Transforming Service Parts Manufacturing in a Connected World

1TRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLD Unlock Your Data • Unleash Your Sales By Sean Duclaux, Service Parts Solution Marketing Manager, PROS TRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLDTRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLD PB2 PROS + MICROSOFT DELIVER PRICING AND SALES EFFECTIVENESS SOLUTIONS FROM GLOBAL SERVICE PART MANUFACTURERS’ BIG DATA The worldwide service parts manufacturing industry generates more than $1 trillion in annual revenue worldwide. While the industry remains an industrial and economic force, a series of trends have forced suppliers to find ways to become leaner and more efficient. Faced with pressure to cut supplier prices, higher costs for critical raw materials, and increased competition, suppliers have focused primarily on efforts to rationalize capacity and production, and the results have had little positive influence on manufacturers’ margins. THE MOST POWERFUL PROFIT LEVER: The game has changed, and organizations are requiring a new approach to business practices— including more strategic use of the most powerful lever of all: pricing. But maximizing the impact of pricing on business performance is not without its own set of challenges. Accurate pricing decisions must be made quickly, and many manufacturers struggle with time-consuming manual processes of gathering data, analyzing it, and reviewing market trends. You can rise to this challenge by equipping your sales teams with the appropriate tools to help manage the process, enabling you to spend your time acting on big data instead of gathering and analyzing it. Imagine your sales force has the ability to improve its win rate, leave less money on the table, and have a more effective selling capacity. PROS and Microsoft can make this vision a reality by giving your sales teams access to critical information, including active sales leads, pending work items, email, alerts, price approvals, work documents, and the customer relationship management pipeline, all from within familiar user interfaces that have been tailored to their specific business role and connected to market and company data sources. With this solution, sales professionals can initiate price and quote requests and receive a scientifically generated price recommendation from the PROS optimization engine, enabled by Microsoft’s Discrete Industry Reference Architecture (DIRA) Framework technologies. Sales professionals gain further views into the rationale for their recommended pricing through information such as target prices, customers’ willingness to pay, last price quoted, changes in costs of goods, and market averages. Salespeople are able to collaborate among the sales team and among the broader organization, empowering them with both internal and external expertise and knowledge in their negotiations. Armed with this insight, they have valid and actionable data to improve their confidence and make contract negotiations less risky. In addition, sales professionals can quickly generate price quotes and send them to their customers using an automatically populated email template. By leveraging the power of informed pricing, coupled with familiar and easy-to-use tools, your sales team is able to drive improved financial performance. HARNESSING THE POWER AND PROMISE OF PRICING: PROS and Microsoft are working together to provide a tighter coupling TRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLDTRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLD PB3 of Microsoft’s DIRA Framework technologies. The goal is to provide customers with the powerful combination of the two companies’ key strengths: Microsoft’s ubiquitous, easy-to-use, widely adopted and supported productivity tools and PROS’ scientific, dynamic, and feature- rich pricing functionality. PROS and Microsoft recognize that the full potential of a high-performance pricing solution can be more fully realized when the power of advanced science-based pricing is made as approachable as possible to all users. ABOUT MICROSOFT’S DIRA FOUNDATION Microsoft’s Discrete Industry Reference Architecture (DIRA) provides a framework to help manufacturers improve their agility, competitiveness, and profitability. It currently includes six themes that address key business needs for discrete manufacturers as they shift toward a more connected, engaged, agile, knowledge-driven organization. Microsoft technologies, such as SharePoint and SQL Server, anchor these pillars, forming the foundation of a secure, scalable, adaptive architecture. The framework offers a set of guiding principles to help manufacturers select the strategic technologies best suited for their particular business objectives. This approach enables discrete manufacturers to bridge business and technology requirements with a few governing principles that ultimately lead to a connected, engaged, dynamic enterprise. Here are the pillars: • Natural user experiences to simplify human-computer interfaces through “natural” or intuitive inputs like touch, voice, and gestures. • Role-based productivity and insights to empower authentic employee engagement across a distributed enterprise as a venue for immediate and relevant collaboration around processes and information to facilitate decision-making. • Social business to create connections among knowledgeable people and networks of experts to optimize knowledge sharing and skill usage both internally and externally. • Smart connected devices to enable real-time access via mobile devices to perform real-time analytics and to capitalize on business opportunities. • Dynamic business networks to form quick and flexible connections through the value chain to help manufacturers leverage the benefits of an agile connected enterprise across complex business and Comparison of Profit Levers The Promise of Pricing: The Most Powerful Lever to Drive Profits Revenue Focused 5.9% 2.8% 1.8% ® 8.7% IN C RE A SE IN O PE RA TI O N S PR O FI T TRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLDTRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLD PB4 consumer networks, including rapid response and innovation. • Secure, scalable, and adaptive infrastructure provides a cost- effective foundation of software and hardware across mobile devices, desktops, and data centers to support a distributed organization Using technologies that span these six themes increases efficiencies and boosts performance faster in a contemporary agile manufacturing environment than do traditional approaches. THE COMBINED POWER OF PROS AND DIRA PROS and Microsoft understand that successful pricing software needs to deliver meaningful business intelligence to front-line sellers in real-time and to integrate with your existing tools and business processes. For example, PROS integration with Microsoft SharePoint facilitates collaboration among sales teams and others across the organization, enabling sellers to stay abreast of activities and conversations with customers and other stakeholders through social techniques, seeking advice and collaborating within the context of their business. PROS and Microsoft are committed to helping companies everywhere leverage their existing Microsoft DIRA Framework to realize what pricing optimization can mean for their profitability. Through this cooperation, the PROS Pricing Solution Suite combines scientific, dynamic, and feature-rich pricing functionality with the power of Microsoft SQL Server 2012. The solution works seamlessly with Microsoft Office, Microsoft SharePoint Server, and other tools, such as Microsoft PowerPivot, to provide world-class pricing capabilities to customers in a familiar context. By deploying SQL Server 2012 Analysis Services in tabular mode, PROS customers can pull data from multiple sources and cache it in an in-memory columnstore index. The xVelocity engine, which also includes data compression algorithms, increases query speed and reduces or eliminates the need for prebuilt aggregate solutions. Using the integrated solution, businesses are able to make more informed, less risky pricing decisions with high user adoption and outstanding software cost/ performance ratios. RECURRING PROFITS With PROS software built on the Microsoft DIRA Framework, companies are able to gain higher profits year after year. Improved margin opportunities are embedded into a company’s systems, providing real, hard-dollar margin and revenue improvements. REDUCED RISKS Because PROS brings rigor and accountability to pricing, our software provides governance that minimizes AFTER AN EXHAUSTIVE REVIEW OF ADVANCED PRICING SOFTWARE VENDORS, IT BECAME VERY CLEAR TO US THAT PROS IS THE RIGHT PARTNER TO SUPPORT OUR PROFITABLE GROWTH INITIATIVES AND TO IMPROVE OPERATING EASE AND SPEED FOR OUR DEALER NETWORK. — JOEL LARSEN, DIRECTOR OF PRICING & STRATEGIC INITIATIVES, NAVISTAR PARTS TRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLDTRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLD PB5 the risk inherent in the complex pricing process. PROS provides a single source where every price point can be documented and supported. SMARTER PRICING DECISIONS The combination of PROS and the business intelligence capabilities of SQL Server provide critical information to drive better pricing decisions. Sales professionals gain key insights, such as what other customers are paying for products, what the products cost to manufacture, and what are acceptable—as well as ideal—profit margins, to give them greater confidence in selling. Through science-based pricing guidance, complemented by the simplicity and ease-of-use of Microsoft’s DIRA solutions, PROS empowers salespeople to close the best deals every time. HIGH USER ADOPTION RATES PROS relies on familiar Microsoft interfaces with built-in and custom web parts, which makes our solutions easy to use and manage. These web parts can be displayed based on the user role, so that users in specific groups or business functions see information that is relevant to them. Customers can continue to use familiar tools, such as Microsoft Office and Excel, and interact with PROS pricing capabilities, which are embedded into those tools. Outstanding cost/performance ratios In addition to reducing licensing costs, most PROS customers gain better performance while using existing server hardware. Based on the Microsoft DIRA Framework, PROS meets the needs of enterprise customers while reducing their total cost of ownership. SUMMARY High-performing businesses recognize pricing capabilities as one of the strongest profit-improvement levers. Placing the most advanced pricing information within reach of everyday users is a key way to realize the benefits from pricing capabilities. Using expertise from PROS and Microsoft, companies can focus on common tools as the critical enablers for realizing the full value of pricing systems for the entire company. Deeper integration between PROS pricing solutions and the Microsoft technology stack brings the power of advanced, science- based pricing to business users through Microsoft’s familiar and widely adopted productivity tools. It promotes an advanced, rich, and customizable workspace for the end user while providing enterprises the infrastructure to add additional capabilities and integration points as necessary for their businesses. Dynamic Business Networks Agile connected enterprise Secure, scalable, adaptable infrastucture Smart Connected Devices Smart device platform & management Connectivity & online services Intelligent systems Social Business Collaboration & knowledge sharing Find & access skills & expertise anywhere Digital customer engagement Role-based Productivity & Insights Broad Enterprise Information Access Timely insights for better decisions People, Process & Information integration DIRA Framework Natural User Experiences Simplicity & Ease-of-use Tailored modes of interaction Seamless device access Multi-enterprise business networks Connected customer-to- enterprise network TRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLDTRANSFORMING SERVICE PARTS MANUFACTURING IN A CONNECTED WORLD PB6 Sean Duclaux serves as PROS Service Parts Industry Marketing Manager, responsible for the development of the company’s go-to-market strategy, and positioning of its Service Parts pricing and revenue management product portfolio. Prior to joining PROS, Duclaux held leadership positions in enterprise software companies, including AspenTech, BMC Software and Empirix. Throughout his career, he has worked in diverse roles, from product management, marketing, program management, R&D and operations, where he developed a strategic vision to define market-focused solutions and executed go-to-market programs. Duclaux earned an MBA from the University of Houston; an MS in computer science from the University of New Orleans and a BS from Spring Hill College. Sean Duclaux PROS Holdings, Inc. (NYSE: PRO) is a big data software company that helps customers outperform in their markets by using big data to sell more effectively. We apply 27 years of data science experience to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. PROS offers big data solutions to optimize sales, pricing, quoting, rebates and revenue management across more than 30 industries. PROS has implemented more than 600 solutions in more than 55 countries. The PROS team comprises more than 700 professionals around the world. To learn more, visit www.pros.com. About PROS PROS.com Copyright © 2013, PROS Inc. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. 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