Enterprise Pricing Software: 5 Signs You Aren’t Ready for It
February 7th, 2024 | 6 min. read
Here at Pricefx, as the leading enterprise pricing software solution on the market, we take our customer vetting process seriously. To reap the full rewards of our solutions (of which there are many), companies should need them in the first place – and more importantly, are at a place in their pricing journey to be ready for the change.
In this article, we’ll provide five key factors to consider before buying a pricing software solution to provide clarity on what the right candidate looks like. Think of it as a matchmaking exercise – but with advanced pricing technology.
Ready? Let’s dive in.
5 Factors to Consider Before Taking on Enterprise Pricing Software
Taking on pricing software isn’t cheap, so the solution should offer enough value to your organization for the investment to make sense. To help, consider these five critical factors that determine whether your company is ready for an enterprise pricing software solution.
1. Pricing Maturity
To gauge whether a pricing software solution is the right fit, first consider where your company stands in the evolution of its pricing strategy.
For instance, if your organization is managing well with a basic cost-plus strategy, a pricing solution’s multi-factor price segmentation and AI-driven price optimization is likely irrelevant to its current needs. In this case, a simple formula in Excel could accomplish that task with the same degree of efficiency.
On the other hand, if your company has a broad customer and product portfolio that demands sophisticated algorithms to land at the right price, introducing these capabilities to your pricing process would prove effective in safeguarding profits and overall competitiveness.
More fundamentally, you’ll also need to take a step back and ask yourself whether you have a clear pricing structure to begin with. Pricing solutions aren’t consultancy tools – they execute tasks based on your direction. If that direction is unclear or lacking, they won’t offer the tailored support your company needs to grow.
If this sounds like your company, consider working with a consultancy company before taking on pricing software to design a clear strategy that aligns with your business goals and ensures effective implementation. This approach not only helps the pricing solution meet your objectives but also avoids the headaches and frustration that pricing and sales teams will face when trying to use the tool strategically without the right guidance.
2. Technological Setup and Maturity
Next, conduct an audit of your current technological setup. Which pricing tools have you used historically, and how big of a jump would a transition to enterprise-grade pricing tools require?
For example, if your business manages pricing solely with Excel spreadsheets and email, it may need to do a lot of heavy lifting to prepare for pricing software – both technologically and culturally. Likewise, you might already have a homegrown pricing solution in place that doesn’t necessitate a SaaS product right away.
But that doesn’t mean your company isn’t ready for pricing software—it just might take a bit longer to secure buy-in and get everything up and running.
Understanding the current state of your data infrastructure and how it aligns with pricing software requirements is key. Consider how much of an overhaul your technological infrastructure would pricing software require, and how compatible your existing systems are with a cloud-based pricing solution. If integration will be a lengthy effort but there’s a need to see return quickly, it may not make sense to jump the gun with pricing software.
3. Business Profile
As the name suggests, enterprise-level pricing software tends to cater best to companies with expansive operations and a global presence.
Where does your company fall on the spectrum—does it lean towards being a locally-focused business, or does it tend more towards a multinational corporation?
If your business is a mid-sized or large enterprise operating in multiple markets, that’s a good sign that a pricing software subscription would be worth your while, simply because many of its use cases cater to the many challenges faced by larger businesses, such as advanced analytics and scalable, streamlined management tools for extensive product lines.
In the same way, smaller companies might find that an enterprise-grade solution isn’t ideal until they scale up. In the meantime, opting for simpler tools could be just as efficient and more cost-effective.
4. Customer and Product Portfolio
Likewise, turn to your current customer and product portfolio. If your company only has a handful of customers and legacy products, pricing software doesn’t make much sense at this stage.
Until your customer and product portfolios reach a complexity (i.e., thousands of SKUs, customer, and market combinations) that spreadsheets or other straightforward tools can’t handle, a data-driven solution may not be the most practical choice.
5. Organizational Alignment on Goals and the Need for Pricing Software
Achieving organizational alignment, from the top-down and across departments, on strategic priorities and the role of pricing software in addressing them is not only critical for quick adoption, but is arguably the most decisive factor in your company’s readiness for implementation.
If C-level management isn’t actively involved, or budgetary approvals are still pending, this indicates that your company is likely far from initiating a formal buying process or issuing a Request for Proposal (RFP).
Even if there’s clear alignment on the strategic goals the software could target between departments, without top management buy-in and the budgetary support to back it up, a quick move to a pricing solution is unlikely.
Choose a Pricing Software Vendor for Your Industry
If your company meets all of the criteria we mentioned, making it a great candidate for pricing software – great! However, beyond ticking off the right boxes, it’s important to recognize that not every pricing software solution is universally applicable to all industries.
Every pricing software solution is designed to tackle certain industry problems better than others. A retail company will likely need a solution that allows it to access real-time data and adjust its prices dynamically, while a chemical company would be more concerned about optimizing agreements for the long term.
Some pricing vendors cater to a single industry – for instance, Omnia Retail and Prysinc for e-commerce pricing, making them a smart choice for retail businesses. Meanwhile, in our case, while we pride ourselves on being industry-agnostic, our solutions are particularly effective for manufacturing, distribution, process manufacturing, and food & beverage price management.
Curious how pricing software could provide your company with the value it needs to thrive in its industry? To find out, head over to our article below:
