This document discusses value management and how to institutionalize it across a business. It defines value management as creating measurable differential value for customers and maximizing profit capture. It provides examples of how to measure value using perceived value maps and calculated economic analyses. The document also presents several business cases and how to develop a value management capability and competencies. It emphasizes listening to customers to understand price versus non-price decision drivers. Finally, it provides contact information for the consulting firm that authored the document.
Pps Presentation B2 B2 C Screen Versionv2Brsurf2001
Presentation made with good friend and colleague Tom Monheim of Trane/Ingersol Rand, "B2B2C: Price & Value Management Through Tiered Channels"
Procurement dari cost centre menjadi profit centre
Dengan harga harga yang meningkat, namun pendapatan tidak bertambah, strategy cost saving menjadi strategi ujung tombak menjaga profit suatu perusahaan. Procurement cost saving strategy menjadi pilihan yang utama, mengingat procurement menangani 60-80% spending perusahaan (direct & indirect). Peran procurement menjadi semakin strategis, signifikan dan berubah dari cost centre menjadi profit centre.
Financial Services institutions have grown much more complex—including product, process, system, channel, organizational, & regulatory complexity. This is driving significant costs into the organization—especially IT/IS costs—while also impeding the organization’s agility and increasing operational risk. Traditional approaches are not well suited to address this issue. Their tendency to add resources & processes to manage the issue simply adds to the complexity. In addition, bottom-up, boil-the-ocean approaches are overly cumbersome and typically don’t address the broader interactions, where the larger opportunities usually lie. Finally, technology-driven solutions rarely achieve desired results, as they focus on the tool and not the issue. We offer an alternative—a systematic but streamlined, top-down, and multi-dimensional approach to unlock transformational opportunities others would miss
Pps Presentation B2 B2 C Screen Versionv2Brsurf2001
Presentation made with good friend and colleague Tom Monheim of Trane/Ingersol Rand, "B2B2C: Price & Value Management Through Tiered Channels"
Procurement dari cost centre menjadi profit centre
Dengan harga harga yang meningkat, namun pendapatan tidak bertambah, strategy cost saving menjadi strategi ujung tombak menjaga profit suatu perusahaan. Procurement cost saving strategy menjadi pilihan yang utama, mengingat procurement menangani 60-80% spending perusahaan (direct & indirect). Peran procurement menjadi semakin strategis, signifikan dan berubah dari cost centre menjadi profit centre.
Financial Services institutions have grown much more complex—including product, process, system, channel, organizational, & regulatory complexity. This is driving significant costs into the organization—especially IT/IS costs—while also impeding the organization’s agility and increasing operational risk. Traditional approaches are not well suited to address this issue. Their tendency to add resources & processes to manage the issue simply adds to the complexity. In addition, bottom-up, boil-the-ocean approaches are overly cumbersome and typically don’t address the broader interactions, where the larger opportunities usually lie. Finally, technology-driven solutions rarely achieve desired results, as they focus on the tool and not the issue. We offer an alternative—a systematic but streamlined, top-down, and multi-dimensional approach to unlock transformational opportunities others would miss
Cost Modeling for Purchasing - A Fundamental SkillBill Kohnen
Purchasing Teams that effectively use cost modeling to support supplier selection and negotiation can drive significantly better cost results and improve supplier performance. Chief Procurement Officers should set standards and priorities for cost modeling and include it is as part of the training and development of the organization.
Ability to effectively develop and use cost models to obtain results is a key skill for purchasing professionals to develop.
VENDOR EVALUATION - RESOURCE MANAGEMENTVismay Shah
This is the PowerPoint presentation for the Vendor Evaluation Topic in the subject of Resource Management. Resource Management is taught as a subject in various fields of engineering and management. I & my group mates have prepared this ppt as a part of our course curriculum in M.tech Construction Engineering & Management.
Cost Reduction Strategies:Focus and TechniquesThomas Tanel
This is a highly concentrated presentation that addresses the differences among price, cost, and TCO; what cost reduction strategies to focus on; and an overview of various techniques, as well as when and where to use them. Faced with excruciating competitive pressures, many senior C-Level executives require maximum effort from every part of their organization to survive. Today, purchasing, acquisition, procurement, contracting, and supply management professionals must be the most progressive cost reduction oriented group in the company.
For many organizations, senior C-Level executives set forth annual purchasing, acquisition, procurement, contracting, and supply management goals that mandate cost reductions. Regardless of the cost savings, avoidances, or containments achieved previously, you are faced with new cost reduction initiatives and objectives.
To make the goal of cost reduction a reality, we cannot focus solely on the price. We must examine the total cost of ownership to your organization, which means moving beyond the organizational environs to include suppliers, internal customers, other allied business functional entities, and external customers. By working both internally and externally with these stakeholders, cost reduction opportunities will become visible.
A typical purchasing, acquisition, procurement, contracting, or supply management professional will help reduce supplier prices and avoid incremental costs. A good purchasing, acquisition, procurement, contracting, or supply management professional will reduce costs by lowering both costs of acquisition and risks of supply. A great purchasing, acquisition, procurement, contracting, or supply management professional will reduce total costs across the board, increase service levels to the internal customer, make a significant contribution to the bottom line, seek value-added opportunities, and help to delight the organization’s customer. This type of professional also balances supply related costs and cycle time for the lowest overall cost, at the best value, while seeking risk optimization rather than risk minimization strategies.
At the PPS Spring Conference in San Francisco Ed Arnold, VP of Products at LeveragePoint, delivered his presentation "Anyone Can Build a Value Model: Let Me Show You How". Designed to help the audience make better strategic decisions for their organization, he discussed:
- Key concepts for building a value model
- How to use value models to make strategic decisions and craft marketing messages
- How to use value models to create customer-facing value propositions to support sales in capturing value
The talk received a very positive response from the attendees. Enjoy the presentation!
Jerry Chen, partner at Greylock and former VP of Cloud and Application Services at VMware, shares his Unit of Value framework for startups building a go-to-market strategy. He developed this strategy while managing product and marketing teams at VMware that shipped many “1.0” releases, including VMware VDI, Cloud Foundry, and vFabric, and continues to use the framework to evaluate companies as an investor.
Cost Modeling for Purchasing - A Fundamental SkillBill Kohnen
Purchasing Teams that effectively use cost modeling to support supplier selection and negotiation can drive significantly better cost results and improve supplier performance. Chief Procurement Officers should set standards and priorities for cost modeling and include it is as part of the training and development of the organization.
Ability to effectively develop and use cost models to obtain results is a key skill for purchasing professionals to develop.
VENDOR EVALUATION - RESOURCE MANAGEMENTVismay Shah
This is the PowerPoint presentation for the Vendor Evaluation Topic in the subject of Resource Management. Resource Management is taught as a subject in various fields of engineering and management. I & my group mates have prepared this ppt as a part of our course curriculum in M.tech Construction Engineering & Management.
Cost Reduction Strategies:Focus and TechniquesThomas Tanel
This is a highly concentrated presentation that addresses the differences among price, cost, and TCO; what cost reduction strategies to focus on; and an overview of various techniques, as well as when and where to use them. Faced with excruciating competitive pressures, many senior C-Level executives require maximum effort from every part of their organization to survive. Today, purchasing, acquisition, procurement, contracting, and supply management professionals must be the most progressive cost reduction oriented group in the company.
For many organizations, senior C-Level executives set forth annual purchasing, acquisition, procurement, contracting, and supply management goals that mandate cost reductions. Regardless of the cost savings, avoidances, or containments achieved previously, you are faced with new cost reduction initiatives and objectives.
To make the goal of cost reduction a reality, we cannot focus solely on the price. We must examine the total cost of ownership to your organization, which means moving beyond the organizational environs to include suppliers, internal customers, other allied business functional entities, and external customers. By working both internally and externally with these stakeholders, cost reduction opportunities will become visible.
A typical purchasing, acquisition, procurement, contracting, or supply management professional will help reduce supplier prices and avoid incremental costs. A good purchasing, acquisition, procurement, contracting, or supply management professional will reduce costs by lowering both costs of acquisition and risks of supply. A great purchasing, acquisition, procurement, contracting, or supply management professional will reduce total costs across the board, increase service levels to the internal customer, make a significant contribution to the bottom line, seek value-added opportunities, and help to delight the organization’s customer. This type of professional also balances supply related costs and cycle time for the lowest overall cost, at the best value, while seeking risk optimization rather than risk minimization strategies.
At the PPS Spring Conference in San Francisco Ed Arnold, VP of Products at LeveragePoint, delivered his presentation "Anyone Can Build a Value Model: Let Me Show You How". Designed to help the audience make better strategic decisions for their organization, he discussed:
- Key concepts for building a value model
- How to use value models to make strategic decisions and craft marketing messages
- How to use value models to create customer-facing value propositions to support sales in capturing value
The talk received a very positive response from the attendees. Enjoy the presentation!
Jerry Chen, partner at Greylock and former VP of Cloud and Application Services at VMware, shares his Unit of Value framework for startups building a go-to-market strategy. He developed this strategy while managing product and marketing teams at VMware that shipped many “1.0” releases, including VMware VDI, Cloud Foundry, and vFabric, and continues to use the framework to evaluate companies as an investor.
Cost management of kurukshetra university mtechRising Sher
Strategic Cost Management is the cost management technique that aims at reducing costs while strengthening the position of the business. It is a process of combining the decision-making structure with the cost information, in order to reinforce the business strategy as a whole. It measures and manages costs to align the same with the company’s business strategy.
Pricing and innovation New Ventures BC April 2017Steven Forth
Pricing is core to early-stage innovation. Learn the best practices. Combine economic and emotional value. Understand how pricing changes across the technology adoption cycle.
4. ….for Key AccountsHow do you institutionalize Value Management across a business? Wrap-up
5. Value Capture is usually the missing link… 1. Creating measurable, differential value for the value chain 2. Maximizing the profit captured by the enterprise
12. ….for Key AccountsHow do you institutionalize Value Management across a business? Wrap-up
13. How is value measured? Two Schools of Thought “Value is Relative”- - Perceived Value “Value is Quantifiable”- - Calculated Value Decision to use oneor both dependingon the uniquesituation Value maps Price vs. performance Relative market position Waterfall charts Economic Value Analysis Return on investment Tools Alignment of Price and Value
14. School #1: Perceived Value Premium Higher Cost Relative Price Lower Cost Average Worse Value Economy Better Value Fair Value Line Inferior Superior Relative Perceived Value The Value Map shows the position of each competitor in terms of the overall cost versus the overall benefit.
15. School #2: Calculated Value A Value Waterfall is used for estimating the economic value-in-use of solutions. This tool is most effective when your business has a clear economic advantage over a specific competitor or when you are weighing purchase decision (e.g. as a consumer) $ Variance Benefit vs. CurrentSolution Savings Break Even Current Solution
18. ….for Large, High Stakes ProposalsHow do you institutionalize Value Management across a business? Wrap-up
19. Case #1: New Material for Home Insulation 54% of energy in the US is consumed by buildings (residential and commercial) and their construction Department of Energy reports that over 40% of the cost of heating and cooling is lost through uncontrolled leakage through the building envelope Sharp spikes in energy prices in 2008 increased homeowner awareness related to insulation solutions Energy-efficient, or “green” construction is the main trend in the building and construction sector A new technology is available which reduces energy leakage through the building envelope while maintaining or increasing the R value of the insulation in the wall and roof space in conventional homes, relative to traditional fiberglass insulation
20. ValueDrivers One Offer. Four Value Propositions. Scope of enterprise BasicMaterialsManufacturer ResidentialInsulationManufacturer InsulationInstaller ResidentialHome Builder Homeowner CalculatedTotal cost of ownership over an expanding time frame (2-5 years) CalculatedFair trade on order fulfillment activity performed by distributor in return for appropriate margin and inventory turnover CalculatedApplication training and technical support augmented by cooperative marketing spend and effectiveness CalculatedReturn on investment for labor and material inputs during home construction process leading to maximum retail price capture Perceived Value: functional and emotional benefits of reliability“My home is ‘green”
21. Value proposition to the homeowner is clear… “install better insulation in your home and save 25-40% on your monthly energy bill…” Present Value of Future Energy Savings Additional Installed cost of Insulation Elimination of Humidifier HVACSizing Variance Cost/Profit vs. Fiberglass Break Even in x months Current Option: Fiberglass Insulation
22. …but big problem for the Homebuilder Problem: homebuilders don’t understand how to cover the costs of better insulation “Build your homes with our insulation….and increase your cost/home?” Raw Material & Installation Costs Elimination of Humidifier Construction Site Disruption Price Markup on House HVAC Sizing Extra Ventilation Variance Cost/Profit vs. Fiberglass Profit Break Even Current Option: Fiberglass Insulation Homebuilders select and install the majority of insulation used in homes across North America!
35. “The enemy” x Us???? x x price x Relative perceived performance Case #3: Large, high stakes proposal What is the slope of the line for this particular customer scenario? “How does the customer decision making team weigh price vs. non-price decision drivers” How do we assess our “Relative Perceived Performance” for this deal? “What are the non-price decision drivers?” and “What is the relative importance of each decision driver?” How will price be measured by the customer on decision day? “How will the customer evaluate pricing at the moment of truth?”
36. What is the process for acquiring the insight to achieve the right(eous) price? Listening Event
37. Do we understand Big Helicopter Co. ’ s needs? Relationship/Trust 5% Acquisition Cost 50% Engagement Process The details behind the decision drivers at Big 5% Helicopter Co. … . Capability to bring Which means .. Need … new technology 15% Price Cost = price/unit would be willing to consider impact of significant , … Risk Assurance quantifiable issues related to cost - in - use 25% Risk Assurance Technical support needs to be focused on improving the quality o f prototype testing prior to deployment on the new helicopter plat form. Development of mutually agreed test methodology will go a long w ay Absolutes = Product performance and quality toward reducing Big Helicopter Co.. s risk. Must address personal ’ risk s of the buying team as well backup support. ’ — Capability to bring new New technology needs to add saleable features to Big Helicopter ‘ ’ 23 Inc. s products or cost reductions in their process. Being active an d ’ technology involved in cutting edge research has huge perceptual value. Engagement Process Huge issue. They would like a supplier that can explain their systemic approach to full scale implementation. Also, having a dedicated team to support Big Helicopter Co.’s. s team is key. Team members must ’ have been around the block with respect to rotary wing industry. ‘ ’ Relationship and Trust Critical to know who key management are on ongoing basis would — be important to make commitment to executive review on semi - annual basis meetings probably need to be hosted at Big Helicopter Co.. s … ’ European HQ s ’ 24 Share your analysis with the customer…
38. Outcomes of a typical ‘Listening Event’… Ratio of price vs. non-price drivers is almost always quantified “They tell us the slope of their fair value line” The non-price decision drivers are characterized in detail and the relative weights are quantified rigorously “They tell us what their critical non-price decision drivers and trade-offs will be at deal time” They specify the relative importance of list price versus other price values (such as payment terms, currency of payment, etc.) “They tell us how price will likely be evaluated down to the last detail” x “They tell us how to win without leaving money on the table or over-engineering our value proposition” x price x x x performance
41. ….for Key AccountsHow do you institutionalize Value Management across a business? Wrap-up
42. 1 Capability 6 Competencies Value Management 6 Competencies 1 Capability Value Proposition Development Value Chain Analysis To ensure that the positioning of our products and services results in the optimum price/benefit equation relative to competitive alternatives Customer Needs Assessment Perceived Value Tailored Offers Economic Value
49. www.kalypso.com 9/23/2009 The Kalypso Difference Kalypso is a consulting firm focused exclusively on innovation. Our people are leading business professionals who combine experience in select industries with product and process innovation expertise.
50. www.kalypso.com 9/23/2009 Kalypso Capabilities Our services are designed to help companies become more innovative and provide a systemic view of new product & service development.
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