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Price automation is key to dynamic pricing

Price automation and price dynamics

shutterstock_83514625It is surprising that companies embark on spending money on price automation tools without really understanding what’s needed.   This not just a problem with pricing tools.  It is a universal problem that affects thousands of IT applications and systems across the world.

The typical scenario is that an enthusiastic manager, CEO or even staff member is convinced that the tool is the answer to their problems.   Without really thinking what is needed, the tool is installed to great expectation but over time excuses begin to emerge, suppliers get blamed, trust is lost and the tool is left to die on the vine.

I’ve seen this happen, so many times that I cannot believe we don’t learn from our mistakes.

However, if you stand back and ask yourself a couple of simple questions, you might save yourself a lot of grief.

Do you have a Price Automation strategy?

A simple question, but really important.   What’s your vision?  Do the senior managers in the company share it?  Do they believe it’s the right thing to do and will it be supported? Senior sponsorship is essential in acting as an umbrella to keep naysayers and detractors away.   You’ll need it.

Do you have a structure to support Price automation?

I’m not only talking about who’s going to use it, but what is the governance, ownership, control of the solution. It has to fit into a system that makes sense and the responsibility is clearly defined. Otherwise, it will not be effective.

Do you have the processes?

I know a lot of people dislike being controlled by processes, but even basic, simple processes are better than none. For example, does the IT department have support processes for the tool? Is it a priority when things need to be done?   Will you implement structured processes for dealing with lower or higher prices.  There are many to think about but even simple ones assist the deployment and execution of the tool.

Do you have metrics or rewards?

Not only do you have to decide what makes the toolset effective.  You may have to incentivise people to use the tool correctly. Human nature hates change and it’s surprising how many people dislike changing routines and using new systems.

While most companies see reward or metrics as internal activities, the most successful deployments come from partnering with suppliers. They best ones have a vested interest in helping you be successful.

Do you have the right people and practices?

From experience, having the right people and practices to support the use of key toolset is as important as the tool itself. Questions you may ask are, have they the right attitude, skills and tenacity to keep pace with the toolset.   Can they influence the detractors; can they learn and develop skills that are important to keep things on track?

Development and training of individuals, with a strong feedback system to users, suppliers and managers will enhance any tool or system deployment. Invest in the right people and processes and you will have success.

Finally, are you communicating well enough?

With any system deployment a great deal of effort goes into the deployment but usually, only a few individuals get to hear about it until the unveiling.   Amid great flag waving the system get’s announced and not everyone is on the same page.

Communication is generally forgotten or poorly executed. Not only the specific department that uses it needs to understand it, associated departments, need to be informed along the way.

Communication between competing companies is always thought of as alien, but discussing best practices amongst like-minded companies leads to industry change. It doesn’t impact competitive advantage but allows companies to explore and discover new and interesting ideas.   Unfortunately, this form of communication is rare and takes considerable leadership effort to become a catalyst for this type of communication.

Maybe you can become of these leaders.