Maximizing ROI: Best Practices for Successful Software Implementation
Join PROS + EY in this informative session where you'll gain valuable insights on how to drive a successful software implementation program. We'll cover the necessary pre-requisites for a successful implementation, best practices for driving adoption, and tactics for measuring value post-implementation. Whether you're considering pricing software for your organization or have already implemented it, this session will provide you with actionable recommendations to help you achieve success. The session will conclude with an interactive Q&A session, providing you with an opportunity to ask questions and gain additional insights into pre-implementation readiness, adoption, and value measurement.
Full Transcript
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Bernard Kang: I'm so excited by so many of the things I saw this week. I think Gen 4 guidance is fantastic. I saw her pricing for subscriptions now in the product now as well. So, so many things for us to be excited about. At the same time, it only kinda makes sense if we could demonstrate our life. We could show our bosses that, "Hey, all this money that you spent on this is actually producing a return." So that's what we're here to talk about today. I think the timing is actually pretty good 'cause if, like me, you've spent all weekend more and more excited and hyped up about all these new developments and all the different kind of colleagues and customers you're speaking with, now it's... We're gonna do all that, but we definitely need to show ROI. We definitely have to realize value capture throughout the implementation and afterwards. So that's what we're here to talk about. This technology's working so far. So I'll go first with a little bit of introductions. My name is Bernard Kang. I lead the Pricing Practice at EY. We serve companies all around the world in all different industries. I just learned we serve wholesome in Ecuador. Is that right?...
S?: Globally.
Bernard Kang: Globally? But you guys are from Ecuador, is that right?
S?: Mexico.
Bernard Kang: And Mexico. Ecuador. Okay. I've heard Ecuador's a fantastic place to retire if you wanna live economically. Is that a fair statement? And beautiful beaches?
S?: Galapagos Islands.
Bernard Kang: Yes. Galapagos Islands. I think there's a lot of medical tourism and such so keep that in mind. You can speak with this gentleman here if you've got questions after the session. So we work EY pricing, practice, strategy, analytics, operating model, and technology end to end. So with that I'll pass it to Craig, and I will pass the baton.
S?: Thanks, Craig.
Craig Zawada: Yeah. Hello everyone. Craig Zawada. I'm the Chief Visionary Officer at PROS. I've been with PROS for 12 years and play a lot of roles. I work with a lot of existing customers to get the most out of the technology prospects that are looking at transforming their pricing, and also overall company direction. And prior to that, I was prior consultant for 13 years, partner in a consulting firm and co-authored the Price Advantage first and second edition. So pricing is my passion, and pricing technology is my passion. So thank you.
Bernard Kang: Pass the baton to Kunal.
Kunal Kothari: Sure. Thanks, Craig. Thanks, Bernard. My name is Kunal Kothari. I'm a senior manager at EY. I'm based out of Houston, Texas. I've been with EY for about 11 years now and overall 18 plus years of experience in sales, pricing and service strategy, and effectiveness. I've done a lot of CRM and CP implementations over my 18 years. I'm looking forward to sharing some insightful nuggets with you guys today and take some questions as well.
Bernard Kang: All right. Thank you, Kunal. So you've probably got about 70 years of experience at the front of the room on this topic. There's probably several hundred years of experience in the audience on this and related topics. So if you've got a great idea or something to add to the conversation, feel free to chime in and throw your idea in. And I think we could all learn something from each other today. So why don't we talk a little bit more about value capture. So when you think about implementing a software, this is not easy stuff. It's invasive. It takes time. It takes money. It takes capital. It takes political capital. It takes your personal energy. This could in certain cases it'd be life changing. I see some laughing and smiling. That looks like painful smiling though, like, "Oh, yeah, that was great." So, yes, this is a huge investment in time and energy capable... Capabilities. Most of you in the world of pricing will do this once. And so why would you go through the bother? Why would you do all that? And it's because I think all of us realize there's tremendous value to be captured.
Bernard Kang: The book that Craig wrote on this topic that everybody in the world have been pricing, has been quoting for the last 20 years, 1% of prices is 11% of of operating profit. That's why we do this. But clearly there's gotta be thought that we put into, how are we gonna actually capture value and then measure it effectively and communicate it back to our leadership so that everybody can feel comfortable that we created the value that we promised? And so there are three aspects to this that we're gonna share with you today. First, there's pre-implementation readiness. So I can assure you when the consultants or the vendor shows up on day one, they're gonna ask a lot of questions, like, what's your data? What's your process? Who's involved? Who does what? How fast do you want this to go? How many businesses? How many products? How many customers? They're gonna ask all these questions. And if you don't already have answers to those, what's gonna happen is you're gonna feel pressure to answer those questions in the moment. And you may or may not give the answers that you would like to live with at that point. And if you don't give good answers and you give answers a month later, they're gonna show you what you asked for, and it may not be what you wanted.
Bernard Kang: And if that's the case, then you're gonna have to pay more money or cut something else out. So those are bad outcomes. So this whole idea of pre-implementation readiness is critical. My colleague Kunal is gonna address that topic. The second point, software adoption, if nobody's using the product, there's no value created for the most part, right? And this has been an issue across the world of software for decades. I commonly talk with clients who are... I think, CRM is probably more mature in this regard, but they'll say, "Yeah, we're doing pretty well. We're up to like 16% adoption." Like 16. If you ask me, that's too low, right? And there's a lot of questions why. And Craig is gonna address this topic. Again, he happened to have written a book that addresses this topic. So that's about as expert as we can find in this world for sure. And the third topic, value measurement, I'm gonna address.
Bernard Kang: I was sharing with some folks this morning. I myself am not a technologist by training. I'm more of a business... I'm very good at MBA math, like, plus, minus, divide, subtract, and extrap. I'm like an expert at extrapolation. But there are many things around value measurement that a critic... Like your CFO probably cares about. And I've spent a lot of time thinking about this. And as consultants, we generally have to justify our presence and existence through these kinds of conversations. So I'll close this out with that. So before getting any farther, any particular questions or anything that you would like to have us really emphasize as we go through these three topics? Yes sir. Here, let me pass you this real quick.
S?: Okay. I'd just like to get a clearer picture on ROI tracking after implementation. I know there's some standard ways to do that. But no business is completely standard. Just wanna make sure we get a good view on that.
Bernard Kang: Alright. ROI tracking after implementation, we get that quite a bit. Any... Anything else before we dive in? I'm gonna do the Phil Donahue thing. [laughter]
S?: Alright, well it's all being recorded.
S?: Oh, thank you. Yeah. My question kind of relates to the ROI tracking, which is if you could address the typical timelines for value realization after an implementation when those buckets of money start rolling in.
Bernard Kang: Alright. Value tracking over time. We are, certainly gonna run out of time before we could answer everything that we wanna say or every topic we wanna say, myself, Kunal, Craig, we're all available afterwards and we could follow up afterwards as well. But let me just dive in. I'll pass it to Kunal to address our first topic pre-implementation readiness, Kunal.
Kunal Kothari: Sure. Thanks Bernard. So pre-implementation readiness. Let me first start with a quote from Abraham Lincoln, right. What Abraham Lincoln said, if you give me six hours to chop down a tree, I will spend the first four hours in sharpening the axe, right. That's what we're talking about when you talk about pre-implementation readiness. When you hear about pricing, CPQ transformation projects, you have your usual suspect criteria, success criteria, executive sponsorship, making sure scope creep doesn't happen. Requirements are getting gathered appropriately with the right big use stakeholders. But from our experience, if we take care of three big pillars, when it comes to pre-implementation readiness that you see on this slide, you would cover 80% to 90% of the issues that it will actually face during the implementation itself, right. The first one being system and data readiness.
Kunal Kothari: I can almost guarantee that almost every person in this room is going to raise their hand and how important it is to be ready with data, especially when it come, when you talk about pricing and CPQ implementations. Data can be your friend and it can be your worst enemy, right. Data is like kryptonite, right. Nobody wants to touch it [laughter], but it has to be dealt with. The second pillar. And it is one of the pillars that is usually most neglected, especially in the disguise of, hey, we are agile, we don't need any documentation, it's false. [chuckle] If you don't have proper governance mechanisms, methods and approaches and properly documented processes, you are going to have a lot of issues.
Kunal Kothari: During implementation and post implementation as well when you're looking to upskill your own people. The third pillar, your transformation planning and the execution. This goes back to the point that you mentioned that how do we have a roadmap in place and how do we have a formula in place to track the benefit of what is it that you're going to implement. That is going to sow the seeds of the topic that Craig is going to touch on user adoption as well. And would touch based on each of these three pillars with some real life examples. From real client stories that how we came across this issue and how we actually resolved it. Before I get into this, does anybody have any comments around this specifically? Something that is, has been a tick in the hair for a lot of you in terms of the implementations that you were already part of or are currently a part of? Any comments?
S?: Yeah. In terms of readiness, I would say what I find difficult is we don't seem to have good documentation, right? SOPs. I think, if we had SOPs for everything, when you talk about readiness, it would be a lot easier. And I think, that tends to be a... This would be my second one. I helped implement PIM and now I'm helping implement PROS and that seems to be the hard part. 'Cause now I'm gathering documentation requirements and there are always gaps. Six months later they're like, oh yeah, but we need this. Well, no that costs money, right. Yeah that seems to be something I run into a lot.
Kunal Kothari: Yeah. That's, pretty common as well.
S?: We kinda have one here at the back.
Kunal Kothari: Oh, I'm so sorry I Interrupt.
S?: Just wanted to add from my experience of, in Six Sigma Master Black Belt from last 15 years. Many times when we start a new transformation, we always think of starting from a zero. Forget about what exists. And I have seen when we think of adoption, why adoption is missing. Because a new solution which we are building, it may not be good, the existing one. We never look at our baseline and think of how to improve the baseline. And I have seen with the PROS in some of businesses, their baseline is much better than the new solution, which we are coming with. And when you think of moving those business to a new solution, they see it is nothing in me, nothing for me. I think, somewhere, I believe when we are thinking of this transformation, we should also think of what problem we are trying to solve. What is the current baseline where each business is, and how can I help to improve that baseline? Yeah.
Kunal Kothari: And you can look on ways on that on the last topic, especially. The transformation planning and execution, we're gonna touch base a little bit on that. On what kind of things should we baseline, what kind of things should we be looking at? Great comments sir. So let's talk about the first element system and data readiness. And I'll bring in a real life example over here. So we had a client over here in the Med devices space. They were doing a pricing implementation and fully transparent. It wasn't PROS, it was another pricing vendor and they were struggling with it big time, and they called EY and to do an assessment of where some of the big problems are that we are having. When we went in to do that assessment, we asked to Bernard's point, the consultant are going to ask you a bunch of questions. We asked those bunch of questions that, "Who owns pricing in the organization?" IT was pointing business, business was pointing IT.
Kunal Kothari: "Where are your pricing governance procedures documented?" We don't have any of that documentation in place. "What is your data profiling plan for you to clean up your data for it to be ready when you implement a system?" Because otherwise garbage in, garbage out. "We don't have a data profiling plan." And then our recommendation was that, "Hey, you need external support here. You are all trying to do this in-house and we usually always support with optimism bias. Whenever we start projects like this, everything is going to be nice and pretty and super." Right. But guess what? Like ask for help when help is needed. Data is not an easy area. It is one of the areas that you certainly are going to need external help, if not in the full execution of it, at least in planning for the execution of it, right? So in this instance, what we did, we quickly set up a plan for that client. We identified doing the box model of business and IT respectively owning the pricing and the product data and the customer data for them. We provided them with the data profiling plan. It was no longer kryptonite for them. They knew what to do next. Right. So system and data readiness extremely important from a pricing and CPQ implementation standpoint, right.
Kunal Kothari: The second point goes around the whole process around having standard governance methods, processes in place, right. I'll talk about another client. Now, this client was in the real estate space that three big business units, and this is the example of a CPQ implementation, right. And again, similar story, CPQ implementation was going in the wrong direction. It wasn't completely in the wrong direction, but it was starting to trend to and because of the relationships that we had with the client at the executive level, our coordinating partner from the UI side and the CFO of France [0:15:46.8] ____, they talked about it. UI both the technology consulting side and the business consulting side was brought into the picture over there.
Kunal Kothari: Again, we started asking them these questions, "Where are your future state process flows?" "They were undocumented in the disguise of we are doing agile implementation." "Where are your requirements that you finally convert them to user stories?" No answer. "Are you using a show and tell approach to drive your requirements? Because otherwise business is giving you requirements just assuming some things that they have in their head and unless you actually show and tell them and so that they can give you very specific requirements," right. No answer. We gave a report out and then we actually spent just six additional weeks. So the project got delayed by six weeks where we were able to nail down the future state process flow with the three business minutes bringing in as much standardization as possible. We were able to draft the user stories that were development ready and the project ultimately was impacted only by six weeks. The CFO took that on a ready made plate like this is, "I would to take this any day over a six month delay" Is what he said, right.
Kunal Kothari: So very important that you have a mechanism, you have an upfront phase in your implementation where you have a heavy design phase involved to do your process, future state process flows, your user stories which are ultimately driven from the requirements that you gather from your future state process flows. Any experience on this aspect? I think this is an area that sometimes really get missed out on. And if you don't choose a true transformative partner, you're going to completely miss this step. And that if that's SI, if they're not well experienced, they're just order takers versus challenging you in the implementation process, you are going to fall into this issue a lot. So make sure that you, number one, get external help. Number two, get the right help. Get the people that are willing to challenge you, not the people that are going to just say yes every time you ask them for something.
Kunal Kothari: Third one, this is very near and dear to my heart. The first two were a little bit of a negative story. Like something was going or wrong and we had to come in and course correct it. This is a, the other way around. It's a positive story. So this is a client in the manufacturing space. They're a big HVAC water heat company and they were undergoing a big digital transformation. So it was not limited to just pricing and CPQ. Pricing and CPQ was just one of the elements of the digital transformation. They were on their journey to completely transform themselves digitally. Then when they issued the RFP, it was very narrowly focused. It was, "Hey, we want to implement CRM." Right. So we basically asked them in the RFP process, when you're given the options to ask them questions, "What does your roadmap look like?"
Kunal Kothari: "We don't have a roadmap." I'm like, aren't you guys on a digital transformation journey? They were like, yes. We were like, you have to alter what you're asking in your roadmap. [chuckle] What you're asking is very, very limited. We persuaded and we were able to successfully persuade them that hey, we are not gonna be providing you an RFP response on a CRM. We are going to be providing you an RFP response to get you to a five year roadmap first out of which CRM might be or may not be the first initiative that you might pick, right? So we went on a drive with them. We won that project because guess what? We challenged them in their thinking process. They love that. They were not thinking outside the box. We were able to help them drive that. We won that project and CRM happened to be one of the first things that they picked up.
Kunal Kothari: The next phases are still to follow, pricing and CPQ is the next phase that is going to come up. But what is very interesting, and Bernard is going to touch base on this a little bit, that we created business cases for the immediate initiatives that was on their roadmap, primarily the CRM pricing and CPQ, right? We took benchmarks from companies and vendors like Microsoft, from PROS. We looked at their internal numbers from a sales perspective. And this is also customer service. So from a customer service perspective, we extrapolated the numbers from a sales productivity standpoint and a service efficiency standpoint, and we were able to give them an approximate range that over the next five to seven years, what is the NPV that they could drive from these initiatives, right? And this serves a couple of purposes. It gives you a guide, the guiding light, a north star of where you're driving your digital transformation towards.
Kunal Kothari: Number two, it significantly helps you in getting executive sponsorship because your executives know what you're doing. What is coming in the next three to five... Executives are thinking three to five years down the line. They're not thinking about next six months. So it helps you to get that. Number three, it helps you to control scope creep, right? Because your business is going to ask for, Hey, where is this and where is that? You can just bring up this roadmap and say, this is where it's going to be two years down the line, not now. So I highly recommend that you have a transformation vision and a plan that is a part of implementation readiness. So this slide I'm not going to walk through because this is the culmination of all the three case studies that I mentioned to you. So in the interest of time, I'm going to skip over this case study, but to my point, once you have the roadmap and you have the executive sponsorship that lays the foundation, sows the seed for user adoption. And now since we are on a topic of user adoption, let me pass it over to Craig, who'll go over the user adoption aspects first.
Craig Zawada: Thanks Kunal. So Kunal, before I start, I'm gonna ask you a question on data readiness. One thing that we've experienced over the years is sometimes companies, they think they have to have everything ready, right? And that could take years. So in other cases they'll say, "Okay, we're not ready. We're going to have manual integrations into the system, but let's get started. And we build those over time." So maybe if you can share some experience, like how do you know when you're ready without waiting too long to achieve the transformation?
Kunal Kothari: Absolutely. So generally what we recommend is for the 80/20 rule 'cause if you keep on waiting for perfection, you're never going to get that. So as long as you are at a point when you can cover 80% of your transactions, 80% of the revenue are covering business units to cover 80% of the overall revenue for the organization. That will be a good point when you can say that "Yes, I think, let's go ahead." 'Cause guess what? You're never going to be able to have everything ready. There is no cutoff that I've ever seen or ever had observed if when is ready because if you wait for the perfect moment, the perfect moment is never there. So usually it's always the 80/20 rule. Think about personnel and scenarios that will cover 80% of the transactions and plan your projects based on that.
Craig Zawada: Yeah, and the one example I can think of is a client... A customer was, they had their, in the rebate system, they had very few rebates that they did, and it wasn't... They did it manually. Okay, just put that in manually in the system. You don't have to integrate everything into the data model. Okay, so let's talk about software adoption. So as Kunal mentioned, we have everything ready. We have the vision mapped out, we've bought the software, and now everyone's gonna use it. I think it was Angela who said it's gonna be a breeze. Is that typically what happens? I think not. Usually we're asking people to change their mindsets and behaviors of using a system. And I would say that if we're going to go after this vision of creating a price advantage for a company and to adopt the best practices in AI, we have to focus on software adoption. And so what I wanna share with you it's a simple framework that we wrote about in The Price Advantage, and we've used it at PROS with a lot of our customers to methodically think about hitting all of the elements of driving user adoption.
Craig Zawada: The first is fostering conviction. This was talked about a lot in the panel this morning. It's the why, why are we doing this? What's our vision of the future and what does it mean for the company and individually to the person that's using it? And then are we fostering this conviction over time with depth across the company with frequency? And I'll go through an example of this. So that's the first element to drive adoption, is you have to foster conviction. The second is developing role models. Amanda from Wesco talked about this, about spending time in sales. Because if leaders aren't changing their behavior and acting differently, they're not gonna be role models if it's just coming from the top or say the pricing group. And then is the performance dialogue happening in a new way given the new metrics? I'll go into more detail on that. So foster conviction, developing role models. The third is talent and skills. So if you're asking people to do something differently, they need to understand why, what's the basis of guidance, for example, how do I use it? And if they're not using it, there needs to be persistent follow up in terms of talent and skills.
Craig Zawada: And then the last element is reinforce with formal mechanisms. The first one here, approval processes. I'm not a big fan of speed bumps in a pricing process. I think it should be no more than 15% of transactions go through an approval process, but in some cases you may need it if you're going below four and having to get rigour on that. So that's a formal mechanism. Another is target and metrics. So what are the targets? What are the metrics that you're using to measure success and then rewards, recognition and consequences. So two key messages. The first message is that in our experience, approaching this in a very methodical way, systematically, am I covering all the bases, will increase the chances of driving user adoption. And the second key takeaway is that you have to follow up. This isn't something a lot... I see a lot of projects, they do it at the beginning, okay, what's our change management plan? But there's no follow up. So it's something that you have to come back to and you have to do all four of them. So if you do one, two, or even three of them you're not gonna increase your chances of success to the greatest degree. So let me ask you, what are some of the common failure modes? Where do things break down on driver adoption? On driving user adoption? Any examples?
S?: I think when they don't have to, when they've got a really easy to use legacy. When they still got lots of access to legacy, then they're not going to.
Craig Zawada: So they don't have to use it. That's a good one.
Kunal Kothari: The big one that I have on this one is, and we spoke about it a little bit this morning, is the messaging is very important [0:27:46.5] ____. But when you talk about, hey, this project is going to help you be more productive and more efficient, that's wrong messaging because guess what, your users will be like, are you telling me that I'm not productive and I'm not efficient? Right?
[laughter]
Kunal Kothari: But if you, especially when it comes to sales people, right? If we tell them that "Hey, these projects are going to help you sell more, sell bigger deals, sell faster and [0:28:07.0] ____ customer satisfaction. Help you spend four months outta the 12 months on a golf course, that is what they want to hear. That is what drives user adoption. And the messaging is very key when it comes to that.
Craig Zawada: That's a good one. Any other ones? Role models? Where does that break down?
S?: We don't have leadership support.
Craig Zawada: No leadership support?
S?: I think there is conviction. They see the benefit, but during the whole transition transformation on implementation, there is business team, existing user group, user personnel, they will be investing time and energy. The deployment team. And there is sometimes challenges on availability of [0:28:49.0] ____.
Craig Zawada: So you're gonna slow down the business if you introduce another... That's a great point. Yeah.
S?: They have to bring them off their activities. Focus here. How is that, how is that?
Craig Zawada: Okay. Some of the ones we see, failure modes, fostering convictions. So the importance of pricing isn't pushed... Reinforced after the initial push. CEO this is a priority, but then something else is a priority next quarter, pro-story not translate into benefits of the user. Kunal, you've touched on this and I'll go through an example not brought down to how this is gonna make your job easier. How you're gonna make more money. So it's all talked about at the corporate level. Role models. This is one where I see a lot of companies, they don't spend enough time with sales management because they're running the business, they're trying... They need deals, they need deal velocity. You're trying to interject and say, we want you to have a different conversation with your team and we need to make that easy for you to have that conversation. So having them as role models is typically one area that's overlooked a lot.
Craig Zawada: PROS metrics aren't reviewed in sales meetings as an example of that, and I'll go through a best practice example, developing talent and skills. So little pricing training made available, non-ad adopters, they're not contacted after, why they're not using the system. And then formal mechanisms, sometimes we think that okay, they have all this information, the processes, the systems in place but we don't spend enough time on conviction, skill and role modeling. So we've got the system, we're not spending the time on all these other elements. And then it's under rewarded in performance, in reward systems. So I'll give you an example of a company in the high tech area. So this was over a hundred billion dollar company and they they implemented the pro solution. And one of the things they did is they used this framework and they came out with a plan, with a roadmap, exactly Gantt Chart when we're gonna do things. And they had a very successful implementation, high adoption rate. So one of the things that they did, the first thing is the CEO was personally involved in the communication.
Craig Zawada: Interestingly, margin was not the reason they initially bought the PROS pricing. It was that it was time to quote, they were getting a lot of negative feedback from resellers that we won't even go to you if we know it's a deal that needs to be done quickly. So time to quote was just, it was, this is our priority. We have to be frictionless to deal with. And in order to do that, pricing took 68% of the time in doing a quote. So if they don't fix pricing, we're not gonna fix quoting. So that meant that connected with salespeople, that affects sales revenue in addition to volume. So margin. So she would be personally involved in that targeted effort to understand the root cause of early margin reduction. So when they turned it on in a pilot region, margin went... Didn't go up and everyone was surprised. We knew the model would go up and we thought, oh, this is gonna create a negative feedback. But we went into it root cause was because there were contracts that were pre-negotiated before they turned on the system that was driving the margin down end of the year. And so we took those out margins were positive. So that was important to be on top of that, really understand the numbers. Video outlined in the program and benefits.
Craig Zawada: They had a pricing podcast they had a number of videos as an example to drive this conviction internally. And it wasn't just one thing they had where their resellers would come in and talk about. It's much easier to quote the pricing. It's on the mark, it's there. They had salespeople talking about how it was easier to do their job. They don't have to spend time on nights and weekends to do pricing. And they also explained how guidance works. So one of the things in the high tech market is it's a moving market. So a lot of the sellers were concerned, oh, you're using past data. So they explained how the guidance adjust when new transaction data comes in and built into the model. So they had a series of videos to make it, it didn't open, get deep into the science, but explain to people so they can understand what this was based on and build their confidence. On role models they had consistent dialogue from the top. As I mentioned, key metrics were identified. One of the things is my favorite measure in guidance, it's APT average price to target. Cody knows this on our customer success team.
Craig Zawada: They had one measure, it's average price to target. So when you measure people based on margin, there could always be excuses, well, I'm selling to big customers, or I have this product mix that has a inherently low margin, but APT gets around that because you're looking at the average price to target. And you can build that up all the way at the company level, how you're doing, how you're trending. You can look at a regional level, country level, you could look at a salesperson level. So they implemented that and it was a consistent measure. Everyone understood how it was calculated, and it served a basis of the performance dialogue. So the RVPs knew they were ranked relative to how they were doing on APT, how they were improving and the salespeople would be ranked as well. They knew where they were relative to everyone else, not with names. And they used that for coaching. So they had five in five. A sales manager would spend time on five accounts and five products where they were underpriced, where there was the most margin available if they priced a target. So that's a great role model because they spent time on it. They knew that the only way to increase my EPT is if I understood what the T was, what the target.
Craig Zawada: If I'm not looking at the target, there's no way to improve that. So that was very critical to build this role modeling and build commitments 'cause people knew it was being looked at and they were being measured based on that. Talent and skills, country BU leaders, they were trained on the system. So one of the things, if you're in a global enterprise or you have a distributed system where PNLs reside in different areas, people are wary about, oh, this system's gonna decide my margin, yet I'm evaluated based on margin and profitability. But the country CFOs and BU leaders were able to adjust the guidance based upon where they knew the market or where they thought they knew the market was going or what the financial pressures that they were under. And so the countries they were able to, if they wanted to test for example, to be more aggressive in a product line, see if they can gain market share, they could go in and put modifiers on the guidance and test it or if they had a financial shortfall, they could get more aggressive on the pricing side of it. Interestingly, they found they also had best practices.
Craig Zawada: They found that the countries that sort of over managed it, typically didn't do as well as the ones that let the guidance run at it. But they empowered the business leaders to get involved in it. Non adopters were identified and followed up with for retraining. And then on formal mechanisms, I talked about the APT measure, universal simple measure to measure progress. And they got adoption was quite high in the 60%, 65% within a few months of rowing out the guidance. What really accelerated it was when they had an accelerated quota retirement based on the target. So if you were above target, you had accelerated quota retirement. If you were below target it was less. If you were below four, it was zero. And as soon as that happened, people need to look at it and they grew the confidence in this. So I think it's a great example. They generated... They said publicly over 200 basis points, hundreds of millions of dollars from the project. And that wasn't the initial reason for it. It was about speed to quote. But they also generated so both volume and revenue and continued to talk about it and are still a customer. So it's a great example. This isn't rocket science, this isn't the AI about what to do, but I think it's an example of where being methodical, making sure you're covering all these bases in a methodical way can increase the chances of really driving adoption.
Bernard Kang: All right. Thank you Craig. We've got like three minutes left and I sort of knew this was to happen. So I've got until 2:15 or so if you wanna keep talking or have questions, I'm happy to hang out. But otherwise... [laughter] I've got no control. Thank you. But otherwise, let me share some thoughts on value measurement. Value measurement, again, I said like I'm an MBA mathematician, which just means I'm good at basic math and extrapolation, but this is like an art as much as it is a science. And it's important to get an understanding of how you're gonna do this as early as possible, ideally before you begin the program. So I wanted to share three different ideas on how people typically do value measurement.
Bernard Kang: And I'll do this quickly. Like adoption is kind of the go-to default. Everybody does it, like how many people logged in? How many quotes? How many price? How many page views? How many... How much of our product portfolio is in the system? The reality is that's not really... That's pretty far from actual dollars and cents value measurement. It's the easiest thing for us to do. So we all do it. But at the end of the day, when if your CFO asked you how much value you created through pricing or CPQ and you give them this, that's gonna be kind of a rough conversation. So what most people try to do, they try to get to this middle category, is what I call soft value measurement. So number of price changes. So if I've... If I sell a million units and I raised price by a dollar in a system and so I just made a million bucks. Right?
Bernard Kang: Is that gonna fly? We could all make that argument, but that's gonna... That's kind of a grade school level kind of argument. And then there are other things like time... Well, Craig referenced earlier like number of hours spent on quotes. Everybody agrees, all the research shows if you can respond faster to RFQs your win rate does go up. But again, what if your turnaround time on quotes goes down but your win rate goes down and then clearly that's not the whole story. There's more to it, right? And so, although most people they start here and they're trying to get into the middle. But even these metrics in the middle are insufficient for the task. What we really need to do is get as close as we can, as best as we can through this concept around hard value measurement. So actual revenue growth, margin growth, actual selling price growth, increased win rate.
Bernard Kang: And then this is where we can spend the rest of our lives trying to measure these things. I'll just quickly give you two examples of how we've done it. One, we help the client implement price optimization. And we tracked six... We tracked a hundred decisions that they made, their marketing managers made with the price optimization engine. And they changed prices and pushed it out to the market. And we waited three months. Which was the sales cycle for them. And we tracked the outcome. And in that particular example, 80 out of the hundred decisions turned out to be margin accretive, for them that was a wild success. And we could tie that back to actual dollars and cents. That if the CFO asked what happened you could explain. Here's the financial result.
Bernard Kang: So I think that was probably the best that we've done or I've seen as far as the most credible way to do it. 'Cause there's an actual point in time where a decision was made. An action was taken. And we could actually see the result in the market. The problem is you cannot scale that. You cannot do that forever. We were actually using paper and pencil and a notebook. And kind of plug it into an Excel and generating reporting in that way. So the second response to the two questions that came up earlier. How do we scale something like this? You do need a data model and a report. And so we've also done that with clients where we say, all right, we've gotta be able to define what we mean by price improvement. So how much of price improvement is price? How much is reduction in discount... Discounting being offered? How much of it is coming from rebate adjustments? How much of it is coming from mix? How much of it is coming from inflation? If we break that down and track it back to the actual data sources so that this becomes an automated report, then you've got something that's scalable out...
Bernard Kang: Well, your question I think was sustainable. One of you said scalable, one of you said sustainable. But both right? Now you've got a report that the entire organization... I think Craig mentioned this point as well. You need to have reporting that's not disputable. You're not allowed to bring your own data to this discussion. Once you got everybody looking at the same report, in this case, what had previously been a six week process for this company to report on price performance, now is an automated report that shows up whenever you want it. That's actually the end state that we need to get to on this sort of thing. And the final point, I'll make all the ideas that Kunal and Craig and I have shared. Ideally, you are having these thoughts and building these before you start implementation.
Bernard Kang: And in that case, that all becomes the value of realization, actually becomes part of how you think about implementing. And then at the end, all of us put together a business case at the beginning to get the funding. And a lot of times at the end, we never look at that thing again. That's the most common case. We don't wanna be creating a story at the end, right? We wanna have that story written essentially before we start. And we are just filling in the punctuation at the end. That's essentially what it should look like when it goes well. So with that, I'll just say, hey, we all know why we got into this. And so the responsibility is... It's incumbent upon us to figure out how to communicate, how to capture value effectively and then communicate it effectively to your management. So hopefully you got a... One or two ideas here. I said, we can stick around a little bit longer. You can follow up with us directly by email and such. But otherwise, we're kind of at time, so I'm happy to to release you. There's no bell or anything, so feel free to stand up and walk right out. Thank you for coming.
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