I recently read a report from one of Gartner’s top analysts, Michael Dunne. His estimate of the price optimization and management software market is now up to $150 million for 2007. Further, he believes it will grow over 30% each year for the next few years. That’s impressive, given the that most markets, even software, are shrinking or flat. “The potential for this market is significant,” Dunne states, “because defining and defending optimal prices is a fundamental imperative for enterprises responsible for producing returns for stakeholders.” Amen to that.
It shocks me that smart business managers out there still rely on spreadsheets to make pricing decisions where a penny here or there can have a multi-million dollar impact on the bottom-line. With commodity prices whipsawing, competition increasing, information traveling at the speed of light and product and customer complexity expanding across the globe, how could anyone keep up using a Microsoft Excel spreadsheet? Not even a Mensa-certified Ph.D. can race ahead of the speeds and feeds that corporations now face in making pricing decisions. Dunne agrees. “Traditional approaches, such as employing spreadsheets to analyze and manage prices, increasingly are being viewed as inadequate.”
Now’s the time to “Ctl-Alt-Del” that Excel spreadsheet you’re using to make pricing decisions. Wall Street has. The hedge fund guys have. The commodity traders have. When will the manufacturing community take analytics seriously? As Dunn projects, and I agree, they are starting to take notice. Price optimization is now a board-room topic…”Toast that spreadsheet and get us some software that will systematically improve not only our pricing practices and strategies, it will add millions to our margins and bottom-line profits.” Great call. And if your big enough, that could easily be over $150 million in the next few years.
So who should you call? In the June 30, 2008 Gartner report, Dunn cites among others: Oracle-Siebel (www.oracle.com), Oracle E-Business Suite (www.oracle.com), PROS Holdings (www.pros.com) and SignalDemand (www.signaldemand.com). By the way, if you want SaaS (Software as a Service), which everyone is clamoring for these days, SiganlDemand is the only pricing software dedicated to the on-demand delivery model. Also included in Dunn’s list? Microsoft (www.microsoft.com) So even if you do smart-bomb that Excel spreadsheet, the folks in Redmond have plenty of other cool stuff for you.