Miloslav Kucmen has been working as a delivery and project manager for more than 20 years with an expertise in managing the implementation of SaaS solutions. He spent three of those years in the retail industry. Companies face a lot of challenges and risks during and after projects, where they need to maintain the implemented solutions or processes. We talked to him about the TOP 5 challenges related to implementing a new pricing solution: Priority of the project, Poor data quality, Misalignment between top management and project team, Scope creep and big investment. What are possible solutions to these 5 challenges?
1. Insufficient sponsorship from top management / Priority of the project
Often, we face the situation that project sponsors are from middle management, and they do not have enough power to obtain resources from other projects or decide autonomously. Usually, the sponsor is a Pricing Manager on the B-1 level or lower level of management. Sometimes sponsors are from TOP management, but they are so busy that their role is limited to only attending project steering committees, and real support for a PM is missing.
Project priority within the organization is always the problem. Pricing projects are usually included into the project portfolio with little to no priority. This is problematic because resources are shared and projects with higher priority (companies usually refer to them as “strategic” or “group” projects) cannibalize resources from pricing projects.
What’s the threat: The project will be delayed, and you will likely lose money in wasted resource time and missing or delayed expected benefits that can slowly accumulate into the thousands.
Possible solution: The Sponsor is the key person for each project as he should have enough power to make decisions without needing additional approvals from higher management. He also should have time to listen and support the PM in their role.
Consider the duties above before you nominate a sponsor for the project- that’s the only way to prevent a project from failing.
2. Poor data quality
All of us know that data is the basis for almost everything. Usually, companies are convinced that their data is clean and correct. Yes, at first glance it may seem that way, but clean and correct does not always mean that it’s consistent. For example, in the situation when a retailer doesn’t store data or flag promotions in transactions, you may see a “weird” trend of article pricing at that time. Retailers also store a lot of information in their database without error checking tools, which creates a mess for anyone trying to decipher the data.
What’s the threat: These reports can show positive financial results, but the reality is actually the opposite. As data is the basis for many kinds of analysis and reports, you can manage the company inaccurately, while using information based on incorrect data. Your company can make a poor prediction of their actual success and its outlook, which is important for a company’s strategy moving forward.
Possible solution: It is relatively easy at the start of implementation, often referred to as a “green field,” as you can design the architecture without restrictions from existing integrations or data models. So, spending more time before you start the implementation is the solution. If you choose to do it later, it could result in difficult changes such as database transformation etc. Choose a good supplier as they could support you to find a painless way and help you when challenges arise.
3. Misalignment between top management and project team members
TOP managers think that the implementation and especially data-related work is simple. You know, just write one select and data will appear, or the preparation of integration script is an easy hour long activity. But the reality is different and even if the task seems simple and short, it takes days to not only prepare it, but test and optimize it. Team members often don’t know the benefits and strategies of the company, and they are not aware of the importance of their contributions to pricing projects.
What’s the threat: The project will be delayed, and you will likely lose money due to wasted resource time because they didn’t do thorough work at the right time.
Possible solution: Don’t forget to prepare the project kick-off where all the info about the project should be presented. All project team members should attend that session to understand the benefits and the meaning of their work on the project, while also being aligned with company strategy.
4. Scope creep and poor risk management
These are a few of the most common sentences/reasons we hear: Define the scope now? We can agree on the scope during the project as it could easily change, and we don’t know anything about what needs to be done. The project is too small and short, so we can identify the whole scope anytime. Risks don’t exist, they are too small, they have very small probability, they are unidentifiable.
These are examples of many excuses for not defining the scope, and missing or poor risk management means unpredictable results of the project, delays, escalations, and disappointment as existing risks could be transformed to issues and in extreme cases could be a reason for a project’s cancellation. These are a few of the most common sentences/reasons we are hearing, but it is wrong!!
What’s the threat: The project will be canceled or significantly delayed, you will likely lose money and also the reputation of your project managers or project sponsor as the sponsor is accountable for the project’s success. Let’s do a simple calculation. Your project team consists of two IT specialists, one PM and one sponsor. Let’s take the average daily rate for all roles (7.000 CZK) and calculate the money which we can lose each day that the project is delayed. Don’t forget to include opportunity cost, not materialized benefits and also indirect costs into the calculation. Trust me, the results can turn out terribly.
Possible solution: Each project must have the scope defined before the start. It could be changed during the project lifecycle, but the only way to minimize scope creep is to have it defined in advance and then use standard change management when you cross that bridge.
Identify the risks before the project is started and then continue in risk identification and risk management periodically on a weekly basis. Listen to all project stakeholders to manage risks accurately. You will definitely be enabled in creating a trusting relationship and successful project implementation.
5. Big investment in hardware (HW) and software (SW)
Investment to HW and SW could end up being excessive, especially when a company decides to have everything installed on-premises.
What’s the threat: The investment in HW and HW maintenance, including license and installation fees is almost always a waste of resources. The rate that hardware ages and becomes obsolete means resources must be constantly increased to keep up. Software often needs expensive upgrades where you also end up having to pay the administrators for the work related to HW and SW maintenance.
Possible solution: Private cloud could be a better solution in some cases, but initial costs are still there. The best way to use pricing applications is to use SaaS (Software as a Service). Think about it…
The implementation of a Pricing Management solution usually takes months. We at Yieldigo are doing it at a much faster rate, usually within 2 months. How were we able to shorten that time? Main reasons:
- We are providing solutions as SaaS and have a lot of experience with solution scaling and optimizing.
- Our team has appropriate knowledge and experience, and we are getting better from project to project as we are learning from previous projects using lessons learned, retrospective and customer feedback to the implementation phase of the project.
- Our proven implementation plan with a focus on risk management which is getting more maturity continuously is a key
- Clients get support in their data preparation and decisions from the project start to move the project smoothly forward.
- Even though the project is going well, the project status is organized weekly as risks are always arising.
Book a demo of Yieldigo’s SaaS price optimization platform and find out for yourself why we can avoid those implementation challenges.