Furthermore, whether it’s purchasing a new car or a new server, companies often encounter a disconnect between sales and operations, since much service business is now done on long term contracts. So, when the salesperson throws in a discounted service contract with that new office phone system, for instance, the company cannot determine if it is losing money or making money from that service contract, as it includes not only the price of the service parts, but also the cost of the field technician’s time and expertise.
Historically, companies have not tracked whether these contracts have been profitable or based on hard data. With a service parts pricing solution like Servigistics’, companies can track previous contracts and then forecast over the life of future contracts, including data on breakage rates, locations with higher usage, seasonality, and other customer requests to determine the profitability of the contract.
Finally, pricing also goes hand in hand with service parts management (planning and inventory optimization), since maximizing pricing profitability while reducing inventory is a significant boost to the bottom line. The business can not only save money, but also make money by optimizing the service parts. Servigistics is currently the only global provider that provides both capabilities. Well, to be fair, Syncron does both too, but currently mainly for small-to-medium companies and only in certain regions (e.g., Europe).
Part II of this blog post will analyze the pricing software market’s current state of affairs and also report on the current pricing approaches and findings of retailers. Your views, comments, opinions, etc. about any above-mentioned pricing solution and about the software category per se are welcome in the meantime.
Historically, companies have not tracked whether these contracts have been profitable or based on hard data. With a service parts pricing solution like Servigistics’, companies can track previous contracts and then forecast over the life of future contracts, including data on breakage rates, locations with higher usage, seasonality, and other customer requests to determine the profitability of the contract.
Finally, pricing also goes hand in hand with service parts management (planning and inventory optimization), since maximizing pricing profitability while reducing inventory is a significant boost to the bottom line. The business can not only save money, but also make money by optimizing the service parts. Servigistics is currently the only global provider that provides both capabilities. Well, to be fair, Syncron does both too, but currently mainly for small-to-medium companies and only in certain regions (e.g., Europe).
Part II of this blog post will analyze the pricing software market’s current state of affairs and also report on the current pricing approaches and findings of retailers. Your views, comments, opinions, etc. about any above-mentioned pricing solution and about the software category per se are welcome in the meantime.
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