakage, and more. And because it’s delivered as a rapid-deployment solution, you can get started in as little as eight weeks.

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    Guide Pricing Strategy and Improve Profits with SAP Software Guide Pricing Strategy and Improve Profits with SAP Software Presentation Transcript

    • SAP Solution BriefSolution Extensions Objectives Solution Benefits Quick FactsSAP Price and Margin Managementby Vendavo Guide Pricing Strategy and Improve Profits with Software You Can Implement Rapidly
    • Objectives Solution Benefits Quick Facts Pricing: Using pricing insight to improve the bottom linePricing: Using pricing insight Managing pricing is one of the highest-impact yet least-utilized profitto improve the bottom line improvement strategies. You can boost net (pocket) prices by controlling variables such as volume discounts, price exceptions, and contract negotiations on everything from packaging to payment terms. So how can you get better control over pricing to improve your bottom line? Even small pricing changes can make a big dif- real-time business visualization, and in-depth ference. For example, just a 1% increase in real- analysis needed to uncover ways to optimize ized price can translate into a 10% increase in pricing. And while specialized pricing consul- operating profits. But to maximize the impact tants provide useful insights, they can only of pricing, you need to develop an enterprise help address issues at one point in time – not pricing strategy – and continuously refine every day. pricing decisions based on what’s happening in real time. To address these needs, the pricing dash- board and analytics of the SAP® Price and Most organizations try to tackle pricing using Margin Management application by Vendavo traditional business intelligence tools or spe- – implemented in as little as eight weeks – cialized consulting services. But traditional helps you systematize and automate the art tools don’t give you the pricing frameworks, and science of pricing analysis. 2
    • Objectives Solution Benefits Quick Facts Discover untapped opportunities to improve profitabilityDiscover untapped opportunities SAP Price and Margin Management providesto improve profitability industry-leading, pricing-specific analytics that reveal what’s really happening across yourUnderstand price, volume, business. For example, use role-based, prebuiltand profitability changes dashboards to spot profitability problem areas and track key pricing metrics, such as pocketUse playbooks to address margin margin, price yield, and per-unit margin vari-leakage and rising costs ance, across a variety of dimensions. Generate scatter charts of sales transactions, making itGet started quickly with a rapid, easier to identify outliers – indicators of poten-affordable implementation tial price-improvement opportunities. And at any time, drill down into your enterprise data to learn more, such as: Find out if small customers are •• Which sales rep made a sale •• Which products were sold receiving concessions reserved for •• The customer’s name and classification big customers or salespeople are •• How the transaction compares to sales of similar products to similar customers (for negotiating specialized products example, did you absorb freight costs or at commodity prices. offer discounts and rebates?) As a result, you will quickly identify problems such as excessive discounting, unrecovered costs to serve, and unaccounted-for rebates. 3
    • Objectives Solution Benefits Quick Facts Understand price, volume, and profitability changesDiscover untapped opportunities Pricing decisions are typically made in ato improve profitability decentralized manner by many people work- ing in multiple departments across an organi-Understand price, volume, zation. Because pricing data gets fragmented,and profitability changes you need a way to centralize related data and use it to uncover hidden issues, trends, andUse playbooks to address margin profit-eroding decisions. SAP Price and Marginleakage and rising costs Management supports in-depth, ad hoc analy- sis using prebuilt analytical models that helpGet started quickly with a rapid, you fully understand the drivers of price andaffordable implementation volume changes within any slice of the business. Pinpoint profit or revenue For example, during quarterly account or business reviews, use a causality dashboard underperformance due to mix, to instantly understand the root causes of low price, or volume changes – sales or profitability for any product, region, rep, or customer, from summary level to min- in any slice of the business ute detail. If it’s reported that sales for a cer- and in real time. tain product line are down by 10%, see the exact contributions of price, mix, and volume – all in real time. This way, you can focus on solving problems, not on debating them. 4
    • Objectives Solution Benefits Quick Facts Use playbooks to address margin leakage and rising costsDiscover untapped opportunities Specialized price analytics quickly pinpoint SAP Price and Margin Management providesto improve profitability margin leakage and opportunities to improve pricing “playbooks” – or predefined sets of pricing. For example, your sales team may be structured analytical steps – that help yourUnderstand price, volume, agreeing to terms that, over time, hurt your team find margin leakage and identify serviceand profitability changes bottom line. What if a customer consistently cost issues. The most commonly used play- negotiates based on large promised volumes books come standard with the solution. AsUse playbooks to address margin that don’t materialize? What if they demand your team develops new approaches or uncov-leakage and rising costs expedited shipping, special payment terms, or ers additional insights, they can modify play- special packaging? Should you agree? Will the books or create new ones and share themGet started quickly with a rapid, costs to serve drive profitability too low – or along with reports, pricing insights, and more.affordable implementation even negative? Where should you draw the Sharing accelerates organizational learning line? and helps you scale profit improvements across your organization. Pricing playbooks help your team find pricing opportunities and support organizational learning so you can maximize profit improvements. 5
    • Objectives Solution Benefits Quick Facts Get started quickly with a rapid, affordable implementationDiscover untapped opportunities Because the pricing dashboard and analyticsto improve profitability of SAP Price and Margin Management are delivered as a rapid-implementation service,Understand price, volume, you benefit from a fast, affordable implemen-and profitability changes tation with unparalleled profit-increase potential. Leveraging services from SAP andUse playbooks to address margin its partners, you can start uncovering pricingleakage and rising costs and margin insights in as little as eight weeks.Get started quickly with a rapid, When you need to prove the value of the solu-affordable implementation tion, consider implementing it first in a small SAP customers report profit part of your business – for example, a certain increases of up to 1.5% of product line or territory. Measure the results, and then use the profit improvements total revenue with SAP Price you identify to develop a business case for and Margin Management. supporting expanded use of the solution company-wide. 6
    • Objectives Solution Benefits Quick Facts Maximize your pricing powerMaximize your pricing power With the pricing dashboard and analytics avail- do all this and more – resulting in profitability able through SAP Price and Margin Manage- increases of up to 1.5% of total revenue, as ment, you have everything you need to lay the reported by our customers. foundation for successful price management – now and in the future. Imagine being able to And armed with better insight into customers, create an enterprise pricing strategy, make sales, the cost to serve, and pocket prices, pricing best practices transparent internally, you’ll eradicate ad hoc decisions during con- and centrally monitor pricing decisions across tract negotiations, account planning, territory your business to avoid costly pricing outliers. reviews, and more that end up costing you Imagine having a better understanding of money – rather than making it for you. At the which customers and products are the most same time, you can maximize cost recovery, valuable to your bottom line so you can make minimize pricing errors, and reduce margin informed, strategic pricing decisions. You can leakage. Deploy the solution in as little as eight weeks – and earn a payback of up to US$15 million annually per $1 billion in revenue, as reported by SAP customers. 7
    • www.sap.com Objectives Solution Benefits Quick Facts Summary Solution The pricing dashboard and analytics available •• Analytics to identify pricing opportunities through the SAP® Price and Margin Manage- •• Support for pricing best practices ment application by Vendavo deliver powerful •• Role-based dashboards with prebuilt pricing insights that can help you realize huge metrics profit increases on your current business. You •• Visualization tools to understand revenue can identify new profit-improvement opportu- and profit levers nities, gain insights needed to create a com- •• “Playbooks” to identify root causes and prehensive pricing strategy, understand the corrective actions impacts of price and volume changes, uncover margin leakage, and more. And because it’s Benefits delivered as a rapid-deployment solution, you •• Find opportunities to boost profitability can get started in as little as eight weeks. •• Develop an enterprise pricing strategy that increases margins Objectives •• Recover more costs to serve and reduce •• Enhance profitability by making sound margin leakage pricing decisions •• Identify pricing outliers that represent new •• Negotiate deals that create strategic margin-improvement opportunities advantage •• Make more-informed decisions in negotia- •• Set and enforce effective pricing policies tions, account planning, and more Learn more Call your SAP representative, or visit us online at www.sap.com/usa/solutions /solutionextensions/pricemarginmgt /index.epx. CMP18239 (12/06)Copyright/Trademark | Privacy | Impressum 8 ©2012 SAP AG. All rights reserved.