How a Global Electric Business Added 14 Points to Growth
About the Customer
This company is a global provider of electrical connection and protection solutions. The company operates in all aspects of this business, ranging from its designs, or installations all the way to the protection of equipment, buildings, and critical processes.
Although this company traces its roots to 1903, it was established in 2018 through the separation of an existing electrical business. The company has a revenue of $ 2.5B and with 10 000 employees, it operates globally. However, North America is the most important region, contributing 64% of the company’s revenue.
The Company’s Pricing Challenge
Before the company selected Pricefx SaaS (Software as a Service) pricing software solution, it relied on Excel and emails (for approval workflow) as their major pricing tools. Moreover, every business segment at the company previously managed pricing independently and differently across departments, with pricing consistency lacking across the organization with difficult to track audit trails.
As a result, the company was achieving pricing gains but using inefficient and time-consuming methods. They required software that could provide a specific location where all quotes could be managed and measured with automated workflow that could additionally manage claims and simultaneously globally work across multiple products.
The company’s in-house pricing team worked together with Pricefx to identify the needs in each business segment to ensure that Pricefx software would deliver the desired results in categories like Quote time or Win Rate.
The Pricefx Solution
At the global electrical company, Pricefx solutions are integrated with SAP, M3, MuleSoft, Tacton and Snowflake.
Approved contracts, customer prices/discounts and credits are now sent to SAP and M3 and pricing conditions are received back. List prices are sent to Tacton. Reports travel via Snowflake to Tableau and MuleSoft is used as the integration between M3 and PFX.
Each business segment has different needs based on how the business is managed. Kaizen mapping sessions were done with each segment to map the process. Those maps were then taken through a consolidated mapping process to ensure all the needs were covered.
Pricefx Rebates, Price Setting and Channel Management capabilities are all used out of the box with minimal customizations. Agreements and Promotions and Quoting were highly configured/customized in order to meet the company’s specific needs.
Price Setting
Previously, list prices were created in a multi-tab excel sheet requiring time-consuming analysis to ensure consistency. Now, list prices are updated once and they flow through to all global price lists, saving time and allowing for easier analytics.
Quoting
Quotes created in SAP previously required people to email copies to the team for approval. Now, all quotes created in SAP and sales orders that do not have approved pricing are sent to Pricefx for automated review and DOA management.
Agreements and Promotions
Previously, the sales team did not have the ability to create contracts, only to manually send emails to have them created. Now they enter Pricefx and create contracts and the automated DOA process speeds up the approval process and sends contracts to customers.
Rebates
Rebates were previously managed in Excel sheets. Now they are automated in Pricefx and are updated, and credits are sent automatically.
Channel Management
Claims were previously processed monthly using multiple Excel sheets. Now, all claims are matched automatically in Pricefx and processed quickly.
Results
The company’s cooperation with Pricefx and the implementation of Pricefx’s solutions has been an enormous success. It is not only the connection on the professional level, but also every metric shows how beneficial this project is for the company’s business. Here are the key metrics because the numbers talk louder than words this time:
Price Setting
50% time saving and doubles the accuracy on pricelists. The company can now manage inflation better by passing on the cost increases quickly to their customers.
In 2022, price added 14 points to growth, effectively gaining $333 million in price increase (See slide below).
In the first half of 2023, the company gained a total of $97 million from more effective pricing ($57 million – offsetting inflation and adding 8 points to growth in the first quarter – and $40 million – offsetting inflation and adding 5 points to growth in the first quarter.
Quoting
The sales team now spend 50% less time on quoting, workflow, and tracking. The quote approval time has come down from days to hours.
An estimated 50% saving on quote times and the win rate has increased by 5%.
Agreements and Promotions
A 50%-time savings for Sales Team contract entries.
Channel Management
The Claims team now spends 50%-75% less time processing claims, and the rebate team is experiencing comparable improvement levels.
Other Benefits
Digital Transformation Objectives Achieved: Company-wide objective of Digital Transformation with Real time Pricing and Instant Quoting was realized (please refer to the slide below)
Quote from our customer:
“The Pricefx team was great to work with, they supported us through the whole process. I believe with their support we implemented the software faster than we thought would be possible.”
Company Pricing Director
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