Global Leader in Need of Pricing Process Overhaul
A Fortune 500 manufacturer of innovative products that supports almost 20,000 customers for its 2,500 clients some of which are globally known brands offers 100,000+ product solutions. The company’s annual revenue is well over $10B.
Manual Processes Resulting in Slow And Inaccurate Pricing
Client’s production division was struggling with lengthy manual pricing processes that were leading to ungoverned approvals getting caught in email chains and delays in getting price increases out to market.
The mid-sized team of pricing admins and interns were handling price changes manually inside of hundreds of individual excel spreadsheets. Price changes were taking two to three people three to five days to get price changes out to the customer. Human errors were resulting in orders being placed on hold and additional work while they figured out the issue.
The team was also suffering from a lack of visibility; not only could they not confirm that all price changes were sent to the correct customers, but they had no way of verifying that all line items were correctly updated.
Despite having a large pricing admin team, the company was losing money as a result of price-change latency due to manual processes and inaccurate pricing due to human error.
They knew there had to be a better way and started researching pricing software companies. They wanted to streamline and automate their pricing processes and free up their pricing team’s time to be used in more strategic ways.
Client chose Pricefx early in 2020.
Though they realized their new pricing solution would likely positively impact business, the main goal for implementation was to make their pricing processes more efficient:
- Cut order-to-cash time down by enabling price changes to be executed within 24 hours of an index price change
- Eradicate human errors that caused pricing to go on price holds as well as the likely customer friction it was causing
- Reduce the number of pricing people required to complete a price change so they could focus on other activities
Eruption of Efficiency Through Customized Automation
In order to meet our client’s needs, Pricefx implemented its Analytics and Price Setting solutions along with PlatformManager.
During a phase-0 lighting implementation, Pricefx were able to very quickly set up the Product & Customer master data and Transactional data, putting them on the perfect path to move into phase I, during which the partnered team would begin building and customizing the price pages according to company’s specific processes.
These price pages would not only have the ability to mass edit, but would flag any simple errors or lacking information. The pages included a multi-level approval process that involved sending an email to all necessary approvers so they could simply click “approved’ or “denied”. The newly built price page workflow also allowed the approver to add notes in the case the price page was denied, explaining why.
As the pricing team knew that Pricefx was going to help prevent pricing leakage and improve the efficiency and accuracy in their processes, the company had no resistance to the change. And with the support of Pricefx administrators and super users, the team was properly trained on the new system.
Better Processes Protect Margins and Better Visibility Reveals Huge Potential
With their Pricefx implementation, client’s product division was able to meet all of its objectives.
Automated Processes: Replacing manual processes with automation brings improved pricing accuracy and fewer errors – and therefore orders placed on hold – all of which will lead to a better employee and customer experience.
Faster Price Adjustments: The better approval process, with audit-proof workflows with mass edit functionality, allows the team to quickly and efficiently apply price changes across all customers, stemming previous margin leakage caused by pricing latency.
Refined Pricing Team: Automation has meant that our client can reduce its number of interns and re-allocate pricing admins to higher priority activities.
More Strategic Approach: Thanks to in-depth analytics, client will have excellent visibility into their sales and contract data and can become more strategic in how they price in the long term.
Potential Revenue Gains: The ability to get index and market price changes to market faster will likely lead to revenue gains.
In fact, the company has already seen some significant results from the implementation:
25% increase in efficiency and greater productivity: Price changes that used to take two to three employees nearly a week to complete can now be done within a day (typically within hours) with just one or two resources.
95% increase in confidence: The accuracy and delivery of price changes with tracking capabilities led to a massive improvement in employee confidence and will no doubt positively impact customer relationships, too.
There was even an unexpected result of the implementation: The newly automated price pages quickly uncovered that several customers were not hitting their minimum order quantities (MOQs). This was a huge win for our client as these were completely undetected before the start of this project and has unearthed potentially millions of dollars simply through having good visibility and being able to enforce those MOQ’s.