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Pricing and profitability management pros presentation


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Presentation by Theo Slaats, partner at Deloitte at PROS Pricing Seminar April 7, 2011 at Amsterdam Hilton

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Pricing and profitability management pros presentation

  1. 1. Pricing and Profitability Management The CFO’s Important RoleAmsterdam, 7 April 2011
  2. 2. Why are we here? What’s this really all about?• Increased pressure on margins• Need to more effectively manage risk• Speed and consequence of adverse events• Poor information• Silos and fragmentation An imperative to improve price management and profitability © 2011 Deloitte The Netherlands
  3. 3. CFO Priorities and Pricing
  4. 4. You might be wondering ….• How does pricing align with CFO priorities?• What are CFOs top concerns?• How can pricing excellence help?• If you are trying to move a pricing project forward how do you enlist support from CFO?• How can you help your CFO use pricing to succeed in their profitability imperative?• How do you help CFO’s build a bridge between finance and sales when it comes to pricing? © 2011 Deloitte The Netherlands
  5. 5. CFO Priorities Company Challenges Improving/maintaining margins Framing and/or adapting strategy Prioritizing investments Addressing government policy and… Pursuing or responding to M&A…Raising/maintaining customer demand Q4 Talent (availability and cost Q3Managing operations and supply chain… Q2 Projecting and reporting resultsSourcing capital (availability and cost) Managing assets and working capital Morale and staff reductions Other 0% 10% 20% 30% 40% 50% 60% 70% Analytics is a critical focus in achieving these goals Source: CFO Signals Survey Q4 2010. © 2011 Deloitte The Netherlands
  6. 6. CFO PrioritiesCompany Strategic Focus Revenue growth/preservation Direct cost reduction overhead cost reduction capability development Q4 Financing and liquidity Q3 Q2 Asset efficiency Other 0% 10% 20% 30% 40% 50% Analytics is a critical focus in achieving these goalsSource: CFO Signals Survey Q4 2010. © 2011 Deloitte The Netherlands
  7. 7. The Four Faces of the CFOStimulate behaviors Provide financialacross the leadership inorganization to determining strategicachieve strategic Leading Edge business directionand financial and align financialobjectives strategies Threshold Performance Finance CFO Function Focus Triangle Balance capabilities, costs and serviceProtect and levels to fulfill thepreserve the financeassets of the organization’sorganization responsibilities © 2011 Deloitte The Netherlands
  8. 8. CFOs can overcome silos … if you can get their attention• Understanding the roles of a CFO• Why should CFOs care about Pricing?• How do you get pricing on overloaded plates?• “Show me the money!” © 2011 Deloitte The Netherlands
  9. 9. CFOs and Finance as Business Catalysts• Help craft executable strategies that drive shareholder value• Convert abstract ideas, such as “shareholder value”, into tangible goals that managers and employees can understand and act on• Embed finance capabilities and expertise throughout the company• Foster a disciplined, fact-based approach to decision making• Provide a steady beacon for change and transformation Creating value, not just counting it! © 2011 Deloitte The Netherlands
  10. 10. A CFOs perspective on pricing initiatives• The components of pricing should be viewed as related functions, with common measures, best approached in a integrated manner• Common information, processes, and systems should be leveraged• CFOs are happy to help overcome the inertia of “silos”— organizational, functional, process and technology silos. © 2011 Deloitte The Netherlands
  11. 11. Finance has the ability to deliver value inanalytics enabled price management Finance-Supported Analytics Sales & Procurement Business Unit Supply Chain IT Marketing • Spend • Margin • Revenue • Sales, • Technology analysis erosion leakage Finance, investment • Vendor analysis • Revenue Supply Chain planning and management • Pricing driver linked prioritization optimization analytics • Demand/price forecasting • Service level elasticity • New product and customer • Cross-sell/up- introduction profitability sell profitability • Customer and alignment retention and dollarization churn effect © 2011 Deloitte The Netherlands
  12. 12. Contact infoTheo SlaatsPartnerDeloitte Consulting 31 - 6 - 5267 2525 © 2011 Deloitte The Netherlands
  13. 13. Disclaimer:Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is alegally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited andits member firms.Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network ofmember firms in more than 140 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloittesapproximately 170,000 professionals are committed to becoming the standard of excellence.This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, Deloitte Global Services Limited, Deloitte Global ServicesHoldings Limited, the Deloitte Touche Tohmatsu Verein, any of their member firms, or any of the foregoing’s affiliates (collectively the “Deloitte Network”) are, bymeans of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitutefor such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making anydecision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Networkshall be responsible for any loss whatsoever sustained by any person who relies on this publication. © 2011 Deloitte The Netherlands