Enterprise Price Management Overview October 2007.

Enterprise Price Management OverviewOctober 2007

Safe Harbor Statement

The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions.The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

Meeting PurposeQuestions We Want to Answer Today …

• What Is Price Management?

• Why Is Price Management Important?

• What Is Oracle’s Position on Price Management?

• What Is Oracle’s Near-term Product Road Map?

• How Do I Sell Price Management Capabilities?

• Where Can I Go to Get Additional Help?

What is Price Management?

Price management is the end-to-end process of analyzing, planning, publishing, execution & negotiation

of prices

Sales Managers & Sales Ops

Finance/Marketing Managers

Customer Service Reps

While pricing is a fundamental activity within every organization, most do not have an integrated set of

processes or systems

Pricing Analysts & Managers

Maverick Selling Pricing policy creation and enforcement are not aligned within the organization.

Islands of information; no consolidated view of profitability - customer, product, territory; dispersed data leads to inaccuracies in pricing decisions at the time of saleProliferation of Data

Multiple Channels and Pricing Segments

Lack of price integrity within channels and customer segments; need to support an array of discounts, rebates, various contract terms, leads to revenue leakage

Margin Pressures

Manufacturers are getting squeezed between suppliers and customers; Distributors squeezed between Manufacturers and customers

Price lists, product catalogs, contracts, and quotes are used to set price for specific customer opportunities.

Varied Approach to Price Setting

Factors Affecting Price Management across Industries

Why is Price Management Important?Focus on Pocket Price

Pocket Price equals Realized Price. • It is the effective price charged after deducting all discounts,

allowances, and rebates• Invoice and off-invoice discounts lower the pocket price resulting in

lower operating profits

Source: McKinsey & Company

Untapped Lever to Increased Profits

Source: The McKinsey Quarterly

B2B Price Management Market:Analysts Agree: Market Opportunity Early & Growing

Price Management tools will grow to mainstream adoption in the next 5 years Gartner 2006

The B2B Price Management market will have consistent and aggressive growth, consolidation and expansion. Yankee 2006

Price Management is fastest growing software market in next five years.

AMR Research 2006

Enterprise Price ManagementOracle’s Plan and Vision

• Deliver the World’s Leading Price Management Solution• Offer Complete Closed-Loop Price Management• Enables an organization to analyze, plan, publish, execute and negotiate pricing policies• Technology and Domain Expertise now in place

• Price Execution Provides the Foundation• Single system of record enabling delivery of consistent prices• Investments in Siebel Dynamic Pricer and EBS Advanced Pricing can now be leveraged

• Identify Opportunities for Price Improvement (“Find the Offenders”)• Repository of all Sales and Quote History including deals, orders, discounts, and programs

organized for Pricing and Pocket Margin analysis.

• Embedded Analytics and Price Determination Capabilities Drive Improved Profit

• Embedded throughout the planning, quoting, and ordering processes

• Integration of the Business Process Through Technology is Key to Sustainable ROI

• Many stakeholders, systems, processes working simultaneously and in alignment

Revenue Technologies Acquisition Summary

• Founded in 1995 – Pricing Consultants with Deep Domain Experience

• Built Best-in-class Deal Management and Price Analytics Solutions

• ROI for marquee clients (B2B Manufacturers)

• Worked with only a few customers at a time – Deep understanding including Global Deployments

• IP and Personnel to help Oracle achieve Price Management Vision

Customer Example: SemiconductorsBetter Decision Making On Every Deal

“This system pays for itself every day. We make better pricing

decisions because we have up-to-the-minute market pricing data at

our fingertips while we’re doing the deal.”

Pricing Manager

Business Scenario Solution Benefits• Leading Manufacturer of

Semiconductors• 500 deals/quarter across 9

WW regions• 155 sales reps• Cut-throat competition• Poor information at deal

time• 80% of deals end of quarter• Weak control of field

concessions

• Selected RT over Vendavo• Every deal negotiated using

Deal Management Solution• Guides field to right price• Rich deal-time analytics

• Deal compare• Win/loss results• Price history• Compliance history• Waterfall visibility

• Better decisions at deal time• “Found” 40% of Total Deal

Volume• Improved control• $25 MM / year profit

improvement• <90 Day Payback

Business Scenario Solution Benefits

• Leading manufacturer of portable Consumer Electronics

• Poor information at deal time• Spreadsheet islands• Multiple price waterfalls• Global account teams with poor

deal collaboration tools• Large, complex deals• No view of worldwide customer

profitability• Oracle ERP customer

• Chose RT over Vendavo, Metreo, Zilliant

• Every deal negotiated using Deal Management Solution

• Guides account team to right price

• Rich deal-time analytics•Deal Compare•Price history•Compliance history•Global floor analysis•Impact analysis

• Better decisions at deal time• Improved control• $75 million profit increase

Customer Example: Consumer ElectronicsSingle View of Customer Profitability – Pre & Post Deal

Business Scenario Solution Benefits• Leading Manufacturer of

Equipment used within a Banking facility

• 2000 deals/quarter • Poor visibility – customer &

deal profitability• Weak controls – negotiated

deal process• Oracle ERP customer


• Price Analytics solution provides a single accurate view of pricing/profit data

• Deal Management solution controls the negotiated deal process and provides deal-time analytics to improve decision quality

• Immediate visibility into their business

• Real-time pricing insights• Better decisions at deal time• Targeted Incremental Profit:

$12.5 MM / yr

“I’ve been waiting 25 years to see this type

of information about our business.”

VP

Corporate Finance

Customer Example: Banking EquipmentVisibility Into Performance Among “Like” Customers

Business Scenario Solution Benefits• SMB – Industrial Manufacturer• Packaging Machines and

Materials• Complex Product Configuration

– 700+ Attributes to build a bag• 10:1 Prospect-to-Customer

Ratio• 4:1 Quote-to-Order Ratio• No visibility into customer

profitability• Heightened operational

efficiencies result in lower prices• Raw Material cost fluctuations

create price volatility


• Evaluated Product Model to identify attributes that represent market value

• Standardized Product Model allowing for apples-to-apples comparisons

• Price Analytics Solution provides a single accurate view of pricing/profit data

• 90 day implementation time

• Immediate visibility into their business (2004 – 2007)

• Real-time pricing insights• Price Policy revisions• Enhanced Analysis of Large

Opportunities (>$50K in Revenue)

• Targeted Incremental Profit: $1.25 MM / yr

Customer Example: Packaging SuppliesTransitioning From “Cost-Plus” to “Value” Pricing

Price Management FrameworkOracle’s Five Pillars of Pricing

Plan

• Analyze Orders, Price , Volume, Competitive Price, Market Share, Profit

• Customer segmentation, price elasticity

• Product bundling and promotion planning

• Define Price Strategy

• Optimize Price Lists and Policies

Publish

• Manage Product Price Lists

• Manage Segment / Channel / Distributor Price Lists

• Customer Price Lists

• Automatic Generation; Mass updates; Price Protection

• Multi-currency; Multi-unit of measure

Execute

• Execute final contract pricing and terms

• Create quotes and orders based on deals approved

• Ensure correct invoicing for as-shipped quantities

• Discount Accruals

• Order Capture

• Seamless handoff to Fulfillment

• Enforce contracts, price minimums and targets

Negotiate

• Price Recommendations

• Interactive Waterfall Analysis

• Price History, price trend, compliance

• Approval workflow

• Price Exception Approval Management

Analyze

• Key Metric dashboards

• Price performance analysis

• Opportunity identification

• Pricing decision support

• Pricing alerts and recommendations

• Foundation for Enterprise Price Management• True Closed-loop Business Process• Oracle Provides Best-in-class, Integrated Feature Set

Product Roadmap OverviewPrice Publishing and Execution

Plan

• How should I segment customers?

• What are the optimal prices and policies by segment?

• What promotions should I run?

Publish

• Publish customer and partner price lists

• Manage standard discount matrix

• Manage global price coordination

Execute

• Execute accurate prices at time of quote or order

• Accrue off-invoice discounts

• Execute promotions

• Enforce policies

Negotiate

• Negotiate on all points of Waterfall

• Model incentives to drive customer behavior

• Provide price recommendations

• Manage approval workflow

Analyze

• How are my price strategies doing?

• Where should I make corrective action?

• What action should I take?

• Available Now

eBS Advanced Pricing


Siebel Price Administration

Siebel Dynamic Pricer

Price Publishing and Execution Centrally Manage and Execute Pricing for All Channels

SalesContracts

OrderMgmt

Quoting

Purchasing

Web Store

Trade Mgmt

ServiceContracts

• Prices• Policies

Analyst

Pricing UI

APIs

Orders

Quotes

Contracts

Purchase Orders

• Flexible rules architecture

• Implement price & promotional strategies

• Robust pricing engine

• Deliver the right price

Rules-Based Pricing Engine

PublishPublish ExecuteExecute

Best-in-class Pricing Execution• Best in class price execution for

orders, contracts and PO’s• Provides consistent pricing across

all channels• Business-user administration set-

ups• Flexible rules enabling price

segmentation strategy• Provides comprehensive

discounting and promotional tools

• Increase Revenues Through Personalized Pricing

• Reduce Proliferation of Pricing Data

• Eliminate Revenue Leaks• Lower Pricing Maintenance Costs• Reduce Time-to-Market

• Siebel Dynamic Pricer

• Oracle Advanced Pricing

FEATURES

BENEFITS

PLATFORM/APPLICATIONS

Product Roadmap OverviewPrice Analysis and Negotiation

Plan




Publish




Execute





Negotiate





Analyze






eBS Deal Management



Siebel Deal Management

• Available Now• Releases Scheduled in FY 2008

Oracle Price

Performance Analytics

Deal Management Make Better Decisions on Every Deal

• Volumes of Relevant Data Crystallized into Simple Reports/Forms

• Total Picture of Quote Profitability Using Price Waterfall

• Price Scoring

• Price Guidelines and Floors

• Price Recommendations

• Comparative Analytics for Segment, Customer and Competitor

• Impact Analysis

• What-If Analysis

• Better Decisions at Deal Time

• Easy-to-use, Rapid Response

• Improved Control Through Policy Visibility and Enforcement

• Pricing Strategies Moved Closer to the Field

• Preserve value of products

• Preempt price and margin erosion

• Pass recommended price to Siebel/E-Business Suite Quoting application

• Evaluate price exception in Siebel/E-Business Suite Deal Management Application

• Analyze deal and return to Siebel/E-Business Suite Quoting Application to set price.

FEATURES

BENEFITS

USER FLOW

$176 is well below market for 7500 units over last 12 months

Market price is trending down

Win/Loss Trend

Margin Trend

Contribution and Price Scoring

$189 is the Recommended Price

Requested Invoice Price

Price Performance AnalyticsImmediate Insight for Monitoring Price Effectiveness

• Single Consolidated View of Profitability

• Multidimensional Price Waterfall, Price Variability, Price Trend, and Statistical Analytic capabilities

• “Find the Offenders” to Plug Revenue and Margin Leaks

• Over 20 Out-of-the-box reports or create your own:

•Price Performance

•Policy Deviations

•Transaction Level Detail Available

• Configurable dashboards by role or user

• Drill down detail or drill across for deeper analysis

• Visibility Into Information Previously Held in Data Islands

• Recommendations on how to reach objectives

• Focus on Price and Margin Erosion

• OBIEE Analytics

• Siebel or Oracle EBS

FEATURES

BENEFITS


Product Roadmap OverviewPrice Planning

Plan




Publish




Execute





Negotiate





Analyze




• Available Now• Releases Scheduled in FY 2008 • Releases Planned for FY 2009

Oracle Price


Oracle Price Planning



eBS Deal Management




Price PlanningOptimize Segments and Prices

ABC Corp Customer Segmentation

ABC Corp Customer Segmentation

• Determine optimal Customer segmentation

• Optimize segment prices based on customer characteristics

• Perform impact analysis against history or forecast and include fixed contracts

• Optimize Incentives/promotions by segment

• Optimize discount policies based on business objectives

• Group customers by appropriate buying behavior

• Set optimal prices by segment in order to maximize objectives (e.g. margin)

• Optimally balance discount policies with Revenue, margin objectives

• Understand pro-forma impact of price and policy changes

• Oracle Price Planning

FEATURES

BENEFITS


Target MarketCustomer Characteristics

Existing EBS and Siebel Customers With Order Management or Quoting (Up-sell)

• Easy-to-sell

• Fast Implementation

• High ROI

Green Field Opportunities

• B2B Manufacturer or Distributor

• High Tech, Industrial Manufacturing, Automotive, Life Sciences, Chemicals, Natural Resources

• Go-to-market Using …– Multiple Channels– Produce and Distribute Price Lists– Sell Via Durational Contracts And/or Spot Agreements– Product Portfolio (Multiple Product Lines And/or Services) – Sell Configured Products

Target MarketKey Business Drivers

• Lack visibility into the bottom-line profitability of every deal and every customer

• Use a variety of pricing terms, both on and off-invoice, across multiple products and lines

• Want to control pricing centrally, while empowering the field to negotiate within pre-approved guidelines

• Need price recommendations for exception requests that help maintain price integrity

• Need to ensure that customers are fulfilling commitments

• Have difficulty executing prices consistently across numerous Order Management and/or Quoting platforms

• Slow to respond to market changes or customer price requests

B2B Price Management Market CompetitionOracle is Poised to Claim Leadership B2B Market

Analyze

Source: Company websites, Hoovers research, AMR research report – “How to select the right B2B price management vendor’ (May 2005), Functionality assessment based on AMR research report quoted above and information from company websites

2006: 4 vendors acquired (Oracle acquired ProfitLogic and Retek,SAP acquired Khimetrics, Symphony Tech acquired Metreo)2007: Oracle acquired Revenue Technologies, Vendavo likely to be acquired by SAP. At least 3 other vendors unlikely to remain independent

Plan Publish Execute Negotiate

*Retail Only*Retail Only

*Retail Only *Retail Only

*Chemicals,Energy, IM

*Healthcare

*High Tech,Distrib. & IM

*Media &High Tech

*Airlines & Hotels

*IM &Distribution

*IM &Distribution

*Media, Airlines, Hotel, Cargo

*IM – Basic Materials

*Distribution

*Semiconductor Pharma, & Medical



*Semiconductor Pharma, & Medical *Semiconductor

Pharma, & Medical

*Chemicals,Energy, IM

Competitive LandscapeEnterprise Price Management

&Vendavo (& SAP)• Strengths

- Marketing Incumbency- On SAP Price List

• How to Win- Sell Single System for Pricing - Expose Vendavo Scalability Weakness- Deal-Time Analytics vs. Historical Analytics- Sell Enterprise Price Management Vision

Zilliant• Strengths

- Deepest in Price Segmentation • How to Win

- Get to Market ASAP and Freeze Them Out- Lack Strategic Partner- Highlight Integration Costs- Expose Gaps in Solution (Deal Mgmt.)- Sell Enterprise Price Management Vision

Where should I begin?

• Theme for most industries – Automate then Optimize– Build the execution platform; Single system of record for Price– Choose the right price for the deal– Gain visibility into price performance– Improve and optimize pricing decisions

Plan




Publish




Execute





Negotiate





Analyze




4th 1st 1st 2nd / 3rd2nd / 3rd

Sales Alignment with Product Roadmap

Plan




Publish




Execute





Negotiate





Analyze




• Available Now• Releases Scheduled in FY 08 Q3• Releases Planned for FY 2009

Oracle Price


Oracle Price Planning



eBS Deal Management




4th 1st 1st 2nd / 3rd2nd / 3rd

Enterprise Price ManagementKey Takeaways

• Oracle has a vision for being the leader in this space– And has the technology and domain experience to execute vision

• Only 30% of current Oracle customers own an Oracle pricing engine available now– Advanced Pricing (EBS)– Dynamic Pricer (Siebel)

• Price Management yields ROI’s that rival any corporate initiative

• Oracle is committed to:– Deliver leading Price Management solutions– Help you position Price Management – Help you sell these solutions to your customers

• Tools that will soon be available– Presentations Decks, Articles on Price Management, Sales Playbook,

Pricing FAQ, Apps Unplugged Recording, Competitive Deck, Price

Management Workshop

• Oracle OpenWorld Launch– Horizontal Sessions on 3 New Products

– High Tech Industry Session on Price Management

• Product Strategy Contacts:

David Trice Stanley Quinn

[email protected] [email protected]

+1 404.439.5359 +1 404.439.5364

Enterprise Price Management Additional Information

AQ&

Date post:	21-Jan-2016
Category:	Documents
Upload:	shavonne-wade
View:	215 times
Download:	0 times

Enterprise Price Management Overview October 2007.

Documents