Negotiation is a very complex process for wholesalers because they hold an extremely large saving potential. Agreements are immensely important for achieving an expected and needed margin but also for creating customer loyalty and control of customer behavior. Furthermore, a large variety of different sources for calculation increases the negotiation complexity. Additionally, it is extremely difficult to gain overview and estimation of impacts from very creative and complex kinds of agreements.

Examples are:

  • 5% of the revenue achieved with product group XY to be reimbursed
  • Growth compared to the previous year (quarter, month) to be incentivized
  • Higher rebates for new products
  • Rebate for attending product trainings
  • Fixed amounts (conditional and unconditional)

Challenges

Many customers are still working with manual settlement processes including massive media breaks by using different tools like Word, Excel, Access or paper and other formats. Partner dependent settlement processes are not unusual, as well as retrospective master data changes resulting from fast changing market requirements and general market changes.

An example for such market changes is that companies start to facilitate multi-/omni-channel formats. Another example is the burgeoning of new purchasing alliances of multiple traders which create new complex negotiation forms and contents.

For these complex negation results a system-supported reproducibility of different agreement types is not given, which is causing an increasing lack of transparency and an increased demand for comparability. Eroding margins have become a large problem that requires better negotiation preparation (creating best-, worse-, expected case scenarios before the negotiation) to close the lack of forecast and simulation.

Plan and control Real time decision-making for productive negotiations

With this solution, customers can visualize the impact of any deal and future profitability before their negotiators create an agreement. They can get help with enhancing and protecting their profitability, while simplifying their overall purchasing and negotiation processes, through real-time simulation and analysis. The increased visibility of margins and profitability allows wholesalers to reduce the cost of goods sold through a streamlined, closed-loop process.

By centralizing all agreements, wholesalers can make relevant information readily accessible to their buying and/or selling teams, whether they are in the office or off-site. They can also eliminate diverse information sources and manual agreement processing.

With full transparency before, during, and after a negotiation, negotiators can control the status of agreements, purchase-price development, and annual negotiation and purchase revenue targets. They can also improve their flexibility to negotiate on different organizational levels and various category and article structures.

Benefits

  • All negotiation information at hand – any time, any place
  • Detailed preparation of negotiations with various negotiation scenarios and differentiated target definitions
  • Simulation of condition earnings at all levels (articles, article groups, vendor, customer) for a best-in-class negotiation
  • Improves profitability at all levels by simulating, comparing and analyzing financial variables of all negotiations
  • Full transparency on all agreements and negotiations
  • Management and monitoring of all terms and agreements (e.g. returns and logistics) and their resut6s along the entire
  • Agreement lifecycle – including all documents
  • Automated settlement and distribution with a standard interface to SAP Settlement Management Solution (SM) / CCS
  • One integrated system – no translation of agreements between different departments necessary
  • Fully integrated into SAP standard – prevents system discontinuity

Negotiation Process

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