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March 11, 2021

Pricing Excellence With ORMB

Pricing is an important business function which is the key driver in maximization of profit and satisfaction of customer. It guides the organization in setting the cost of produce or the service to the consumers.  While deciding on the Optimal pricing one must consider several internal and external factors such as revenue goals, competitor pricing, consumer, Market demand etc.

Traditionally pricing strategies involves a mixture of Cost plus, fixed cost or value-based pricing. But with the emerging business model and the changing dynamic of business, companies are adopting more incentive pricing strategies to encourage business partners, customer, and market participants to create and maximize the value of entire ecosystem. To unlock the growth with digitization and increase the customer reach, platform powered business such as Cards payment, e-commerce, Cross border payment etc. adopt the most aggressive pricing models such as Incentive Matrix, customer loyalty and Credit point discount pricing requiring business to rapidly change the pricing decisions.

To spearhead the above business objectives, the availability of sophisticated pricing platform plays a vital role. The Modern pricing infrastructure should not only automate the Revenue management lifecycle but also provide the ability to untapped revenue potential, restrict revenue leakage and support business agility. It should provide the flexibility to adjust the price level tactfully and dynamically by simulating, analyzing, and making real time decisions which can unlock the growth potential. However, companies face multiple challenges such as fragmented, home-grown application, manual spread sheet-based pricing, storing data in soiled with respect to transactions, consumer setup, pricing application requiring IT departments to create custom interfaces to support core process. This acts as a hurdle in making the quick and informed decision considering the Margins and the customer relationship.

Oracle Revenue Management and Billing (ORMB) provide a comprehensive platform which supports the revenue management lifespan activities such as Customer Creation, Product/Services setup and its Pricing, transactions settlement through robust TFM engine, Billing, Payment and managing customer balances. It enables pricing and billing across customer hierarchies, customer type, product offering, business function etc. and acts as the single source of truth for all different pricing models replacing spreadsheet, legacy, and antiquated system. It provides a single platform supporting settlement of any or combinations of products/services such as one-time charges, subscription, consumption, hybrid, or dynamic product bundles transactions.

ORMB Price Management capabilities

  • Efficient and Next generation approach for pricing solution.
  • Easy and faster adoption to Customer centric, competitive pricing, and business agility.
  • Ability to create powerful algorithm to support the divergent need of business.
  • Sophisticated platform integrating price setting, price optimization, price management, market, and customer data
  • Ensure strict adherence to Price Control with Multi-level approval workflow.
  • Improve efficiency with mass update of Pricing without any human intervention
  • Price simulation based on industry specific KPI to access the impact of Pricing decisions.
  • Ability to configure pricing frequency, Proration method and pricing currency.
  • Item groping and pricing as the bundle
  • Distinguish pricing based on customer, product, transaction, or Pricing attributes with ability to Override pricing at any level.
  • Use standard and personalized pricing metric to construct ideal Deal. 

The pricing framework in ORMB can be used to support multiple business function of an organization. It can be tailored to leverage existing enterprise solution to establish and automate the ancillary activities which require separate system/application. This provide an add on benefit saving large scale investment in IT. Following diagram list some of the business process which can be automated using ORMB robust TFM and Pricing functionality.

Ancillary.PNG

Ancillary_Table.PNG

The pricing in ORMB is completely driven through configurable and rules-based approach. It allows users to define pricing at multiple level with the option to override based on more relevant aspect i.e. Account, Hierarchy, Relationship etc.  It follows a simple and easy 4 R's stage (Rate schedule, Rate version, Rate component and the Actual rates) to complete the entire step.

ORMB is the "One stop solution" built to provide a single platform catering to varied pricing strategies/Model across the industries. For effective pricing, the key decision point is the pricing levers which create the logical pricing strategies. ORMB support multiple levers combined with powerful and complex Out of the box and custom algorithm to support the advice business requirement.

Following are some of the illustration pricing models with the Price levers ORMB support for Platform and Non-Platform business. 

Industry

Product

Pricing Levers

Cross Border Payments

Principal, Charges, Taxes

Pass-through

FX Revenue

Exchange Rate Risk category

Agent Commission

Pick a Tier with flat Rate

Pick a Tier with Hybrid pricing

Dynamic Pricing based on performance

Hybrid Commission

Flat Commission

Referral Commission

Cards and Payment

Merchant discount Rate

Interchange Fee

Card Assessment Fee

Processing Fee

Tier Pricing based on Risk category

Flat Rate - Blended

Membership pricing

Bundled Pricing

Free limit

Reseller Commission

Recurring Charges

PCI Compliant, Statement, Gateway

Healthcare

Premium Calculation - Fully Insured Plan

Age Based Pricing

Tier based pricing

Pass-Through Billable Charge

Self-Funded Plan - Claim

Claim

Aggregate Stop-Loss

Specific Stop-Loss

Admin Fees

Retention Type Claim Based

Charges

Re-pricing

Banking

ATM Withdrawal

Step Tiered & Threshold Tier Pricing

Cheque handling

Flat Rate

 

 

Interest based on Monthly Balances

Two-Dimensional Pricing

Tariff plan (Bundle Pricing)

Deal Pricing

E-Commerce

Product

Bundle Pricing

Flat rate

Tier pricing

Performance pricing

























Conclusion

The emerging business solution is creating the new markets and business models requiring new pricing strategies. For companies which are ready to discard manual/adhoc pricing and implement a disciplined and consistent pricing with ability to perform real time analytics and decision making, ORMB is an ideal platform which emphasis on identifying opportunities and driving better pricing decision.

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