In part one of our Real-Time Pricing Engine blog series, we explore how B2B companies can realize dynamic pricing capabilities without undergoing a costly overhaul of legacy systems.
A little more than a year ago, I penned a blog post about all the hidden pricing pains buried inside legacy ERP systems. That article was inspired by the many limitations I’d observed in different companies’ systems that lead to inaccurate and inefficient pricing practices. The countless creative workarounds and subsequent time wasted on rote manual calculations often prove insufficient to meet the increasing demands of omnichannel commerce.
Simply put, a new era of shopping, buying and selling has run headlong into an arcane and inflexible method of pricing. I closed that article with three options that ERP-constrained pricing departments could pursue:
Grin and Bear It
Accept the constraints of the status quo, often due to the perceived pain of rearchitecting the ERP. Use heavy doses of manual effort and Excel sheets to work around issues when possible.
Wince and Fix It
Undertake a costly and difficult project to get the ERP to function the way you want it to. In addition to the upfront project costs, companies will often have to bring on headcount to maintain and reconcile prices within the ERP going forward.
Invest in a Pricing Engine
Today, I’d like to expand on this third option. More specifically, I’d like to explain why the addition of a real-time pricing engine to support omnichannel pricing is the recommended road.
Bring ERP Back Up to Speed
Your ERP is foundational to your business. It’s the unheralded source of truth that your customer-facing applications and mission critical commercial systems rely upon. For most B2B companies, ERP is also the pricing system of record, housing the data and logic necessary to generate each price that is presented to a customer.
For a long, long time, this worked just fine. But transactional volume is always increasing in an omnichannel setting and your customers expect instant pricing which reflects market realities that the ERP is often unaware of, such as your inventory level or the competitor’s price. The number of calls and calculations needed in complex omnichannel environments, and their degree of pricing sophistication, completely overwhelms the traditional ERP system. B2B companies simply can’t service all the requests coming in from eCommerce, CPQ, CRM, and other applications in a dynamic fashion.
You wouldn’t enter a 1934 Duesenberg in the 2021 Indy 500, but it’s also impractical to drop in a brand-new top-of-the-line engine in the middle of the race. So, if you can’t completely revamp an entrenched ERP, what’s the answer? It’s what we call the Zilliant Real-Time Pricing Engine™.
Removing the ERP’s Burden
With our Real-Time Pricing Engine, customers can harness the valuable price logic that already exists inside their ERP systems, while leveraging a robust API service to calculate and deliver dynamic pricing anywhere at any time. In a nutshell, Zilliant Price Manager™ replicates the ERP’s logic so that calls for pricing can be supported by a more flexible, third-party system. Now all the list prices, customer agreements, discount structures, multipliers, cost calculations, pricing formulas, and more reside in a flexible, cloud-native price management application and prices can be calculated and delivered in real time. This doesn’t necessarily mean that pricing logic in an ERP becomes obsolete; rather a third-party pricing engine can act as a supplemental price engine to support dynamic pricing use cases.
It’s a more flexible approach to ensure pricing meets complex market dynamics and customer expectations in real time across channels. With this robust pricing engine at hand, it’s possible to dynamically adjust prices based on incoming competitive data and calculate and deliver market-aligned prices. It can retrieve prices from a price optimization solution in real time. And it can automate online pricing negotiations between a supplier and a buyer.
From Traditional to Digital at Warp Speed
This approach allows you to modernize to the digital commerce age without scrapping legacy systems or embarking on a costly ERP overhaul. In our next post in this series, we’ll explore in depth the ways in which a real-time pricing engine gives B2B companies a competitive edge in the omnichannel paradigm. Read part two here.