We’re in the middle of a transition period in how pharma companies conduct business globally, in which global pricing is taking center stage. Launching a new drug in any country can have [...]
In case you missed it, here is a quick recap of the industry webinar, Regulatory Compliance and Contract Management for Emerging Life Sciences Leaders, featuring Maria Mangler, Director of [...]
Lurking in your sales quoting process is the monster spreadsheet. It’s big, cumbersome and sometimes unruly. You’re team has been using this manual system to create quotes for so long now that [...]
Lurking in your sales quoting process is the monster spreadsheet. It’s big, cumbersome and sometimes unruly. You’re team has been using this manual system to create quotes for so long now that it’s hard to imagine doing it another way.
The Excel whiz that created your quoting spreadsheet system probably thinks it’s like a hand-built Ferrari engine. He is proud of it, but it’s admittedly complex. Of course this provides some job security because he is likely the only one who can maintain the monster. Your sales people may also be comfortable – very few people like change – even though the manual configure, price and quote process is time-draining and error-prone.
Maintaining the status quo, because your team is used to it, is not always what’s best for your business. Despite being the industry standard for spreadsheets, Excel has clear drawbacks when it comes to creating sales quotes. There are some things Excel simply can’t do for sales users.
1.Setting rules. Adding new rules can be a cumbersome process. The formulas and tables can be very confusing for someone who is not updating the spreadsheets daily. So, generally, a sales department relies on an Excel guru to administer the quoting system and maintain the rules. In many organizations it takes days and lots of testing to get new rules working correctly and to make sure the rest of the rules still work too.
2.Quote approval. A big pain point for many organizations is getting the quotes out the door. Because sales users need to gather information from disparate pricing sheets and input them into the quoting spreadsheets, the organization spends more time on quote approval. Did the rep use the latest pricing sheet? Did the rep correctly select the right combination of options and service plans? Is this a special price request that needs additional approvals? Manual quoting requires manual verification of accuracy and approvals that slow the process.
3.Scalability. As businesses grow, their product and service offerings grow with them. Thus, their quoting spreadsheets keep growing and growing. For complex products and recurring services, manual quoting eventually becomes impossible to sustain while delivering accurate quotes to prospects.
4.Maintenance. Relying on one Excel whiz to maintain your configure, price and quote spreadsheets is a disaster waiting to happen. If the whiz is unavailable or on vacation, then peers will likely struggle and may be unable to figure out the calculations or unlock the spreadsheet to make updates. There is also the risk that your organization may not be able to access your spreadsheets on shared network drives because they were accidentally deleted, not backed up, or the network drive was unavailable.
5.Real-time data. Another downside of the cumbersome, manual quoting process is that you can’t see your sales funnel. Sales managers have little or no visibility into the history of quotes that reps or channel partners send to prospects or what’s in the pipeline. Without some intense custom reporting and an individual dedicated to generating these reports on a regular schedule, you’ll be hard pressed to link your quotes with an opportunity, so you can see value of your deals today.
We understand that sales organizations and administrators can view their Excel system as a security blanket of sorts. But it’s this false sense of security that slows down your quoting process and puts deals at risk. Cloud-based CPQ software can liberate your sales team from the spreadsheet monster, so you can maximize the value of every sale, quickly.
Learn more about what you can do with automated CPQ solutions and how to capture more revenue faster.
Over the past few months, a growing number of our pharmaceutical and medical device customers have celebrated the Go Live of Model N Express. What is Model N Express? It is Model N’s new offering [...]
Over the past few months, a growing number of our pharmaceutical and medical device customers have celebrated the Go Live of Model N Express.
What is Model N Express? It is Model N’s new offering which allows tomorrow’s emerging life sciences leaders (pre-market, small and mid-size pharmaceutical and medical devices companies) to benefit from the tremendous value of Revenue Management, at a cost that fits in their budgets and resources, and at an accelerated speed of value.
Model N consolidated all the best practices learnt from larger life sciences organizations in the past 15 years and synthesized them into a set of implementation accelerators and standard operating procedures (SOPs) that allow for faster time-to-go-live.
We consider it a game changer for so-called “mid-market” companies. Until now, limited by both personnel and budgetary resources, companies with revenues under $1B worldwide had to manage commercial contracting and government compliance processes with limited custom internal IT developments, spreadsheets, or even pen and paper! As a result, they were often at risk of overpaying incentive rebates, miscalculating their distributor chargebacks, paying fines for misreporting prices applicable to government agencies, and more.
At Model N, we heard the midmarket needs loud and clear and decided it was time for this important segment of the market – some of the most innovative companies in the industry! – to be able to automate these business critical process and, doing so, to maximize revenues and margins while complying with regulatory mandates.
Eight months ago, we set out to streamline and accelerate the implementation of our Revenue Management offering for the mid-market. The response from the market has been excellent, as both pharmaceutical companies, such as Keryx Pharmaceuticals or Tolmar Pharmaceuticals, and medical devices companies, such as Sizewise, jumped aboard the program.
Through these early customers, we continued to learn about the unique Revenue Management requirements and needs of midsize companies, and further simplified and adapted our approach. In particular we were able to reassert the fundamental pillars of the Model N Express offering:
1. An implementation is only as good as its data. The earlier the data cleansing occurs, the faster the implementation. With Express, we engage on data as soon as possible to remove any possible hurdle.
2. Management education and empowerment is critical for the business to change quickly. The Express methodology comes with a lot of proven industry business processes that companies need to adjust to quickly. With Express, we communicate about this even before the project starts, so that the customer can realign and comply to SOPs.
3. Automated integration effort also needs to start on day one. Defining what processes to automate, what data to map and integrate are intensive exercises that to start quickly in the Model N Express methodology.
4. Start leveraging SOPs even before the start of the project. Aligning everyone on best practices and accelerators before the kick-off day makes for intelligent, efficient discussions during the first few days of the project.
Our goal is to continue to accelerate time-to-value to maximize value for customers. We cannot wait for many more life sciences companies to adopt Model N’s best-in-class Revenue Management Cloud solutions, thanks to the Express offering!
“Organizations consist of two things. People and everything else.” It is people in organizations, that drive revenue. With this bedrock and belief that our customer are heroes in their [...]
“Organizations consist of two things. People and everything else.”
It is people in organizations, that drive revenue. With this bedrock and belief that our customer are heroes in their organizations, we established this year’s Rainmaker 2015 theme as “Revenue Champions”.
Over 300 attendees swarmed the historic Westin St. Francis HOTEL IN SAN FRANCISCO, a record growth over last year and participated in a symphony of information, insights and innovation.
The roster of attendees represented a cross section of the world’s leading and innovative brands. Bristol Myers Squibb, Baxter Pharmaceuticals, CirrusLogic, Microchip Technologies, Johnson & Johnson, Pfizer, ON Semiconductors, Intel, Fairchild, Microchip, Corning, Abbot Labs, Maxim Semiconductors, Novartis, Astrazeneca, Deloitte, Covidien, Highpoint, etc. were amongst the few, represented by their Presidents, CIO’s, Division CIOs, heads of pricing, contracts, finance and sales leaders.
Experts, thought leaders, industry practioneers, sports champions, business champions, revenue champions were amongst the many, that shared ideas on transforming businesses, maximizing revenue and impacting the top and bottom line.
Roger Craig, the only running back ever to record more than 100 receiving yards in a Super Bowl, was a key member of three Super Bowl Champion teams for the 49ers (1984, 1988, 1989) and a four-time Pro Bowl player. Roger shared insights on how to change the game, how to persevere and how do you transform from being at the bottom to reaching new heights.
Mark Garrett, SVP and CFO at Adobe shared insights on business model innovation, a revolutionary transformation of Adobe with three key insights around reading the tea leaves correctly, burning the boats and having utmost transparency.
Ron Huddleston, SVP of AppExchange and Channels at Salesforce.com shared insights on trust and security in the cloud, data integrity and what companies need to consider when transforming to the cloud.
Attendees at Rainmaker have always been the trail blazers in driving and executing Revenue Management Cloud strategies within their industries. Revenue erosion, poor contract management, compliance risk, poor price optimization – contains seeds of business contraction. With $42M lost in the Pharmaceutical Industry per day ($11B per year per IDC) and $16B lost in the Semiconductor industry ($50M per $1B in sales per Aberdeen, Accenture, AMR Research Surveys) – Revenue Management Cloud applications are mission critical to maximizing revenue. In stark contrast, the leaders at Rainmaker have effectively recaptured millions of dollars in lost revenues.
In a recent survey by Model N, 95% of executives surveyed said that Revenue Management — an end-to-end strategic approach of managing every dollar that impacts the top-line of the business — is critical to the growth and success of their company.
There is a renaissance in Revenue Management and several organizations are moving away from the dark ages of using spreadsheets and custom systems, or no systems to manage their revenue, thereby leaving money on the table.
1. Revenue Management Cloud solutions are mission critical to these businesses.
2. Current state is an illusory advantage. Your business will be transformed, read the tea leaves correctly and join the transformation.
3. Model N provides Revenue Management Cloud solutions but also a path, ie Revenue Management as a Service, to get to a fully deployed cloud solution.
4. Platforms, not point solutions are needed do drive the holistic view required from otherwise disparate, disconnected systems.
Perhaps one of the most important takeaways that inspired, energized and excited the audience was that – Rainmakers are Revenue Champions, the lifeblood of their organizations.
Congratulations to the semiconductor industry for a record sales year! The Semiconductor Industry Association recently announced that worldwide semiconductor sales for 2013 reached $305.6 [...]
Congratulations to the semiconductor industry for a record sales year! The Semiconductor Industry Association recently announced that worldwide semiconductor sales for 2013 reached $305.6 billion, the industry’s highest-ever annual total.
Before we relish the success of last year, semiconductor companies must ask themselves two questions: How can we continue to improve sales (revenue)? And how can we keep more of what we’ve sold (margin)?
Studies show that for every $1B in sales, semiconductor and component companies lose as much as $50M annually to lost opportunities, poor volume and price compliance, channel over payments and other forms of price erosion. That means that these companies are potentially leaving up to $15 billion on the table each year.
McKinsey stated that the use of transactional pricing along with value based pricing can help drive revenue increases 2% to 7% for semiconductor companies. They describe transactional pricing as focusing on minimizing the leakage of revenue. This revenue leakage is caused by ineffective processes that are eroding average selling prices in the opportunity to contract process.
If you’ve read our recent #RevNews, you already know that price erosion is costing chip makers an average of 2.3% in gross margin. But there are other significant impacts to the bottom line as well:
• 9% loss because of unmet volume commitments
• 10% lower win rates due to lengthy deal cycles
• 10% overpayment due to errors in reconciling channel incentives
The issues causing this leakage are primarily inconsistent global pricing, poor price concession controls, channel incentives overpayment and unmet contractual volume commitments which are the result of inefficient and silo processes that do not provide visibility and control.
We live in a world where every penny counts. Companies spend enormous amounts of time and money trying to control manufacturing costs and increase their bottom line, only to negate that effort by unnecessary leakage like improperly discounting prices or overpaying channels.
In the next part of this blog, I will continue our discussion on revenue leakage and elaborate on the issues that are causing it. If there’s a particular area of revenue leakage that you would like to hear more about, please let me know in the comments.
You can also learn more about revenue leakage in our upcoming webinar. You’ll hear how semiconductor companies like Microchip and On Semiconductor have reduced revenue leakage in their sales cycles. Register here.
Webster describes Rainmaker as someone who brings in new business. Another dictionary calls it – one who is known for achieving excellent results in a profession or field, such as business or [...]
Webster describes Rainmaker as someone who brings in new business. Another dictionary calls it – one who is known for achieving excellent results in a profession or field, such as business or politics.
Rainmaker 2014 was Model N’s 10th annual in a series of many successful ones, this one being in historic Savannah. It was my first and I was interested in learning more from the customers and about their thoughts about Revenue Management.
Attendees at Rainmaker have been the trail blazers in driving and executing Revenue Management strategies within their industries. Despite the clear risks and costs, most companies (not the attendees) have very little in the way of visibility and control of Revenue Management processes that could help reduce revenue erosion and prevent non-compliance. Many remain in the Dark Ages of Revenue Management, using spreadsheets and custom systems or no systems to manage their revenue, and leaving revenue on the table. In just one industry, Pharmaceuticals, $11B is lost annually in incentives and rebates per an IDC study. In stark contrast, the leaders at Rainmaker have effectively recaptured billions of dollars in lost revenues.
The over 200 Revenue Management leaders that attended this event were open and willing to share best practices, what worked, what did not, and there was a good, healthy debate on a number of topics. Overall, there was resounding agreement that transforming Revenue Management to a strategic end-to-end process is a clear competitive advantage. Remember I said Rainmaker attendees are trail blazers, leaders, innovators and are increasing revenues for their organizations, they were of course keen on how to take Revenue Management to the next level.
Revenue Management is a cross-functional business process that cuts across multiple-functions such as marketing, sales, finance, and legal. The revenue management process extends beyond the enterprise boundaries into the channels. The current revenue management process is broken. People in various functions in an organization throw things over the wall usually in spreadsheets and hope the other side of the wall will catch it.
At Model N, we thrive on bringing the voice of the customer into our organization and listening to our customers one common theme has been to drive a closed-loop system so that they can link sales and marketing dollars to maximizing revenues.
This requires that we need to think outside the traditional boundaries of Revenue Management. And indeed we have brought Revenue Management out of the Dark Ages and transformed it into a strategic end-to-end process introducing the notion of a single, integrated, end-to-end revenue management platform to integrate people, process, technology, and data. The platform enables sales, marketing, legal, finance, and the channels to collaborate and be on the same page with a single view of revenue.
It’s not about adding and integrating Customer Relationship Management systems and Revenue Management together, but about unifying and multiplying the outcomes. With this vision, Model N has formed a partnership with salesforce.com in which Model N will develop a set of vertical applications under the REVVY brand that are built on the salesforce1 platform, that outperforms traditional alternatives, delivering speed and simplicity and security.
With this partnership and the REVVY applications, we will help our customers maximize revenues for sales, both direct and channel, and achieve three important objectives:
- Maximizing sell time, enabling the sales organization to be in front of customers selling focusing on efficiency reducing administrative and non-productive time.
- Maximizing revenue per opportunity, enabling sales to be effective focusing on the right opportunity, right offering and right pricing.
- Maximizing the number of opportunities.
Our robust unified data platform and robust analytical capabilities enable companies to turn their data into information, insight, action, revenue and revenue growth.
Naturally, a few customers stood out this year for their accomplishments in their Revenue Management journey. Model N recognized these companies with the 2014 Rainmaker Award for their commitment, vision and execution in improving sales effectiveness and Revenue Management. Recipients included: Boehringer Ingelheim, Merck & Co., Micrel Inc., Janssen Pharmaceuticals and ON Semiconductor. You can read more about their achievements here.
I look forward to reconvening at Rainmaker 2015 to hear what you’ve learned, share what we’ve learned and discuss strategies to drive the next step in Revenue Management.