Chances are that your company is on a digital transformation journey. Have you considered when, or how, to upgrade your pricing software as a key part of that transformation? Kyle Nations writes about why pricing can’t be overlooked in this journey and offers three suggested approaches.
Digitally transforming? When should you upgrade your pricing software?
Most companies we talk to are either planning a major technology transformation, just starting to implement one, or undergoing the mid-to-late stages of a digital transformation – a complete overhauling of mission-critical systems that drive all aspects of the enterprise.
Digital transformation can be a daunting task for everyone in the organization, not just IT. At the heart of many transformation efforts is upgrading core technology platforms like ERP systems to newer cloud-based versions. These efforts require a great deal of planning and consideration of all the systems and processes they touch. ERPs are sometimes considered the very heart of a company's enterprise architecture.
With so many variables to consider in an ERP upgrade, it's important to have an effective roadmap of all the other systems that will be impacted and to understand the timing for their integration and upgrade to ensure success.
Since pricing is such a key driver of every commercial process, it’s essential to understand how new ERP systems will support or require new pricing technology before, during, or after the implementation of the new ERP.
So how do you determine the right timing for upgrading your pricing technology, keeping this in mind? We share some ideas based on work done with clients as they considered timing for new pricing software and related processes within the backdrop of an ERP conversion.
- Purpose-built price management systems are almost always preferred over the basic capabilities of even the latest and greatest versions of ERP systems, and certainly over spreadsheets. Pricing software supports centralized and field pricing teams and typically comes with very specific UIs and workflows for setting and managing prices. It supports the maintenance of global, regional, country, product, category, channel, and customer-specific pricing over time. It also has built-in automated guardrails to support current and future price setting processes. Having these guardrails in place before converting to a new ERP provides capabilities and advantages that come standard in most pricing software but are severely lacking in even the newest ERP systems. Zilliant Price Manager™ is a great option for companies needing to upgrade their price management capabilities alongside a new ERP to better support their current and future price administration needs. And with our REST-based API, moving from one ERP to another won’t require any significant rework of integration points.
- Many companies undergoing transformation are ready to jump to next-gen pricing and deploy AI-based pricing optimization to drive higher margins. Price optimization leverages customer behavior and segmentation, data input sources such as transaction history, current costs, market indices and competitor prices for establishing and executing pricing strategies. Further, constraint-based optimization factors in price elasticity and gives companies the ability to be more profit- or revenue-aggressive at a very granular level. And AI-based price optimization models don’t necessarily need to be completely rebuilt when implementing new ERPs. They can evolve and adapt and are relatively portable from one platform to the next. Zilliant Price IQ® is the very thing that could help your business pay for part of that expensive new ERP system by finding margin growth opportunities of 1-3% in your portfolio of business.
- Upgrading to a real-time pricing engine that can determine prices dynamically may be crucial to avoid the synching and latency issues even the newest ERPs cause to adjunct systems; for example, eCommerce platforms and CPQs. ERP systems generally require internal condition records and rules to execute prices. A roundtrip price request that involves any change to a price without a real-time pricing engine can slow transactions down to a snail’s pace and put undue burden not just on systems, but on the company’s sales and support staff and even customers who are asking for a price. A real-time pricing engine can stand in as a ‘pricing system of record’ and feed prices to the ERP very quickly and reliably. It can even enable automated negotiations – these facilitate customer interactions with sellers and eCommerce portals, providing a deal envelope that can be established and used in lieu of multiple back and forth price requests. Having this real-time engine in place before implementing an ERP removes the headache of figuring out how to extract complex rules-based prices out of the new ERP quickly, and how to get them where they need to be used. Zilliant Real-Time Pricing Engine™ establishes a real-time connection between pricing solutions and your commercial applications — a high-availability, high-performance API application with 99.99% guaranteed uptime.
How to Determine the Right Timing?
When is the right time to launch new pricing software? It sounds self-serving from a pricing software company to say ‘NOW!’...
However, that recommendation does reduce headaches and produces immediate results. Implementing new pricing software ahead of an ERP conversion gets this critical function up and running and ready to support the new enterprise system when it goes live. This sequence can help businesses maximize revenue and margins and gain a competitive advantage now instead of next year or the year after. By upgrading pricing software today, businesses will be better prepared for what’s ahead. This data-driven flexibility can maximize sales and profits in all market conditions and help your company stay ahead of the competition.
Perhaps the best question to ask is…"Why wait?"
If you want to learn more about how Zilliant is helping businesses make the right choice for deploying new pricing solutions within their digital transformation projects, connect with me on LinkedIn, send me an email, or contact our team here.
Kyle Nations is Sales Director for Zilliant helping global B2B companies realize improved financial performance, faster, using advanced technology for optimal pricing & revenue intelligence.