Managing Automation- July 2008

[ TRANSFORMATION ] Transformation Integration TechWatch North America began to use Zilliant’s Deal Manager module, which analyzes historical pricing information, including job size, project type, and geographic territory, to determine the best price for a salesperson to quote. Schneider’s North America sales force quotes 600,000 electrical equipment jobs every year. To initiate the process, they enter information pertaining to the job in the Quote to Cash system by Sybase. To keep from drowning Lyons’ team in pricing requests, sales personnel can choose an “auto-negotiate” function. The system checks the proposed price against preset parameters and issues a go/no-go response. The Deal Manager software enhances that exchange by furnishing an alternate, optimized price. For smaller jobs — which comprise 400,000 of the annual total — acceptance of the optimized price has steadily risen, he says, to a 50% acceptance rate. “That’s a big deal because it makes the whole field sales more efficient; they’re more confident in the price they have.” Doug Woodside, a pricing specialist in Lyons’ department, uses Zilliant upwards of 50 times each day. Before the software was installed, he and his colleagues in the pricing department negotiated with the sales force within Quote to Cash. “You just looked at it, saw what it was we didn’t have any of the inherent information that Zilliant is giving us,” he says. “We can see where the request is priced on a national scale, on a job-size scale,” he says. “There’s an anmanagingautomation.com alytics piece to it that allows you to get really deep if you RELATED ARTICLES: want or need to.” Plugging Revenue Leaks (Plugging Leaks) As to the balance of art and www.managingautomation.com/revenue science, Woodside says, the The Price Is Right www.managingautomation.com/price scales may be tipping toward the latter. “I think we still go Vendors Roll Out New Software Licensing Models (What a Mess! Cleaning Up with our gut, but I think the sciSoftware Pricing) ence that [Deal Manager] gives www.managingautomation.com/licensing us allows us to either validate it or give us a reason to deviate,” COMPANIES MENTIONED: he says. The software can Oracle “bring us back down to earth www.managingautomation.com/oracle3 and give us the non-emotional PROS facts to analyze.” www.managingautomation.com/pros Of course, pricing is only as SAP good as the corporate culture www.managingautomation.com/sap3 that enforces it. “One of the SignalDemand things that the rest of [Schneiwww.managingautomation.com/signaldemand der’s] countries don’t underVendavo stand is the ability to say ‘no’ to www.managingautomation.com/vendavo2 field sales,” Lyons says. Zilliant Sound pricing analytics and www.managingautomation.com/zilliant2 optimization depend mainly on Industries science, but enforcement may still be more art than companies would like to admit. Next up for Schneider North America is to assess salespeople’s adherence to the target prices. “As we go through ’08, we’re going to start looking at how our sales force measures up against the Zilliant target, and prove that the more you adhere to this, the more successful you are with top line and margin,” Lyons says. Tying target price attainment to sales incentives would be ideal, he says, though he has yet to make that case to management. Though L yons calls the implementation of price management software a resounding success, he admits it was a slow and daunting process. “It is not easy to implement something like this,” he says. His advice for those undertaking the journey: Assign a full-time project manager and a full-time change agent to the rollout. BATTLE OF HEAVYWEIGHTS? The experience of global giant Schneider, combined with the hefty price tag for price management applications, may have some manufacturers of slighter build questioning the software’s relevance to them. AMR’s Tohamy says the benefits of using price management strategies grow with the complexity of the business. Generally, only manufacturers with a high volume of products have data sets large enough for pricing software to work its comparative magic. Though the emergence of SaaS software from SignalDemand, in particular, may offer small and mid-sized manufacturers a foot in the door, the on-demand model’s Achilles heel — a reluctance to leave sensitive data in someone else’s care — may be heightened when it comes to highly confidential pricing information, Tohamy says. Still, the pricing market shows signs of strength, even in its infancy. PROS, the market pioneer, went public in 2007. And Vendavo’s reseller partnership with SAP has given the company a credibility boost among potential customers, Tohamy says. SignalDemand’s ability to raise $20 million in a recent round of venture capital financing also bodes well, she says. “I think right now most people would agree that there is enough upside and enough opportunity that at least a handful of the vendors” will survive and thrive, she says. Schneider’s Woodside says pricing tools have given him a more informed perspective. “I have a baseline of information that’s more than I had before, and then if I choose to dig deeper, I can go get mounds and mounds of information to support what I’m looking for,” he says. “I think information is king.” s maonline ma July 32 2008 http://managingautomation.com http://www.managingautomation.com/revenue http://www.managingautomation.com/price http://www.managingautomation.com/licensing http://www.managingautomation.com/oracle3 http://www.managingautomation.com/pros http://www.managingautomation.com/sap3 http://www.managingautomation.com/signaldemand http://www.managingautomation.com/vendavo2 http://www.managingautomation.com/zilliant2

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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