Simply put, price management is the function of creating and updating pricing within a business. It includes setting and managing pricing across a variety of price modes (or types of pricing that can occur in a business) such as list, matrix, negotiation, or customer-specific. Price management also includes updating prices when necessary, managing pricing segments, measuring key performance indicators (KPIs) and more.

For mid- to large-size B2B companies, manual price management is increasingly impractical. Yet, complicated spreadsheets continue to be the go-to method of managing prices, even though this method is not effective in giving pricing teams the control, flexibility and speed they need to respond quickly when price changes are warranted.

Read more: Legacy Systems are Harming B2B - Do This Instead

The number of factors to consider when managing prices on a wide scale has revealed some critical limitations to the traditional approach of using manual spreadsheets and calculations for price management. In B2B, the task of updating prices due to cost changes, margin objectives, or other market factors is an onerous, time-consuming, and manual one, prone to errors and inevitable frustration. Even for the most skilled pricing professionals, simply aggregating the appropriate data into a usable format, having enough processing power to manipulate massive amounts of data, understanding the implications of each price change, and seeking the necessary reviews and approvals can take weeks to complete.

Increasingly, B2B companies are utilizing more robust price management software to help the pricing team tackle price management and administration challenges, streamlining previously burdensome tasks with a flexible, highly configurable price management application.

Read More: Transforming Your B2B Pricing Strategy and Processes (SAP Whitepaper)

How Does Price Management Work in B2B and Why is a Better Way Required?

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