Service Parts Pricing Solution Debuts

New app from Servigistics combines planning and pricing to help companies optimize and manage service parts

New app from Servigistics combines planning and pricing to help companies optimize and manage service parts

Atlanta — March 29, 2005 — Service parts management specialist Servigistics this week debuted a new solution specifically designed to optimize and manage the pricing of service parts.

Servigistics said that its new Pricing solution is built on the same platform as Servigistics' Service Parts Management solution and is intended to help companies stay competitive and maximize profits and revenue through the optimization of service parts prices.

The new Pricing solution is based on service parts pricing expertise and price optimization techniques developed by ProfitScience, which was acquired by Servigistics in May 2004.

"The revenue and profit impact that can be achieved through a change in the price of a service part significantly outweighs a comparable reduction in its costs," said Dwight Klappich, vice president at technology consultancy META Group. "As companies re-focus their attention from cost cutting to revenue and profit generation, they're increasingly understanding the correlation between service parts pricing and company performance, and tapping the power of pricing optimization solutions to maximize corporate performance. We see accelerated growth in price optimization solutions driven by the continued need to drive greater profitability."

Features and Capabilities

The Pricing solution combines strategic pricing methodologies, optimization techniques, "market adaptive business logic" and a global, multi-language, multi-currency open architecture, Servigistics said. Operating interactively from a Web browser, Servigistics Pricing uses historical part data, part characteristics and market information to apply pricing strategies and recommend optimal selling prices to balance competitiveness with maximized gross margins.

Pricing strategies can be modeled and executed automatically with exception-based functionality. In addition, Servigistics said that configurable workflow in the solution can allow those outside pricing but interested in price and volume performance to get involved in the process.

Servigistics said that Pricing customers typically achieve 10-20 percent improvements in gross margins, along with stronger negotiating positions with suppliers, coordinated pricing decisions across all levels of the organization, visibility into market changes, improved control over warranty expenses and identification of undervalued parts.

"There is tremendous pressure on companies today to improve revenue and profits," said Eric Hinkle, CEO of Servigistics. "At any given time, there is an optimal price for every part which maximizes revenue and profits; with Servigistics Pricing the task of finding and maintaining that price is automated and simplified."

Additional Articles of Interest

For more information on solutions for the service and support chain, see the articles "In the Field and All Grown Up," the Net Best Thing column in the June/July 2002 issue of iSource Business (now Supply & Demand Chain Executive), and "Time to Prove It," the Net Best Thing column in the April/May 2003 issue of the magazine.

For best practices in service parts management, see the article "Three Keys to Successful Service Parts Management."