Customer Success Study Chemical Manufacturing Global Chemicals Firm Standardizes Pricing Processes to Boost Margins by Millions A lack of pricing policy and insight into deal impact on margin left millions of dollars on the table Unlock Your Data Unleash Your Sales 1
Executive Overview Customer Multi-billion dollar, European division of a leading global chemicals company CHALLENGE Inconsistent pricing created internal group conflicts Ad hoc pricing processes and field sales policies not aligned Large and complex SAP ERP environment needed integration SOLUTION PROS Pricing Solutions Suite: Established control and uniformity of product pricing across the division Ensured effective user adoption through change management processes Improved visibility into pricing data by customer and product, integrated with SAP IMPACT Identified underperforming products and customers in only 17 days Increased gross profits by tens of millions of euros 2
PRICING FOR MULTIPLE SUBSIDARIES POSED MAJOR CHALLENGE For this global chemicals company with multiple subsidiaries and customers in more than 200 countries, pricing to maximize profitability was a particular challenge. Inconsistent internal pricing processes often created conflicts among internal groups. Although the company had methods for defining common costs, many cost-to-serve elements were unclear. Ad hoc pricing processes, along with nonaligned corporate and field sales policies, characterized the company s pricing strategies and execution. Without a common set of deal evaluation criteria for all customers and contracts, noncompliant invoices were routinely approved. The chemical company s sales organization was unable to truly understand the contribution margin of a given deal or customer, and, as a result, often left millions of dollars in profit on the table. Executives realized that to improve profitability, the company required an integrated pricing strategy supported by easy-to-use tools and robust technology. Review status of deals along with at-a-glance scoring of deal profitability 3
PROS is the only pricing software vendor who can meet our needs today and scale globally as our needs grow and evolve. PROS is a true partner. PROS Selected as Strategic Solution To Ensure Uniformity and Access to Pricing Because margin improvement was a strategic imperative, executives supported funding pricing system initiatives, despite severe cuts or complete freezes on other IT projects. This chemicals company selected PROS Pricing Solution Suite to deliver several key capabilities and benefits. PROS provided a robust, real-time Web services product pricing interface that integrated with the company s SAP ERP system, which led to several pricing improvements, including standardized data sources, interfaces, monitoring, and administration. PROS Price Optimizer and PROS Deal Optimizer, for example, empowered corporate governance teams to control not only how products were priced, but also control the price at which they would be sold. Key Capabilities and Benefits Provided visibility into pricing data by customer, product, and other attributes that executives, product management, sales, logistics, and finance groups needed to make better pricing decisions Replaced an outmoded pricing system allowing marketing to standardize methods for constructing product prices Assured the latest pricing would be readily available in the field so that sales representatives could quickly and easily execute more profitable price changes Delivered complete integration with SAP ERP, coordinating different technical services to seamlessly roll out the solution to all business units 4
PROS Price Optimizer and PROS Deal Optimizer empowers corporate governance teams to control not only how products are priced, but also control the price at which they will be sold. This ensured that all products were priced uniformly. In a matter of weeks, the company met its goal of strict adherence to maintaining contribution margin parameters. PROS helped establish new KPIs and effective change management that facilitated successful user adoption among executives, product management, sales, logistics, and finance professionals. Easily identify those negative margin customers to target for corrective action Why PROS A partnership approach where we roll up our sleeves and work with you to get the job done. Innovation that reaches beyond the status quo, creating smarter solutions to propel you ahead of the rest. Embedded data science that provides guidance and recommendations to help you compete and win. Nearly three decades of experience crunching big data to reveal opportunities and guide better business decisions. 5
We undertook an extensive technology review of all pricing software vendors and PROS clearly stood on top for their best of breed SAP integration and robust no custom-code platform approach. Underperforming Customers Identified Immediately; Millions Expected in Margin Improvement Within 17 days of initializing the PROS implementation, management easily identified underperforming products and customers and took immediate corrective action. The company pushed out prices and deals quickly and effectively, and most importantly, uniformly. Furthermore, operational KPIs helped the company recognize that everyone had a stake in optimized pricing procedures, and could rely on PROS to achieve internal goals while still meeting external market needs. 6
PROS Pricing Solution Suite PROS Pricing Solution Suite consists of four modules that work together to get you to Pricing Excellence Scientific Analytics Identify segment-specific pricing, find opportunities for margin improvement, and forecast and monitor your progress proactively Deal Optimizer Quote the right price for each deal by using guidance, market insights, and integrated approval workflows Price Optimizer Create the right price for each customer and product by setting science-based optimized pricing strategies and managing price lists automatically REBATE Optimizer Centralize and manage your rebate programs, and measure the effectiveness on deal profitability Monitor your performance and adherence to policy 7
About PROS PROS Holdings, Inc. (NYSE: PRO) is a big data software company that helps customers outperform in their markets by using big data to sell more effectively. We apply 27 years of data science experience to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. PROS offers big data solutions to optimize sales, pricing, quoting, rebates and revenue management across more than 30 industries. PROS has implemented more than 500 600 solutions in more than 55 countries. The PROS team comprises more than 650 700 professionals around the world. To learn more, visit www.pros.com. PROS.com Copyright 2013, PROS Inc. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error -free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or tness for a particular purpose. We specically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. 8