This post is also available in: polski (Polish)
The pricing of products is one of the most important aspects of doing business. The level of prices affects operating profit, so companies attach great importance to the development of an appropriate pricing strategy. The determination of the final price involves a lot of data that needs to be taken into account. Any randomness or mistakes are out of question, so the right analytical tools play an important role. Stock Polska has opted for the SNP Pricing for Profit solution, which aggregates material price data, including taxes, discounts and customer subsidies, in a single place. It provides an overview of what the company offers its customers on a daily basis, without a tedious and time-consuming analysis of pricing conditions.
Beginnings of the project
In November 2016, Stock Polska asked SNP Poland to develop a solution that would enable price changes in the SAP system in accordance with the criteria adopted by Stock and described in the internal policy. One of its key requirements was the ability to change prices in accordance with the four-eye principle – one user makes a change, another user must confirm it. Other requirements included a wider control of price changes, including authorizations, and a unique and uniform manner of data entry/preparation.
SNP Poland proposed a solution that would not only meet the criteria mandatory for the customer’s internal policy, but would also be a convenient tool to facilitate the work of end users.
After webinars and numerous business meetings, both at Stock’s premises in Lublin and online, it was decided to implement SNP Pricing for Profit as a solution that would fully meet the customer requirements, while providing many additional options.
And why not the standard?
The question can be asked – why were the standard SAP tools not used with the simultaneous modification of the company’s processes? This option was rejected mainly due to the requirements of the internal policy customer, which, with the use of standard tools, were impossible to implement in a way that would ensure data security, e.g. it would not be possible to use the previously mentioned four-eye principle supported by appropriate authorizations. Furthermore, standard tools do not enable price changes to be linked with SAP WorkFlow, and most importantly, they do not allow for mass price changes. In addition, price changes with standard transactions have a direct impact on business, without giving you the freedom and security of detailed analyses of changes and making decisions without unnecessary haste, which in turn is enabled by SNP Pricing for Profit, where you can work with planned prices.
The whole process was discussed and refined in detail as part of preparations for product implementation in order to increase the effectiveness of the implementation and fully meet the customer’s needs. Key arrangements:
The person preparing the data:
- Develops a data proposal in Excel
- Checks the correctness of the data (e.g. via simulation) and then submits the data for approval.
In order to send the data, the system requires the responsible persons to approve price changes using SAP WorkFlow.
The person accepting the data:
- Receives a request for confirmation of price changes
- Verifies data (simulation is also possible at this stage)
- Accepts price changes (transfer of planned prices to actual prices) or rejects the scenario.
The division of the process into the data preparation part and the acceptance part fully met the Stock Polska. An additional element of data and decision security is the work on the basis of planned prices. Planned prices, until the final acceptance, are only proposals and have no impact on business processes, hence the comfort of work of the person preparing the data is greater, and the responsibility for the prices is spread over several stages. The final goal of the solution was to eliminate randomness in the price change policy.
Price control and additional tools
By choosing SNP Pricing for Profit, Stock Polska wanted to obtain a tool which, on the one hand, would be easy to use and safe, and on the other hand, would allow for easy adjustment to changing expectations or adding more functions in the future. SNP Pricing for Profit is such a tool. With a wide range of customizations, as well as the ability of adaptation by means of a built-in extension system, it allows the software to be tailored to the customer’s specific needs.
One of the extensions implemented for Stock Polska was the Transaction Price Simulation submodule. This submodule allows users, both at the stage of preparing data for price changes and the acceptance of planned prices, to track the impact of these changes on the transaction price calculated on the basis of rules defined by the customer (in a way similar to standard Pricing). Simulation through a clear presentation of the actual transaction price value and its comparison with the calculated value on the basis of planned prices allows the customer to analyze the data in detail, especially in the acceptance phase. Therefore, the extension ordered by the customer meets the following basic aspects:
- Checking the impact and value of the transaction price after changes, if any
- Avoiding wrong or unprofitable decisions about price changes
- Eliminating accidental user errors.
When talking about the product and processes handled by Stock Polska employees using the SNP Pricing for Profit tool in their daily work, it is worth taking a closer look at how the product is built and how its individual elements are used by employees.
Employees start working with the preparation of data in Excel, putting it simply – they prepare a proposal for price changes with the possibility of simulation and load the data into the previously prepared scenario. It is worth mentioning here that these are planned prices, so this stage has no impact on business processes and that this step can be executed only by the persons authorized. Next, they send a request for acceptance of the scenario (price change) to the persons responsible for acceptance. At this point, the product is supported by SAP WorkFlow, defined and adjusted to Stock Polska processes.
In the next step, in accordance with the four-eye principle, the persons authorized to make the acceptance review the data; the four-eye principle does not allow the acceptance to be made by the same person who entered the data in SNP Pricing for Profit. At this stage, users authorized to accept prices via the acceptance panel decide whether to approve the planned prices (in whole or in part) or to reject the scenario completely.
Of course, in this phase they can also use the simulation sub-module to obtain certainty as to the information being confirmed or rejected.
The simulation + acceptance panel allows the responsible persons to detect not only incorrect values as regards the final result, but also accidental errors of users preparing proposals.
This stage, in addition to increasing data security, also allows, more importantly, informed decisions to be made, and thus enables the reduction of the negative impact of accidental decisions on the company’s business processes.
By verifying and accepting the request (scenario) for price changes, the user orders the transfer of the planned prices to the actual ones, which only after acceptance become effective in terms of price condition records.
In order to increase the security of the processed data, the whole process from the moment of creating the request (scenario) is logged, which enables authorized persons to review the changes and verify the correctness of the performed processes.
SNP Pricing for Profit in compliance with our company policy
The implementation of SNP Pricing for Profit in Stock Polska was initiated by the requirements of our internal pricing policy. According to deployment rules, it began with the preparation of the concept, through drawing up the BluePrint and its implementation. The final phase was PCT (internal tests) and UAT (customer tests), which ended with the go-live of the tool. The SNP solution not only met our objectives and requirements, but also provided a tool that allows us to make decisions about price changes with full control and data security, also in a mass manner.
In addition to the tool itself, users also received post-implementation support, which allowed them to adjust the product to the needs that arose during the actual work.
Such adjustments include dynamic simulation dates, the creation of new price condition records and simplifications in the acceptance process.
As a complete tool, the product can be called a hybrid, which combines proprietary solutions, such as mass price changes, with standard SAP solutions, such as WorkFlow, creating an entirely unique solution on the market.
Aziz Seker, Group SAP Architect, Stock
Stock Polska Stock Polska is a leading company from the alcohol industry in Central and Eastern Europe. It is part of the international company Stock Spirits Group. Stock Polska’s specialties are both flavoured liqueurs: the Lubelskie family and a dynamically developing portfolio of pure vodkas, including Żołądkowa de Luxe, Stock Prestige, Orkisz, as well as Żubr and 1906 vodkas. A wide range of products awarded in international competitions determines the unique position of the company in the Stock Spirits Group.