A Quest for Global Pricing Excellence

By Johannes Selig
August 4, 2016

How to Address Country Specifics in Global Price and Margin Management

If you are thinking of implementing global price and margin management, be aware that you potentially face a multitude of country-specific pricing requirements. All is not lost, however. You can still realize common processes that capture worldwide opportunities of margin optimization and set a common goal to realize value across regional boundaries. Let me share with you 3 approaches to managing country specifics in a quest for global pricing excellence:

  1. Centralized (global)
  2. De-centralized (local)
  3. Coordinated and harmonized

Let’s first look at the one process to rule them all: centralized. You invite the country or region that knows your pricing best and you configure their experience and ideas as your master process template for the rest of the world. You can expect quick progress to go live…and a set of happy users in that part of the world. But beware. When you take your centralized (global) solution and offer it to other countries and regions, you will find that it still requires adaptation to local needs. And now your roll-out schedule is at risk while you struggle with ad hoc, country-specific workarounds and regional change activities before you achieve business acceptance, adoption, and global reach.

Maybe those workarounds are unappealing to your business. Instead, should you let each country or region develop their own way and merge these Lone Rangers into a common best practice? You can expect a group of successful regional go-lives. But behold, this de-centralized (local) approach risks a large effort to incorporate the parts into a friction-free common platform. Now you risk your objective of creating a global solution while you spend time and effort resolving duplications of efforts and finding ways to overcome incompatibilities in data management, pricing workbooks, and deal steps.

So what about the third alternative and have all for one and one for all? For this to work, you must analyze all country-specific pricing processes during the beginning stages of the project. Your comparisons and harmonization of processes creates a template across local (country) entities that identifies country-specific requirements well before the roll-out process. Now you have one coordinated and harmonized pricing approach that covers all countries and their respective requirements.

This third approach needs an initial high effort for analysis. Obviously each country in scope contributes to this effort—even countries with common practices do not reduce it much. Just the cost of travel to kick off with experts and the planning of communication across multiple time zones might look prohibitive. Add to this a large, simultaneous testing suite when you have configured your truly global, yet flexible solution.

However, after these initial stages are complete, you have created a common best practice that is already adapted to local customs, resulting in a master template that requires no changes and keeps roll-out costs to a minimum. For the coordinated and harmonized price management process, real life project experience indicates that early consideration of country-specific requirements leverages global understanding. Further, the respect for local practices from the start creates a best practice solution that reduces the total cost.

Each path has its benefits, but the third route may well be the best quest to adopt for global Pricing Excellence. The reward is a worldwide content user base that uses global and local best practices harmoniously to do business.

  • global connectivity , globalization , margin , price , price and margin management

    Johannes Selig

    For the last five years Johannes has specialized in implementing global price and margin management solutions for large corporations. Prior to that he directed the localization of sales and distribution software while working in Central Europe, North America and Southeast Asia. In today’s economy he firmly believes that successful IT projects must think global and act global.