The pricing dashboard and analytics available through the SAP Price and Margin Management application by Vendavo deliver powerful pricing insights that can help you realize huge profit increases on your current business. You can identify new profit-improvement opportunities, gain insights needed to create a comprehensive pricing strategy, understand the impacts of price and volume changes, uncover margin leakage, and more. And because it’s delivered as a rapid-deployment solution, you can get started in as little as eight weeks.

1. SAP Solution Brief
Solution Extensions Objectives Solution Benefits Quick Facts
SAP Price and Margin Management
by Vendavo
Guide Pricing Strategy and
Improve Profits with Software
You Can Implement Rapidly

2. Objectives Solution Benefits Quick Facts
Pricing: Using pricing insight
to improve the bottom line
Pricing: Using pricing insight Managing pricing is one of the highest-impact yet least-utilized profit
to improve the bottom line improvement strategies. You can boost net (pocket) prices by controlling
variables such as volume discounts, price exceptions, and contract
negotiations on everything from packaging to payment terms. So how can
you get better control over pricing to improve your bottom line?
Even small pricing changes can make a big dif- real-time business visualization, and in-depth
ference. For example, just a 1% increase in real- analysis needed to uncover ways to optimize
ized price can translate into a 10% increase in pricing. And while specialized pricing consul-
operating profits. But to maximize the impact tants provide useful insights, they can only
of pricing, you need to develop an enterprise help address issues at one point in time – not
pricing strategy – and continuously refine every day.
pricing decisions based on what’s happening
in real time. To address these needs, the pricing dash-
board and analytics of the SAP® Price and
Most organizations try to tackle pricing using Margin Management application by Vendavo
traditional business intelligence tools or spe- – implemented in as little as eight weeks –
cialized consulting services. But traditional helps you systematize and automate the art
tools don’t give you the pricing frameworks, and science of pricing analysis.
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3. Objectives Solution Benefits Quick Facts
Discover untapped opportunities
to improve profitability
Discover untapped opportunities SAP Price and Margin Management provides
to improve profitability industry-leading, pricing-specific analytics
that reveal what’s really happening across your
Understand price, volume, business. For example, use role-based, prebuilt
and profitability changes dashboards to spot profitability problem areas
and track key pricing metrics, such as pocket
Use playbooks to address margin margin, price yield, and per-unit margin vari-
leakage and rising costs ance, across a variety of dimensions. Generate
scatter charts of sales transactions, making it
Get started quickly with a rapid, easier to identify outliers – indicators of poten-
affordable implementation tial price-improvement opportunities. And at
any time, drill down into your enterprise data
to learn more, such as: Find out if small customers are
•• Which sales rep made a sale
•• Which products were sold receiving concessions reserved for
•• The customer’s name and classification big customers or salespeople are
•• How the transaction compares to sales of
similar products to similar customers (for
negotiating specialized products
example, did you absorb freight costs or at commodity prices.
offer discounts and rebates?)
As a result, you will quickly identify problems
such as excessive discounting, unrecovered
costs to serve, and unaccounted-for rebates.
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4. Objectives Solution Benefits Quick Facts
Understand price, volume,
and profitability changes
Discover untapped opportunities Pricing decisions are typically made in a
to improve profitability decentralized manner by many people work-
ing in multiple departments across an organi-
Understand price, volume, zation. Because pricing data gets fragmented,
and profitability changes you need a way to centralize related data and
use it to uncover hidden issues, trends, and
Use playbooks to address margin profit-eroding decisions. SAP Price and Margin
leakage and rising costs Management supports in-depth, ad hoc analy-
sis using prebuilt analytical models that help
Get started quickly with a rapid, you fully understand the drivers of price and
affordable implementation volume changes within any slice of the
business.
Pinpoint profit or revenue
For example, during quarterly account or
business reviews, use a causality dashboard underperformance due to mix,
to instantly understand the root causes of low price, or volume changes –
sales or profitability for any product, region,
rep, or customer, from summary level to min-
in any slice of the business
ute detail. If it’s reported that sales for a cer- and in real time.
tain product line are down by 10%, see the
exact contributions of price, mix, and volume
– all in real time. This way, you can focus on
solving problems, not on debating them.
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5. Objectives Solution Benefits Quick Facts
Use playbooks to address margin
leakage and rising costs
Discover untapped opportunities Specialized price analytics quickly pinpoint SAP Price and Margin Management provides
to improve profitability margin leakage and opportunities to improve pricing “playbooks” – or predefined sets of
pricing. For example, your sales team may be structured analytical steps – that help your
Understand price, volume, agreeing to terms that, over time, hurt your team find margin leakage and identify service
and profitability changes bottom line. What if a customer consistently cost issues. The most commonly used play-
negotiates based on large promised volumes books come standard with the solution. As
Use playbooks to address margin that don’t materialize? What if they demand your team develops new approaches or uncov-
leakage and rising costs expedited shipping, special payment terms, or ers additional insights, they can modify play-
special packaging? Should you agree? Will the books or create new ones and share them
Get started quickly with a rapid, costs to serve drive profitability too low – or along with reports, pricing insights, and more.
affordable implementation even negative? Where should you draw the Sharing accelerates organizational learning
line? and helps you scale profit improvements
across your organization.
Pricing playbooks help your team find pricing
opportunities and support organizational
learning so you can maximize profit
improvements.
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6. Objectives Solution Benefits Quick Facts
Get started quickly with a rapid,
affordable implementation
Discover untapped opportunities Because the pricing dashboard and analytics
to improve profitability of SAP Price and Margin Management are
delivered as a rapid-implementation service,
Understand price, volume, you benefit from a fast, affordable implemen-
and profitability changes tation with unparalleled profit-increase
potential. Leveraging services from SAP and
Use playbooks to address margin its partners, you can start uncovering pricing
leakage and rising costs and margin insights in as little as eight weeks.
Get started quickly with a rapid, When you need to prove the value of the solu-
affordable implementation tion, consider implementing it first in a small SAP customers report profit
part of your business – for example, a certain increases of up to 1.5% of
product line or territory. Measure the results,
and then use the profit improvements total revenue with SAP Price
you identify to develop a business case for and Margin Management.
supporting expanded use of the solution
company-wide.
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7. Objectives Solution Benefits Quick Facts
Maximize your pricing power
Maximize your pricing power With the pricing dashboard and analytics avail- do all this and more – resulting in profitability
able through SAP Price and Margin Manage- increases of up to 1.5% of total revenue, as
ment, you have everything you need to lay the reported by our customers.
foundation for successful price management
– now and in the future. Imagine being able to And armed with better insight into customers,
create an enterprise pricing strategy, make sales, the cost to serve, and pocket prices,
pricing best practices transparent internally, you’ll eradicate ad hoc decisions during con-
and centrally monitor pricing decisions across tract negotiations, account planning, territory
your business to avoid costly pricing outliers. reviews, and more that end up costing you
Imagine having a better understanding of money – rather than making it for you. At the
which customers and products are the most same time, you can maximize cost recovery,
valuable to your bottom line so you can make minimize pricing errors, and reduce margin
informed, strategic pricing decisions. You can leakage.
Deploy the solution in as little as eight weeks
– and earn a payback of up to US$15 million
annually per $1 billion in revenue, as reported
by SAP customers.
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8. www.sap.com
Objectives Solution Benefits Quick Facts
Summary Solution
The pricing dashboard and analytics available •• Analytics to identify pricing opportunities
through the SAP® Price and Margin Manage- •• Support for pricing best practices
ment application by Vendavo deliver powerful •• Role-based dashboards with prebuilt
pricing insights that can help you realize huge metrics
profit increases on your current business. You •• Visualization tools to understand revenue
can identify new profit-improvement opportu- and profit levers
nities, gain insights needed to create a com- •• “Playbooks” to identify root causes and
prehensive pricing strategy, understand the corrective actions
impacts of price and volume changes, uncover
margin leakage, and more. And because it’s Benefits
delivered as a rapid-deployment solution, you •• Find opportunities to boost profitability
can get started in as little as eight weeks. •• Develop an enterprise pricing strategy that
increases margins
Objectives •• Recover more costs to serve and reduce
•• Enhance profitability by making sound margin leakage
pricing decisions •• Identify pricing outliers that represent new
•• Negotiate deals that create strategic margin-improvement opportunities
advantage •• Make more-informed decisions in negotia-
•• Set and enforce effective pricing policies tions, account planning, and more
Learn more
Call your SAP representative, or visit
us online at www.sap.com/usa/solutions
/solutionextensions/pricemarginmgt
/index.epx.
CMP18239 (12/06)
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