driving profit into every deal with sap price and margin management by vendavo

8/10/2019 Driving Profit Into Every Deal With SAP Price and Margin Management by Vendavo

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Driving Profit into Every Deal with SAP Price

and Margin Management by Vendavo

Prashant Dube, Suite Solution Management SAP

May 14, 2013

Session: 0204



Key Learning Points

Objectives

Illustrate how better pricing at the point of sale can

improve profitability

Solution Overview – SAP Price and Margin Management Integration Overview – SAP Business Suite and SAP

Price and Margin Management

Customer success



2

3

1

4

Importance of Pricing Guidance in Sales

Solution Overview

Integration Overview

Wrap-up

Agenda



Profit can’t be assured bylooking in the rear view mirror



Evolution of B2B sales

Shifting from art to science

Increased cost volatility

Technology

Economy

Sales teams need to leverageenterprise data on the front lines

Executive teams need to delegate

profitability but don’t have the tools

You can no longer take a “set it and

forget it” approach to pricing

Customer More sophisticated buyers

Customers know more than ever

before

Sales needs to know even more!

Macro Trends Implicat ions for Sales

Sales needs the right tools to make

profitable selling decisions at the

point of sale



Profitability

Happens

Profitability

Happens

Moment of Truth Moment of Truth

at theat the



P o s i t i v e >

< N e g a t i v e M

a r g i n %

Deal Price

What you don’t know CAN hurt you! All 30 of the last SAP Price and Margin Management customers evaluated weresurprised to learn they had negative margin transactions, some as high as 30%.

Source: Vendavo Customer Case Studies

Case Study:

Large CPG Company

Findings:

~28% of t ransactions fellbelow break-even

For a $5B company, thissituation could cost asmuch as:

$150M per year

What happens at the Moment of Truth

when you rely on the rearview mirror?

0%

10%

-10%



at the point of sale? at the point of sale? at the point of sale? at the point of sale?



Source: McKinsey

Pricing transformation has real potential..

But how can you get there?



2

3

1

4

Agenda


Solution Overview


Wrap-up



1. Extract profit

insights from

enterprise data

2. Deliver simple,

actionable deal

guidance to Sales

The SolutionThe Solutionis Simpleis Simple

SAP Price &

Margin

Management

by Vendavo

ERPTransaction

History

Transaction

History

Deal

Guidance

Deal

Guidance

CRMCRMCRM

Deal Manager™

Prices

CODCOD



Executives Sales Marketing

CEO

CSO

Sales Manager

Deal Desk

Sales Rep

Product Manager

CFO Pricing Analyst

Pricing Manager

GM

Today: Roles impacted by pricing



• Profit opportunity

identification, sizing,

and tracking

• Root cause analysis

• Actionable insights

and analysis

• Views for users of

all types

• Manage base prices,

list prices

• Set and manage deal

price and margin

guidance policies

• Manage approval

workflow rules

• Plan and analyze

strategic price moves

Negotiate better customer-specific pricing with

confidence from insights and embedded analytics

Rapidly transition fromstatic to dynamic pricing

Al ign sales behavio rto corporate objective

1

Optimize

23

Uncover opport unit ies to

improve profit s

SAP Price and Margin Management

by Vendavo

CRM



Executives Marketing

Close deals profitablyClose deals profitably

& refine execution& refine execution

Set profitable target

& floor pricesPROFITMonitor &

refine strategy

Sales

SAP Price and

Margin

Management

Bringing the profit team together



Drive More ProfitClose more deals, more profitably

Monitor and Refine ExecutionContinuously uncover additional profit opportunities

Maximize ResultsSet achievable, profitable target prices

1

2

3

With SAP Price and Margin Management

you can:






1

2

3

With SAP Price and Margin Management

you can:



Sales View

Analyst View

Deliver intelligent profitable quotes on the spot directlyin sales quoting process

Driving more profit



Driving more profit

Boost price realization by

empowering your sales

team to negotiate

confidently

Close more profitable dealswith clear insight to targets,

terms, and escalating

approvalsSales Rep

Sales Manager

Head of Sales



Empowered

selling at themoment of truth.

Driving more profit – simplifying sales

adoption






2

3

With SAP Price and Margin

Management you can:



Know what’s

driving bad deals

and track segment

performance withdeal performance

analysis and margin

causality

SAP Price and Margin Management Profit Analyzer™ - Pocket Margin

Enhance your execution



SAP Price & Margin Management Profit Analyzer™ - Guided Analytics

Understand the true profitabili ty of customers andproducts over time with guided analytics




Identify and

track your best

and worst salesperformers, by

revenue and by

deal margin

SAP Price and Margin Management Profit Analyzer™ - Reports




Set optimal prices with

unique Power & Risk™

B2B pricing methodology

Vendavo Power & Risk™ B2B Pricing Methodology

Maximize Results



Segment 1

Channel Direct

Type

Order Size

Discount Variation

Distribution Shape

Pricing at List

Competitive Intensity

Product Scarcity …..

Pricing Power

Unrealized ability to change

prices

Total Sales

# of Customers

Customer Size

…..

PricingRisk

Measure of wh at is at stakefor the business

Segments

Segment 1

Channel Direct

Type

Order Size

RESULTOptimal Pricing Guidance

Target, Stretch, Floor, Approval Levels

SegmentsRegion EMEA

Industry Ind. Mfg.

Order Size < 1,000 units

Step 1

Step 2

Step 3

Step 4

How SAP Price and Margin Management

segments and leverages Power & Risk



Maximize Results

Understanding the pricing science

Quantitative

Segmentation

US Non-US

Chem

-ical

Food

& Bev

OtherMotors

Oil &

Gas

Other

Direct Disti. Other

Valves

Valve

RX23

Valve

RX30

Valve

DX15

1. Segmentation 2. Plugging Pricing Leaks 3. Exploiting Power & Risk

Price

% of Revenue

F l o o r

V P

A p p r o v a l

R e q u i r e d

D i r e c t o r A p p r o v a l

R e q u i r e d

Before

After

$500 $550 $600 $650 $800

Upward pressure on

pricesEliminated

Price

% of Revenue

F l o o r

V P

A p p r o v a l

R e q u i r e d

D i r e c t o r A p p r o v a l

R e q u i r e d

Before

After

$500 $550 $600 $650 $800

Upward pressure on

pricesEliminated

Net Price / List

Price

% of Revenue

F l o o r

T a r g e t

V P

D i r

5. Implementing Pricing Policies 4. Setting Optimized Segment Prices



SAP Price and Margin Management Price Manager™ - Price Console

Implement

intelligent

profitability

ranges with targetand floor prices

and adjust

dynamically

Maximize Results



Faster deal velocity!

Accelerate negotiation and

internal approvals

Increased win rates!

Educate the customer and be flexible when

conditions demand it

Increased deal revenue and margin!Knowing where your bottom is adds to

the top

What can all of this do for your sales team?



Demo: SAP Price and Margin

Management

Demonstration



SAP SolutionExtensions bySolution Partners

SAP Business Suite

Open Ecosystem(Partner ProgramCertifications)

SAP Solution Extensions are subject to the most rigorous evaluation and

qualification processes

SAP Price and Margin

Management by Vendavo

Endorsed BusinessSolutions

SAP solution and partner landscape



Sold and supported by SAP just like any other SAPproduct!

Extension of SAP’s mature quote-to-cash platform

Collaborative product roadmap and integrationplanning

Subject to special “ Premium Qualification” testingprocess for SAP product standards compliance

Customer support directly through SAP OSSsystem

SAP’s solution partner selection processtakes the risk out o f your IT investment

Architecture review

SAP integration

Solution partner financial analysis

Leadership evaluation

Fit for SAP customers

JointIntegration& ProductTesting

StrategicBest-in-Class

Solutions(SAP Price and

MarginManagement)

Collaborative

Product

RoadmapPlanning

Integrated

Customer

Support

SAP Price and Margin Management as an

SAP Solution Extension



Deal

ManagerPrice Manager Profit Analyzer

Pricing Strategy

Pricing Execution

Quote to Cash in the SAP Business Suite

Quote Order Fulfill

SAP Price and Margin Management

LeadOppor

tunity

Contract Invoice

Price Optimization

SAP CRM / SAP SOD SAP ERP SD

Master Data 1Transaction and

other data

2

Deal guidance integration

to Quote

3

Price Conditions4

SAP Price and Margin Management by

Vendavo with the SAP Business Suite




Solution Overview


Wrap-up

2

3

1

4

Agenda



SAP CRMAccounts

Contacts

Opportunities

Quotes &

Orders

SAP Price &

Margin

Management

SAP ERP

Orders &

ContractsFinancials

Pricing

Analytics

SegmentationPrice Setting

&

Optimization

Price

Administration

Deal

Execution

SAP Analytics

Historical

Data

Enterprise

Data Mngt

Transaction

Data and Deal

History

Pricing

Master

Data

QuoteDetails

Deal Guidance.

Integration Framework

ProfitabilityData

How are they connected?



CRM quote status change is

triggered by SAP Price and Margin

Management

Profitability and approval information

retrieved from SAP Price and Margin

Management for quote evaluation

User in CRM can submit price approval requests

to SAP Price & Margin Mngt

Ability to negotiate

discount or price

Pricing guidance and deal score for

sales users, originating from SAP Price

and Margin Mngt

Dedicated view (assignment

block) with key pricing

information

How are they connected?



0.0%

1.0%

2.0%

3.0%

4.0%

Level Of Pricing Transformation

R e t u r n o n S

a l e s

( P r o f i t I n c r e a s e a s %

o f r e v e n u e )

Source: Information based on

customer experiences

Initial Typical Transformational

Transformational

Typical

Initial

Over 3% return on sales

(often over 30% more

profit)

Average 1-3% return on

sales and ~10-30%

additional profit

Average .5 -1% return on

sales, 5-10% more profit

5.0%

Consistent customer results of 10 – 30+% additional profit yearly.

Proven Customer Results — Tangible ROI




Solution Overview


Wrap-up

2

3

1

4

Agenda



SAP Price and Margin Management by Vendavo

SAP Solution Information, Brief, Customer Stories, Value Calculator

www.sap.com/include/price-and-margin-management/index.epx

SAP Solution Brief, “ Improve Pricing Practices and Grow Profits Without

Changing Your Core Processes” (2011).www.sap.com/solutions/solutionextensions/brochures/index.epx Page 3

Vendavo SAP page

www.vendavo.com/sap.html

Where to go for more information



Profit can’t be effectively realized by looking only through the rear-viewmirror – insight is required directly at the point-of-sale

It takes a “ Profit Team” collaborating on one platform to realize success

SAP Price and Margin Management by Vendavo enables prof it throughprice

Sales c loses deals faster, with more wins, and h igher profitability

Exclusive B2B pric ing science under the hood

Tangible ROI with annual prof it increases ranging f rom 10-30% (1-3% ROS)

Maximize your chances for success with one solut ion from SAP

Key Learnings



THANK YOU FOR PARTICIPATING

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short survey via the event mobile application.

SESSION CODE: 0204

For ongoing education on this area of focus,visit www.ASUG.com

driving profit into every deal with sap price and margin management by vendavo

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