At a global management consultancy, more than 14,000 people were involved in pricing deals with much of the key data stored in individual computers and emailed by request. Without a central repository for important deal information, the company had no visibility into underperforming clients, resource types or business segments. This lack of insight fostered ad-hoc pricing practices, price inconsistencies and lost opportunities. It also made adherence to best practices difficult to enforce.
Executives realized that in order to improve profitability, the company needed a comprehensive pricing strategy that would incorporate information about price changes in the marketplace and provide the ability to respond dynamically.
The company selected PROS to supply a full suite of price optimization software including a functionality to analyze the historical price performance of deals. With clients in 52 countries, this professional services industry giant needed to ensure its large project teams had up-to-date pricing strategies and the supporting data necessary to collaborate on deals in real time.
The company’s existing tools could not effectively differentiate pricing based on the attributes of individual deals or the skills of assigned resources. As a result, executives were unsure of the appropriate prices to quote. Cost-plus pricing, along with a lack of enterprise-wide insight into fluctuating market demands and effective price levers, meant the company was missing opportunities to increase margin.
Because they relied on offline tools, geographically diverse teams had no access to centralized information that would allow them to cooperatively review deals they were working on. Sales and category managers, who often handled more than 10,000 deals annually, lacked sufficient time to focus on strategic business.
If it was to retain margins and remain in a leading market position, this company had to significantly improve its pricing capabilities. To do that, it needed solid business insights, including integrated cash flow calculations to view the cash position over time, which would enable more effective evaluations of deal profitability. This critical data, combined with greater overall visibility into resource and customer transaction history, would facilitate a consistent and profitable pricing strategy.
The company’s primary objective was to provide its sales executives with the tools to rapidly quote profitable deals. Sales teams needed to automatically apply real-time price adjustments based on attributes of the resources used, such as position and skill level, as well as deal attributes like geographic location. Another key objective was to have a scalable architecture that would enable 14,000 users to work efficiently. The company wasn’t very confident that a PROS competitor’s product could meet this performance challenge.
PROS centralized all relevant data into one easily accessible, high-performance online system: PROS Scientific Analytics pricing solution. PROS configured reports using the Scientific Analytics module to provide a vital feedback loop, enabling the company to identify and act on opportunities for price improvement. With Scientific Analytics, executives could analyze trends and monitor compliance with the company’s best practices.
PROS enables the company’s entire deal team to collaborate online without the risk of using stale information to price deals. The time interval functionality models deals and provides a monthly view of resource utilization and cash flow, vital information for companies with long-term engagements. Additionally, access to all deal metrics empowers users to accurately price deals at every stage of the process from deal creation to negotiation of payment terms and internal approval.
The company utilizes PROS external reporting integration to configure highly customizable deal reports used in its internal approval process. Furthermore, several of the company’s employees have become certified in PROS pricing solution configuration. This makes the company self-sufficient in making updates to the workflow, staying in step with business changes and best practices while continuing to keep the total cost of ownership low.
The company has rolled out the solution globally, with user numbers rising quickly. Early scalability testing has proven to be time well spent. No performance issues have arisen even as the number of users nears the 14,000 mark. Close collaboration between PROS and this company has resulted in impressive product enhancements. One such example is cash flow functionality, a capability critical to the deal review process in the consulting services space. Additional developments resulting from this partnership include time-based deal functionality that enables phasing resources in and out of the deal at the appropriate times as well as deal-level discounts and adjustments.
Deal teams can now collaborate in real time using up-to-date pricing and resource information. The pricing team has taken advantage of the system’s functionality to differentiate prices based on specific client attributes and resources used in the deal. It can make targeted price adjustments in rapid response to changing demand for specific skills. These new capabilities have resulted in increased revenue for many deals and increased win rates where outdated prices were uncompetitive.