Survey Highlights Pricing Exceptions And Demand Visibility As Top Concerns For High Tech Executives

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Recent Yankee Group survey of semiconductor and electronic components companies provides industry perspectives on issues with opportunity tracking, pricing, quoting, and channels price and inventory management

Pricing and Revenue Management Benchmark Study for Semiconductor and Electronic Component Manufacturing

Model N, Inc., the leader in revenue management solutions, is making available the results of a survey analysis completed by the Yankee Group that provides a comprehensive look at a broad range of issues related to the sales, pricing, quoting and channels price and inventory management processes of semiconductor and electronic components companies. The survey of 59 companies revealed significant areas of concern among the respondents and strong agreement on several of the top issues such as visibility into demand and the challenges of pricing exceptions. The survey highlighted that without a comprehensive approach to managing the revenue life cycle, revenue leakage caused by inconsistent pricing across channels and regions, internal bidding wars, non-compliance with contract commitments and inaccurate reconciliation of POS data can cost semiconductor and electronic component companies up to $30 million in margin erosion on every $1B in sales.

"The majority of respondents felt strongly that their companies needed improvements across the entire revenue life cycle from on-going analysis, price setting and policies, demand/opportunity tracking and quoting, contracts and channels incentives," said Sheryl Kingstone, Director of Yankee Group's Enterprise Research. "The survey also examined high technology companies that invested in price and revenue management capabilities. These companies clearly demonstrated leadership and advantages in increased quote closure rates, reductions in price erosion and improved regulatory and compliance reporting."

This first of its kind survey covered a broad range of critical business processes including price determination, price management and publishing, quoting, opportunity management, design registration and channels incentive management. When polled on their perceived top challenges for revenue and price management, the results were:

  •     62% frequent exceptions to standard pricing
  •     59% visibility and tracking design activity and opportunities
  •     57% timely response to customers and partners
  •     46% visibility into profitability at customer or transaction level

The survey also covered specific revenue and pricing issues in more detail, providing insight into the respondents' evaluation of the importance of the various issues, how well they felt their organizations managed those processes, and their top opportunities for improvement. Yankee Group prepared an analysis of the survey findings "Pricing and Revenue Management Benchmark Study for Semiconductor and Electronic Component Manufacturing". The analysis is available from the Yankee group or via the Model N website at http://www.modeln.com/HighTech/login.jsp.

"High Tech companies in semiconductor and electronic components are facing an increasingly complex demand chain, yet their IT investments in the sell-side have often been lagging investments in the buy side and supply chain," said Stephen Zocchi, General Manager of Model N High Tech. "This survey begins to provide a foundation for organizations to benchmark Revenue Management best practices and also highlights that companies can make a significant impact toward increasing deal conversion, gross margins and responsiveness to customers when they have made investments in improving process and systems."

About Model N High Tech Revenue Management

More than 30,000 users worldwide rely on the Azerity Revenue Management product suite from Model N to drive their pricing process for both direct and channel sales, making it the leading solution for the semiconductor and electronic component market. The solution includes a suite of applications which manage pricing and price list management processes, price quoting and ordering for both direct and channel sales, as well as channel revenue management related to price protection and inventory tracking. It includes unique features for high tech companies such as design registration, web-based interactive quoting for channel partners, and debit processing. The solution enables customers to standardize pricing, realize better deal conversion rates, improve transaction profitability, reduce revenue leakage, and derive better visibility to demand and revenue for both operational needs and financial reporting requirements such as revenue recognition and Sarbanes-Oxley.

About Model N

Model N is the leader in Revenue Management solutions, offering an integrated suite of applications for pricing, contracts, compliance, rebates, fees and chargebacks optimized for the industry practices of life sciences and high tech companies. Enabling the creation of a seamless, end-to-end process from pricing through settlements payment, Model N's uniquely integrated approach eliminates revenue leakage and delivers the visibility and controls needed to avoid the risks of non-compliance to government reporting regulations such as Sarbanes-Oxley and government pricing requirements. Customers include: Boston Scientific; Bristol-Myers Squibb; Cypress Semiconductor; Intersil Corporation; Linear Technology Corporation; Medtronic, Inc.; Microchip Technology, Inc.; Micron Technology Inc.; Ortho-Clinical Diagnostics, a Johnson & Johnson company; ON Semiconductor, Inc and Pfizer, Inc. Model N is located in Redwood Shores, California. For additional information visit http://www.modeln.com

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Megan Reilly
ModelN
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