- February 2017
Pricing in a Connected Economy
The world is now heading faster to be a connected economy. And Pricing in such an economy has become dynamic, influenced by different markets, time, geopolitical scenario and location. A pricing system that does not meet the need of the hour becomes obsolete in due course of time.A pricing to constant quality becomes difficult at times in this connected economy.
Most of the companies still stick on to the traditional methods of pricing that are manual such as data manipulation using excel or custom solutions to do complex pricing. In spite of the unending hassles such as downloading, excess time consumption, increased cost and lengthy processes, they stick on to manual methods due to the lack of an effective pricing system that meet their needs.
Many of the pricing projects with its prospective pricing strategies failed. The reason is quite explicit. Such pricing projects attempt to use a solution far away from their ‘system of records’ or ERP system. And the result is tediousness of downloading data and latency. The project is lengthy and time consuming. Another reason is that such pricing strategies create a lot of errors that hinder the whole process. Pricing teams find it very difficult to sustain themselves in such circumstances and so they are forced to switch on to a manual method in spite of the unending hassles that they have to face.
One of the appreciable solutions is to have a pricing system that is closer to your ERP system. Since all pricing related information is already inside your ERP, the required customization can be done from day one as per the pricing rules and formulas. A robust and dynamic pricing system should have the real-time data from the transaction system. There must be a provision to use directly, the out -of - the box functionalities provided by ERP vendors. And any improvements suggested by them should have a room and it must also be incorporated.
Unlike earlier years the world is becoming digitalized. Selling and buying happens online; and the transactions are taking a new turn.The upcoming companies or new start ups establish themselves globally and disrupt the existing market. They sell and transact in the global markets. Such a scenario demands a still better pricing strategy.
An effective and advanced pricing system must be connected to external data as well. A lot of information that can affect your pricing strategy is now available. From competitor pricings information to economic indicators and geo-political trends, have great impact on your pricing. In order to compete in a connected and dynamic world what we need is not just a pricing system that is close to our ERP system but also close to and connected to external data. A pricing strategy that connects the external and existing data should do the job effectively. Your established models and analysis needs an update too.
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