Yankee Group identifies price management and profit optimization as the best-kept secrets with enterprises

Growing Enterprise Investments in PMPO Drive Year-over-Year Double-Digit Market Growth

BOSTON, MA, July 13, 2005 -- Yankee Group today revealed that 2006 will be the year for price management and profit optimization (PMPO) solutions. According to our recent report, Price Management and Profit Optimization Solutions Are the Best-Kept Secrets in Enterprise Software, market growth of PMPO solutions is expected to reach $1 billion by 2007. Today, enterprise budgets average up to $5 million for pricing solution deployments, indicating the growing breadth of PMPO initiatives. The majority of companies implementing these solutions are Fortune 1000 enterprises that have realized impressive ROI from profit improvements of up to 20%. No other packaged software in the market delivers the same type of top-line benefits while addressing bottom-line inefficiencies.

As the market gains momentum, a number of leading indicators signal the growing role that PMPO will play in top-level business strategies:

-- Pricing solutions are increasingly becoming enterprise-wide deployments, often large-scale global rollouts.

-- Leading systems integrators and consulting firms, such as Accenture, Deloitte and IBM Global Services, are building practices to facilitate PMPO strategy, process reengineering and technology implementation projects.

-- An increased number of educated and qualified RFPs signal a downstream pull for pricing solutions.

-- C-level executives are refocusing on revenue and margin growth rather than cost cutting.

Yankee Group found that enterprise investment in PMPO leads to 10% to 20% profit improvements at a rate unlike any other packaged software solutions on the market. In addition, enterprises experience a significantly improved margin contribution and revenue uplift, as well as better managed market volatility and supply balance. Many leading companies that already adopted PMPO solutions have either met ROI expectations or, in many cases, exceeded them.

"PMPO has been the best-kept secret of early enterprise adopters, many of whom are using these solutions to outmaneuver competitors and gain market share," said Kosin Huang, program manager at Yankee Group. "Many of these companies are hesitant to attest to the amazing ROI stories from their implementations, for the fear of losing a unique competitive advantage."

During the next 2 to 3 years, acceleration of comprehensive end-to-end pricing projects that span strategy, process and technology will establish PMPO software as a fundamental pillar of a complete price management initiative. Enterprises are beginning by rolling out a price optimization, price execution or price analysis solution; however, these deployments are self-funding and are building momentum for the adoption of the full suite of pricing capabilities, which includes all three modules.


At Yankee Group, we help our clients succeed by providing the knowledge, tools and support they need to make winning decisions when business opportunities intersect with technology solutions. In business more than 35 years, Yankee Group knows the importance of listening to and understanding the needs of our clients. We deliver value through authoritative, innovative and flexible research products and consulting services. Whether challenges are rooted in planning, executing or optimizing the use of technology, Yankee Group's world-renowned analysts transform market intelligence and practical, real-world experience into valuable decision support. Headquartered in Boston, Yankee Group research and sales staffs are located around the world, including North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific.

Elisa Roberts, 617-880-0214
marketing manager

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