Provus Blog

Services CPQ Series: Advanced Pricing Capabilities

by | Jun 7, 2024 | Product

The process of scoping and pricing professional services has more moving parts than ever before. We’re in a world that’s gone way beyond the product-led landscape of orders, renewals, subscriptions, and discounts.

At the same time, many enterprises are advancing in negotiating multi-year, multi-service, multi-region services deals. Of course, there are many drivers for this, ranging from new technologies to shifting customer expectations. The result is advanced complexity for Services CPQ technology. Naturally, this calls for a similarly advanced lead-to-cash solution, to ensure accurate pricing amid many potential scenarios.

Provus’ Advanced Pricing Capabilities allow Professional Services Organizations (PSOs) to negotiate this new reality effectively. Where it’s business-critical to be able to create dynamic quotes, based on flexible rules, with scalable and repeatable workflows. The system is designed to overcome the traditional obstacles to pricing services and offer guidance when quoting.

 

Current obstacles to accurate services project pricing

 

Customers with complex requirements require pricing to be personalized to each use case. The more inputs, adjustments, and pricing rules needed, the harder it is to maintain quote consistency, data integrity, and margin visibility. Quotes may also become less accurate due to changing market conditions or emerging requirements, impacting margins further down the line.  To overcome these challenges, PSOs need to identify which of the following obstacles are impacting their current pricing methods.

 

Lack of flexibility

Gathering accurate information from different departments can easily create bottlenecks, as PSOs wait for the data they need to price a services project accurately. Moreover, the average buying group for complex B2B solutions is now 6–10 decision-makers, each with their own ideas and expectations. This adds more back and forth between customers, sales, delivery, and deal desk during the scoping process and approval process. Potentially allowing competitors to get involved and win the deal. 

 

Out-of-date rate cards and pricing policies

Innovative companies don’t stand still, and neither do their services offerings. Reps are tasked with keeping up with evolving pricing policies, memorizing the nuances of new service lines, and knowing what to mention when upselling and cross-selling.

However, problems soon appear when using static spreadsheets to store rate cards. Without a centralized, dynamic, single source of truth, changes need to be made to individual spreadsheet templates. This adds time to the process and opens the door to potential errors from manual inputs and configurations. Organizations are left to play catch-up as they adjust prices reactively rather than proactively.

 

Risks of manual errors

Mistakes are part of being human. Unfortunately for services organizations, mistakes often happen wherever there are repetitive and laborious tasks to be completed. For example, updating and managing pricing spreadsheets. Errors can chip away at already tight margins, causing projects to lose out on ROI.

 

Minimal audit trails

The more complex the pricing configuration, the harder it is to maintain full transparency when updating quotes. Without a centralized and dynamic single source of truth, it’s difficult to manage who made changes, and why. Documents get shared, and duplicated, and it becomes harder to verify data authenticity.

 

Lack of structured historical data

The lack of auditable data also means organizations can’t easily gather data that shows what’s worked or hasn’t worked, in the past. Instead, the knowledge stays siloed within departments or with specific sales reps.

 

How Provus Advanced Pricing transforms professional services pricing

 

You can overcome these pricing obstacles with Provus Services CPQ.

Advanced pricing is dynamic, with data held centrally. Updates are made visible in real-time, streamlining the process and allowing inputs from multiple departments and stakeholders – from pre-sales through to procurement to provide a unified pricing front.

 

Multi-dimensional rate cards

Provus Advanced Pricing offers rate cards that can be configured according to each customer and use case. Services organizations can factor in roles, locations, and any specific certification or regulatory requirements. This increased flexibility is essential when developing multi-year, multi-location services projects and mitigating the impact of fluctuating currencies and conversion fees.

 

What-if scenario analysis

Because Provus offers integration with CRM and PSA/ERPERP solutions such as NetSuite, it’s possible to create an pull from integrated data sources andto create advanced side-by-side comparisons. This allows for an enriched form of what-if scenario analysis. Price, margin, and cost – all can be included in one seamless and scalable process, to reduce risk and plan detailed best-case and worst-case scenarios.

 

Markups

Recent macro events, from rising inflation to political instability, have put pressure on labor and logistical costs. This adds complexity when trying to ensure accurate pricing for the immediate and longer term. Advanced Pricing Capabilities bring more granular control to price optimization, allowing you to factor in Cost-of-Living Adjustments, analyze where to pass on costs to customers, and when to find cost savings in supply chains. This granularity can also be applied when developing Fixed Price Contingency scenarios, where there needs to be strictly defined deliverables with clearly structured work breakdowns.

 

User-based access control

As more stakeholders become involved in pricing decisions, they also need access to pricing documents. With traditional spreadsheets, this usually meant adopting a password-based all-or-nothing view. Provus’ Advanced Pricing allows permissions and access controls for individual users, based on their role. There’s automatic tracking of historical price exceptions, plus any changes to rate cards and pricing policies. This helps build an audit-ready trail for governance and compliance teams.

 

Targeted Discounts

It may be much cheaper to retain than acquire a customer. However, businesses must be sure that offering discounts to boost loyalty doesn’t come at too high a price. Provus allows customizing pricing per individual customer, based on resources needed, locations, volume, and time. The enhanced visibility of resources is a powerful way to avoid discounting resources that are in demand. There’s also greater flexibility and fewer scoping calls needed, helping to meet customer expectations while keeping the business relationship profitable.

 

Price and margin analysis

Automating configurations makes it easier to make a minor change to a quote, and instantly view its potential impact on profitability. With Advanced Pricing Capabilities, it’s possible to devise and modify different pricing strategies while still protecting margins. You can aggregate offerings while drilling down to examine individual component profitability. It’s then possible to evaluate the impact of adjustments between dependencies – ranging from total quote amounts to specific resources and services, and across multiple periods.

 

Creating win-win proposals every time

 

For every product, there’s a variety of services to factor in. From recurring subscriptions and discounts to revenue and margin optimization opportunities. When taken together, the Advanced Pricing Capabilities allow reps to maximize revenue without losing out on manual inputs that take time, use up resources and can lead to errors. 

The increased standardization gives teams confidence that they’re always working with the correct pricing and service offerings. This also democratizes access within the business, opening up the same data streams to new starters and experienced high-performers. It provides the foundation to make pricing services both an art and a science while reducing dependencies on individual expertise. There’s the scientific framework based on actionable data, giving all reps the confidence to add their personal artistic touch to closing deals.

 

 

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