Global Leader Outgrows Their Home-Grown Pricing Solution
About the Customer
Headquartered in Germany, our client is a health care solutions provider employing more than 10 000 employees worldwide. As a market leader, our client sells its products and services globally.
Local sales organizations are independent and use either locally home-grown or Excel-based tools to manage their pricing. As a result, the executive team had a very limited visibility into the pricing processes and pricing performance of the company. Local list prices were disconnected and implementation of the corporate pricing strategy at the regional level was effort intensive. In some cases, it turned out to be simply impossible. Moreover, business critical KPIs, such as list price trends or regional list price comparisons, could not be made.
The customer embarked on a journey to find a solution. A pricing project team was established to understand the pricing market and to create an overview of relevant pricing software providers – Pricefx was ultimately selected.
Pricefx now provides a solid framework and its Price Setting capability serves as the IT backbone for the customers’ global list price management process.
Pricefx is integrated with our clients’ ERP system. Prices and all necessary information for price management (material master for example) are updated daily and approved prices are delivered back into the ERP system automatically. The ERP system remains the leading system of record for pricing conditions.
Flexibility for local needs was a huge driver in this project. Due to internal governance policies, local sales organizations are empowered to make their own business decisions. This requires different pricing logic, data set up and information for every sales organization. Pricefx’s framework is adapted for every sales organization depending on its requirements.
The training implementation was planned and ready when suddenly, the Covid pandemic hit! Consequently, a different approach was required and the entire training process had to be handled virtually. Our client was able to self-manage the change process. The cross-organizational team had to clearly define individual roles and their key responsibilities. They were organized and divided between: Global product owner, level 1 and 2, support or local key users, as just a few examples of critical roles that had to be redefined.
In serving as the IT backbone for customer’s global list price management process, Pricefx’s Price Setting capability allowed our client to create a solid framework for price management in select regions. The solution is now being rolled out globally.
The transparency of prices has increased, and the company management now has a much better understanding of how pricing is impacting their business. With the pricing activities becoming more efficient, the pricing team’s resources are being leveraged for more value-add tasks.
Our client has been able to increase its prices in all regions using Pricefx and produce a higher revenue than its non-Pricefx powered competitors. The additional price increase percentage impact is within a range of between 0.3% and 2.5% with an average of around 1.5%.
“We chose Pricefx because of the high focus on configurability and the possibility to drive customization for each sales org.”
Strategy & Commercial Excellence Manager