Could Pre-Internet (non-cloud) Pricing Software be Costing You Millions? (yes, the answer is yes)
July 10, 2019
Running pre-Internet pricing software is like watching money walk out the door. This is money you could be using to improve processes, hire more people, or buy new equipment. You have to ask yourself, “Why do I continue to ‘throw good money after bad’ by retaining my current software or by thinking of upgrading my present system when there is a better solution?”
On-Premise Software Is Costing You
By continuing to use on-premise pricing software, you are paying between $350,000 and $1 million for yearly maintenance contracts. Costs frequently run as high as $2 million when you add downtime and lost resources.
Pre-Internet pricing software solution providers know that they need to move their customers from an on-premise to a cloud-native solution because the cloud is faster to implement, offers better customization, and costs are fairer.
Migrating from On-Premise to Cloud
If your on-premise vendor suggests you switch to a cloud version of their software, it may sound like a good idea but it isn’t for a number of reasons:
- If you switch, it means you carry the burden of the software not being agile in the first place.
- The vendor’s cloud solution will have limited capabilities and may not be homogeneous.
- The migration path is usually a lengthy process due to the problems of:
- Mapping business objects from an archaic ERP business model to the new cloud solution
- Moving integrations from a rigid architecture to the new solution
- Implementations are typically lengthy, expensive, and complex due to heavy engagements with the implementation team.
- From a financial standpoint, you end up bearing the cost of migration along with the subsequent cloud subscription fees
You also have to consider the following:
- Hardware costs will be in the low- to mid-six figure range, plus maintenance (15-25% of the initial implementation costs).
- You will need a server cluster; and if you want high-availability (HA), you will need another server cluster that runs in parallel.
- Database licenses usually cost more than $100K. If your database license (Oracle, SAP HANA, etc.) has compatibility issues, you will be forced to extend your license or invest more technical resources to make it compatible.
- Upgrades cost upwards of $100K. (Vendors often treat each upgrade as a new project with a minimum cost of $100K, which does not include new features or consideration of business requirements.)
Typical On-Premise Systems
If you are running an on-premise system, it originally worked well. It was accessible and relatively convenient. But with rapidly changing environments, including instant upgrades and security concerns, it has become less than optimal for the following reasons:
- Most on-premise systems have archaic landscapes that are disparate and complex.
- Your system includes dependent upgrades (App Server, DB Server, Web Server) to support the vendor’s on-premise solution, which often produces downtime and a subsequent negative user experience.
- Any system upgrades and patches create additional costs for your in-house resources.
- Performance challenges require extensive timelines and additional resources to address.
- A system operating with little standardization leads to uncontrolled processes, which further downgrades the user experience.
- Streamlining requires manual effort and workarounds, with the accompanying lost time and energy.
Because Pricefx is cloud-native, we are not playing catchup with the rest of the world and we don’t have to pass along the costs of migration to our customers.
We already have our own servers, so implementation costs are more reasonable.
We buy our own DB licenses, so the customer does not have to foot the brunt of those costs.
Upgrades are automatic and don’t require a new project for each implementation.
The Pricefx Advantage
To help drive businesses like yours, we built Pricefx on a singular platform that supports all the functional modules. This provides a unified UI experience across our rich set of pricing solutions. Simplified processes mean increased efficiency for everything in your company related to pricing – using our solution framework allows your company to gain complete insight into profitability at every step of decision-making about pricing.
Being cloud-based means we provide the fastest upgrades and fixes. We roll out updates to the system automatically as soon as they are available with no maintenance downtime, and convert seamlessly to the next release, including improvements and new features. (From our end, this ensures all our customers are on the latest version.)
What does this mean financially for your company? You save thousands of IT hours and dollars, which free up those resources and allow greater focus on business value. When you look at all the maintenance costs that you are paying on an annual basis for on-premise software compared to what you would pay for Pricefx for one single platform, yearly savings can range anywhere from $500K to $2M. This is money your company can use for new hires, better equipment, or other necessities.
Pricefx has CPQ; Price, Rebate, and Promotion; and Management and Optimization solutions with advanced analytics and Pricing IP, all operating on a single SaaS platform. Our cloud solutions utilize the lowest infrastructure cost while instrumenting solutions that boost your company’s performance and revenue.
Check out these additional features:
- Hyper-productivity by focusing only on business logic
- A platform that increases your team velocity through its UI configuration engine
- Two to four times faster implementation compared with other pricing solutions
- Incremental starts in small implementation cycles to realize success early and mitigate dependency risks
- Solution templates that your company can reuse across our engagements
- Leverage from our industry or a vertical-specific, templated solution set instead of having to develop something from scratch
- The ability to configure and extend with your differentiated pricing IP that can be injected into your platform
- Built-in cloud, native best practices that we have incorporated from day one of our inception
- Help in gaining the competitive advantage from our integration solutions that offer microservices
- An integration manager called PlatformManager that provides a simple setup of integration events and triggers so you can process business events quickly and deliver more value to downstream applications
- Architecture that can scale out horizontally to meet your enterprise needs elastically with little or no maintenance
Implementation Approach for Migration
Pricefx’s agile methodology drives incremental value with every three-week sprint while accelerating your time-to-profit realization. This methodology features a lean resource model for customer teams to drive enablement. Aspects of the model include:
- Business analyst/product owner-driven functional mappings
- Technical architect/IT owner-driven integration mappings
We hand over functional and technical future-state diagrams one week after the initial workshop so you quickly receive our take on how to address your needs. We clearly communicate our solutions, vision, and value to all stakeholders.
Team Pricefx is happy to meet with your company representatives and discuss in detail the advantages we have to offer. We are in the business of helping companies like yours achieve the best pricing solutions. Contact us today, so we can start you on the road to savings by using up-to-date cloud solutions. Pricefx welcomes all inquiries.
Interested in learning more about how our pricing solutions can help you?
Sign up for our newsletter and we’ll send you more insights!