Embarking on a pricing initiative with the latest, cutting-edge software might seem like the ultimate solution, but beware, for beneath the allure of innovation lies a minefield of potential pitfalls. These challenges can’t be easily dismissed, and they often surface in the form of lackluster internal user adoption, discrepancies in data cleanliness and readiness, and other unforeseen roadblocks. The journey to successful pricing project transformation involves more than just the acquisition of new tools; it requires a deep understanding of the lurking obstacles and a comprehensive strategy to navigate around them.
At Pricefx and Profit Drivers, we have years of combined experience in standing at the forefront of the pricing industry, and together, we take pride in transforming your pricing functions and deploying innovative software solutions to boost profits and growth in your businesses.
In this article, we delve into key potential pricing project snags that can catch even the savviest businesses off guard, and more importantly, unveil strategies to avoid these pitfalls for a seamless and triumphant pricing journey.
Pricing Software Project Pitfalls: The 3 Most Common Key Challenges Unveiled
In the dynamic world of pricing software projects, certain challenges tend to arise repeatedly. There are recurring challenges that we find most businesses need to overcome:
1. Data Quality & Readiness
The first and most prevalent is the data quality dilemma. In my experience, spanning various projects as both a client and a pricing practice consultant, data consistently emerges as the top obstacle. No organization possesses flawless data, and often, the success of a project hinges on the cleanliness and readiness of the data.
Addressing issues like refining product and customer hierarchies can significantly streamline the project’s progress. It is not uncommon that data quality issues force us to halt implementations mid-way, often leading to delays of up to several months. However, after resolving this, projects almost always experience immediate improved outcomes.
2. Commitment & User Adoption
The second challenge revolves around fostering unwavering commitment across the organization. Without robust executive sponsorship and unanimous alignment on the approach to pricing processes, projects can easily falter. Instances arise where initial enthusiasm dwindles due to differing perspectives, leading to complications.
Cultivating resolute commitment right from the outset can set a solid foundation, ensuring project success and long-term efficacy.
3. Overcoming Internal Resistance to Change
In some ways related to user adoption, a third hurdle often arises from internal resistance to pricing software implementation. Seasoned pricing professionals may resist the shift, relying on intuition-driven pricing or fearing job displacement.
Yet, these concerns overlook the software’s potential to enhance efficiency and decision-making accuracy.
By addressing these apprehensions early on and highlighting the value addition the software brings, projects can avoid unnecessary delays and capitalize on the tool’s transformative capabilities in helping the pricing team shift their focus from processes to strategy and with that, unearthing pockets of value that businesses never knew they had.
More Real-World Pricing Software Project Snags
As we venture further into the unique terrain of pricing software projects, it’s evident that pitfalls often come in unexpected forms. While the previous section shed light on data quality and commitment challenges, the world of pricing projects holds more intriguing surprises.
Over-engineering Workflow Approvals
Imagine that you are at the pre-sales stage, brimming with enthusiasm as you explore the capabilities of pricing software. One of the shining stars is the ability to customize pricing approval workflows to your heart’s content. It’s like having a virtual pricing orchestra that can play any tune you desire. Excitement courses through the team as they envision streamlined approval processes and lightning-quick customer responses.
However, here’s where the twist unfolds. The excitement can sometimes lead to overengineering.
Instead of developing a reasonable hierarchy with, say, three to four approval levels, some organizations dive headfirst into a labyrinthine system with a multitude of layers. Everything seems fine until about the third week into the project when top-tier executives are inundated with special pricing requests. Suddenly, the president himself might chime in, suggesting it’s time to hit the brakes. The once-enthusiastic orchestra begins to play out of tune, and it’s back to the drawing board to simplify and flatten those approval levels.
Paralysis by Fine Tuning Analysis
Now, let’s talk about perfectionism. It’s natural for companies to desire the perfect set of requirements before diving into a pricing project. Who would not want everything to align seamlessly? The catch here is that the pursuit of perfection can lead to endless refinement, often to the point of paralysis.
I have witnessed companies spending years fine-tuning their requirements, only to find that the industry landscape has shifted, internal priorities have changed, or other unforeseen factors have come into play. It’s akin to drawing a map that constantly shifts beneath your feet.
Instead, consider an 80/20 approach—focus on capturing the vital aspects and general needs.This allows you to realize the benefits quicker.
By quantifying these benefits at a broader level, you can embark on the journey with a clearer perspective and the agility to adapt as the project unfolds. These insights underscore that in the world of pricing software projects, sometimes, less meticulousness can pave the way for quicker, more impactful outcomes.
Prioritize with Precision: Avoiding Potential Pitfalls in a Pricing Software Project
Pricing success isn’t just about having the shiniest tool in your arsenal. It’s about strategy, focus, and meticulous planning. In this section, we will unravel two critical steps that can make or break your pricing software journey.
Imagine you are about to set sail on a pricing software adventure. Before you hoist the anchor, here’s a crucial compass: prioritization. In the initial stages, when you’re sketching out your project, gather your team and list the top 5-10 priorities you aim to achieve with this initiative. These are your aspirations, your North Stars. Once you have this constellation, take a step back and fine-tune them to create an ABC list of priorities.
Why is this akin to the treasure map of your project? Well, it serves a twinset of purposes:
First, it provides the much-needed focus. Think of it as your GPS guiding you through distinct phases of implementation. Concentrate on the top priorities to yield quick wins and substantial benefits. Of course, you might reserve the more complex ones for a second phase, but having a phased approach keeps your project on a steady course.
Second, it’s your yardstick for success. As you traverse the pricing software landscape, these priorities will help you measure the value you’re deriving from your investment. They form the foundation for your value realization process, allowing you to track the real benefits as they materialize.
Remember, precise prioritization is your compass in this intricate journey of pricing software implementation.
Smooth Pricing Software Implementation Tips
The pricing software implementation journey is filled with discoveries, challenges, and hopefully, a treasure trove of benefits at the end. In this section, we will delve into two vital tips to ensure your journey remains smooth sailing.
1. The Grand Kickoff: Set the Tone Right
You are about to launch a thrilling expedition, and the success of your quest hinges on the support and commitment of every member of your crew, from the highest-ranking officer to the deckhands. That’s precisely why the kickoff meeting in a pricing software project is akin to the ceremonial christening of a ship.
Primarily, your executive sponsor, the captain of this ship, must take the helm. Their role is pivotal; they need to convey a resounding message that this project is a top priority within the company or organization. This message cascades down, creating a sense of shared commitment from the top deck to the engine room.
Consider your gatekeepers, the key users, and managers, as your seasoned navigators. They’re the ones who will steer the ship through rocky waters and unforeseen storms, adapting to changes as they come—whether it’s the turbulent seas of staff turnover or the unexpected islands of new business requirements.
Remember, this is a journey, not a sprint. With the kickoff meeting, you set the tone for the entire crew, instilling a sense of purpose and unity. So, let your executive sponsor hoist the flag high and declare, “Full steam ahead!”
2. A Navigator for the Data Seas: The Pre-Deployment Manager
In the treacherous waters of pricing software implementation, data can be your most formidable foe. But fear not; we have a secret weapon—the Pre-Deployment Manager.
Imagine having a master black belt on your crew, someone who knows the intricate currents of your company’s data processes like the back of their hand. This seasoned navigator, reassigned to the role of Pre-Deployment Manager, can make all the difference, especially in large organizations with multiple divisions, product lines, and international waters to navigate.
Before you set sail, this dedicated expert can work with various divisions and teams, ensuring your data is shipshape and ready for the journey. They conduct data readiness checks, prepare the crew for the new software’s functional capabilities, and familiarize everyone so that it’s not all uncharted territory when you cast off.
This approach has proven to be the compass that keeps your project on course. By preparing your data and your team in advance, you’re less likely to encounter rough waters or find yourself adrift. Smooth sailing begins with a well-prepared crew and accurate charts. So, consider the Pre-Deployment Manager as your trusty first mate, helping you navigate the complex data seas with ease.
A Key Project Tip: Don’t Let the General Ledger Steer the Ship
As you set sail on your pricing software implementation voyage, here is a crucial tip to avoid steering off course: keep finance, marketing, or pricing onboard from the get-go, and avoid trying to tie the pricing software to your general ledger.
It’s a common pitfall to have finance attempt to tether your pricing software results to the General Ledger or fiscal calendar.
However, remember that the primary objective of pricing software is to empower you to make better pricing decisions, not to conform to the financial calendar’s rigid structure.
Pricing decisions often involve rebates, allocations, and other intricate processes that don’t neatly align with fiscal calendars, especially when drilling down to SKU-level details. While you can certainly gather some general financial results, it’s vital not to get bogged down in trying to force your pricing software into a financial system mold. Pricing software is not a replacement for a general ledger or finance system; it’s a specialized tool designed to enhance pricing strategies.
So, when navigating the pricing software seas, ensure that the finance team understands the software’s purpose and doesn’t attempt to reshape it to fit financial reporting requirements. This alignment will keep your project on course and focused on the true goal: making informed pricing decisions.
Charting the Course for Pricing Success
Now you know that embarking on a pricing software implementation journey is akin to sailing uncharted waters.
It’s essential to be well-prepared, flexible, and open to adapting as the project progresses.
Keep in mind that this journey is not a one-time sprint but an ongoing quest for pricing excellence.
Accept the imperfections in your data and use them as opportunities for improvement.
Embrace change and be willing to adjust your course as you gain insights from your pricing software.
Remember, every pricing project is a journey, and the path to success may wind through various terrains. Be courageous, be adaptable, and most importantly, keep improving your pricing decisions. The real treasure lies not just in the destination but in the continuous pursuit of pricing excellence. Bon voyage!
If you are an organization looking for pricing software with a strong implementation and pricing strategy partnership focus across a range of industries and specialty areas of expertise, then we recommend learning more about thethe Pricefx Advantage Partner Network and the role that Profit Driversplays in it.
Or to learn more about the benefits of partner-led pricing software implementations are so successful, check out the handy article below:
Executive Director-Business Development ,
Matt Meade is the Executive Director-Business Development at Profit Drivers, Inc. Profit Drivers applies best practices and technologies to improve pricing effectiveness on a global scale. Matt has over 20 years' experience as a practitioner of pricing initiatives. At 3M Co, Matt led the business transformation initiative to rationalize hundreds of global pricing solutions to a single global instance and in 2014 achieved over $100 million in benefits to the company. After retiring from 3M in 2014, Matt led the Experis Pricing Practice providing premier software integration services to many large global companies across numerous industries.