Managing Automation- July 2008

[ J U LY 2 0 0 8 ] Transformation TechWatch Integration [ TRANSFORMATION ] Most executives intuitively know that pricing matters, but few have the tools to determine either how much it matters or how to start fixing it. But that may be starting to change. BY CHRIS CHIAPPINELLI or a long time now, the practice of product pricing has involved more art than science, with product managers and sales professionals governed mostly by what “felt right.” In recent years, however, science has started to gain the upper hand, and the sun may be setting on the era of “pricing by the gut.” In manufacturers’ never-ending quest to turn over every stone that may yield better profits and allay the pressures of a bustling global marketplace, the list of strategies is long and growing: business-spanning ERP systems, lean manufacturing, collaborative networks that tie in partners across the supply chain, and outsourced labor, to name a few. An item that only recently made the list is one that seems the most obvious, at least in retrospect: pricing science. Few variables have a more direct impact on a company’s profit than the price at which it sells its products. Traditionally, executives and sales man- agers viewed the pricing for their products as something of a free-for-all. Since pricing depended on so many unpredictable moving parts, it was best left in the hands of the sales team — the folks with the best read on the prospective customer. And yet, variables that may be too numerous and complex for the average person to process and analyze are a cinch for today’s computer processors, working in conjunction with the right software-based algorithms. And so with the dawn of the new millennium came the dawn of a new niche in enterprise applications — pricing management. With few exceptions, today’s crop of pricing software providers began operations within a year or two of the turn of the century. Many have their roots in California’s Silicon Valley, where entrepreneurs steeped in supply chain and customer interaction applications saw a new opportunity to apply advanced analytics to product pricing. The fraternity includes Metreo, which was founded in 2000 and merged with Symphony in ma July 30 2008 Industries

Table of Contents Feed for the Digital Edition of Managing Automation- July 2008

Managing Automation- July 2008 Contents Take 1 HP's Acquisition of EDS May Face Integration, Global Delivery Challenges Rimini Plans to Woo SAP Support Users Rockwell Steps Up Its Activities in Software Microsoft Targets the Process of Innovation Supply Chain Standouts Honored by AMR Notes Who Are Today's Influential Thinkers? The Robot Revolution Is the Price Right? Without a Trace Harvesting the Suggestion Box Product Scan Advertiser Index Next

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