Monday Oct 28, 2013

Guest blog: A Closer Look at Oracle Price Analytics by Will Hutchinson

Overview:  Price Analytics helps companies understand how much of each sale goes into discounts, special terms, and allowances. This visibility lets sales management see the panoply of discounts and start seeing whether each discount drives desired behavior. In Price Analytics monitors parts of the quote-to-order process, tracking quotes, including the whole price waterfall and seeing which result in orders. The “price waterfall” shows all discounts between list price and “pocket price”. Pocket price is the final price the vendor puts in its pocket after all discounts are taken.

The value proposition: Based on benchmarks from leading consultancies and companies I have talked to, where they have studied the effects of discounting and started enforcing what many of them call “discount discipline”, they find they can increase the pocket price by 0.8-3%. Yes, in today’s zero or negative inflation environment, one can, through better monitoring of discounts, collect what amounts to a price rise of a few percent. We are not talking about selling more product, merely about collecting a higher pocket price without decreasing quantities sold. Higher prices fall straight to the bottom line.

The best reference I have ever found for understanding this phenomenon comes from an article from the September-October 1992 issue of Harvard Business Review called “Managing Price, Gaining Profit” by Michael Marn and Robert Rosiello of McKinsey & Co. They describe the outsized impact price management has on bottom line performance compared to selling more product or cutting variable or fixed costs. Price Analytics manages what Marn and Rosiello call “transaction pricing”, namely the prices of a given transaction, as opposed to what is on the price list or pricing according to the value received. They make the point that if the vendor does not manage the price waterfall, customers will, to the vendor’s detriment. It also discusses its findings that in companies it studied, there was no correlation between discount levels and any indication of customer value. I urge you to read this article.

What Price Analytics does: Price analytics looks at quotes the company issues and tracks them until either the quote is accepted or rejected or it expires. There are prebuilt adapters for EBS and Siebel as well as a universal adapter. The target audience includes pricing analysts, product managers, sales managers, and VP’s of sales, marketing, finance, and sales operations. It tracks how effective discounts have been, the win rate on quotes, how well pricing policies have been followed, customer and product profitability, and customer performance against commitments.

It has the concept of price waterfall, the deal lifecycle, and price segmentation built into the product. These help product and sales managers understand their pricing and its effectiveness on driving revenue and profit. They also help understand how terms are adhered to during negotiations. They also help people understand what segments exist and how well they are adhered to.

To help your company increase its profits and revenues, I urge you to look at this product. If you have questions, please contact me.

Will Hutchinson
Master Principal Sales Consultant – Analytics, Oracle Corp.

Will Hutchinson has worked in the business intelligence and data warehousing for over 25 years. He started building data warehouses in 1986 at Metaphor, advancing to running Metaphor UK’s sales consulting area. He also worked in A.T. Kearney’s business intelligence practice for over four years, running projects and providing training to new consultants in the IT practice. He also worked at Informatica and then Siebel, before coming to Oracle with the Siebel acquisition. He became Master Principal Sales Consultant in 2009. He has worked on developing ROI and TCO models for business intelligence for over ten years. Mr. Hutchinson has a BS degree in Chemical Engineering from Princeton University and an MBA in Finance from the University of Chicago.

Tuesday Oct 08, 2013

Going Camping with Mobile Business Intelligence

The mobile market is changing user expectations for consuming data, and those expectations are out-pacing available desktop and laptop software. Matt Milella, Director of Product Development for Oracle Business Intelligence Mobile Apps, joined me in an Oracle AppCast to discuss this phenomenon.

Instant access to critical business data on mobile devices is changing how and where people are making business decisions. I see people all the time waiting for planes, shopping for groceries, sitting in a cab or walking down the street (dangerous, don’t do this) using their mobile devices. In terms of business, what is going on here? It can’t all be email and YouTube! Matt told us, “Users no longer distinguish between mobile and desktop, they want to start something while they are riding on the train and pick up where they left off on the desktop at work. Apps like “Evernote” do a great job at this. We need to move towards that and are [Oracle] thinking about this deeply…. For example, a sales rep on the road might be working on a deal on their tablet in a taxi or on a plane – and may want to complete the work on a desktop when they arrive at their office or home. Executives on the road may start some analysis on plane and perhaps make annotations – and when they arrive at the office want to continue their train of thought.”

Oracle has released two exciting mobile Business Intelligence (BI) products, one called “Oracle BI Mobile App Designer” (launched recently), and “Oracle BI Mobile HD.” Matt provided some guidance as to the purpose and use for each. “BI Mobile HD is our iPhone and iPad app that allows customers to leverage their investment in BI. It allows users to consume existing BI content that was largely built for the desktop. The BI Mobile App Designer allows business users (not IT) to create mobile experiences, designed for devices. The apps are all responsive, which means the features are all accessible, so regardless of your phone or tablet size, the app will just work. The BI Mobile App Designer opens up the types of purposeful apps that can be delivered to the end user in an organization. It goes beyond traditional Business Intelligence; -- think dashboards focused on mobile with a specific flow. And these apps are developed in minutes with zero code.” I found that amazing.

It was also interesting to hear that mobile apps are not just the reincarnation of the desktop application in miniature for mobile phones or tablets, but rather apps designed with the purpose of the device in mind. Matt told us, “Let’s be realistic, you would not write a novel on a phone, or take your tablet camping. You could, but likely won’t. When building an app you really need to think about the user and which device is truly their mobile device. You may have noticed that our HD app is now a universal app (iPhone and iPad). We have a new focus on the phone, and we think this form factor is just as important as the tablet because they are typically always on and with the user. In fact I always have my phone, when I am out for a bike ride, or even out camping. The office walls have been blown up.” Matt talked about mobile functionality being dependent upon what the user would likely want to do with a particular device, and then building the app to suit the device. For example, receiving a status message on a watch, or being able to select from a short list of options to perform on a phone.

Matt further explained that one of the reasons that Oracle can keep up with the mobile market is that they changed the way they approach the mobile world. “We are an enterprise software company and we traditionally thought of release cycles as being long. For mobile, we are changing that cadence to one that is in line with the mobile market. Just this week I got an update for my BI Mobile HD client on my phone, and we will continue to release both features and patches at a much faster pace. In fact, over the last 2 months we have released two Mobile HD updates with a major leap in experience and functionality. We also just released Mobile App Designer, and I really think it is going to be a game changer.”

To listen to the entire podcast, click here.

To learn more about Oracle BI Mobile products, click here.

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