Not long ago, I wrote about the pricing management and optimization software market, and in particular depth about two bullish vendors and fierce competitors in the business-to-business (B2B) manufacturing and distribution segments: Zilliant and Vendavo. Look for similar write-ups down the track on DemandTec, Symphony Metreo, and on the Servigistics pricing solution (whereby the last will focus solely on spare parts pricing and planning).

While I do not plan to cover the esoteric pricing solutions used by airlines or hospitality companies (e.g., Rapt or PROS), there is also a vibrant pricing market in the retail sector, as seen with SAP’s acquisition of former KhiMetrics and Oracle’s similar acquisition of ProfitLogic. In addition to TEC’s article entitled “The Retail Battleground for Pricing Management”, you can find more information about SAP’s perspective on the pricing market here, and Oracle’s pricing offering here.

But, the dates of all these articles will indicate that they were done during a still-solid economic milieu worldwide. It doesn’t take a genius to realize that we are now in quite a down economy. Given the dreaded “R” world hovering over us, are there any trends (or hunches) on how manufacturing, distribution and retail organizations use pricing solutions? Namely, do the enterprises have different pricing approaches in good vs. bad economic times? Read the rest of this entry »

Part I of this blog topic introduced MCA Solutions and its flagship Service Planning Optimization (SPO) solution for planning and optimizing spare parts [evaluate this product]. That blog post also tackled MCA’s notably good times during 2007. In the meantime, an informative post on MCA was also published by the Sourcing Innovation blog.

A related 2007 milestone at MCA included a significant expansion with both new and existing customers in core markets, including aviation and defense (A&D), high-tech, and semiconductor manufacturing. Specific wins included the first joint effort with SAP for a large commercial aircraft manufacturer, expanded work with the US Navy to include planning for the entire naval aviation fleet, and successful deployments at new medical and capital equipment customers.

In addition to working with the largest corporate customers, MCA also cited growing revenue in the mid-market.  With its SPO OnDemand Software as a Service (SaaS) offering, MCA hopes to bring to smaller service organizations the same capability that service leaders in the Fortune 500 are seeing value from, but with a much lower upfront software and information technology (IT) infrastructure investment.

These benefits are attributed to lower monthly costs and faster implementations. The vendor will be expanding this offering in 2008 to make it even more appetizing and faster to deploy. The most recent win with the OnDemand SPO solution at Unisys Corporation might be a sign of succeeding with on-demand model at larger corporations as well as appealing to the mid-market. Read the rest of this entry »

Regardless of the economic environment (and sentiments), I always think of the opportunity within the aftermarket service and support as a profitable, high-margin and customer-captive business, and yet, still underserved. General Electric (GE) would be the proverbial example of a company that has focused on aftermarket opportunities, going so far as to call itself a “services” company as opposed to a “products” company.

GE indeed, starting with Jack Welch’s long chief executive officer (CEO) tenure, has been widely reported to have significantly increased both its total revenue and profitability by focusing on services opportunities in addition to developing world-class products.

The manufacturing corporate giant has certainly proven the value of serving the product aftermarket, which has recently been purported in a quantifiable manner by many pundits as a high margin business. For instance, AMR Research reported recently that businesses earn 45 percent of gross profits from the aftermarket, yet it is only 24 percent of their revenues, while a recent article in Harvard Business Review claims that we all spend US$1 trillion every year on assets we already own.

A related software category term was mentioned in TEC’s 2003 article titled Service Lifecycle Management - Tapping into the Value of the Product Aftermarket. Namely, Service Lifecycle Management (SLM) is a business initiative focused on servicing a company’s products, and the customers that bought them, after the product has been sold. Simply put, SLM focuses on making more money from the product after the initial sale. But it is more than that — it is also a way to become a strategic part of the customer’s business after the sale is completed. Read the rest of this entry »