About the delivery
ProsessPilotene delivered Marginer for Corvus Energy AS (2023).
Price margins and a price corridor have been delivered for the quote and quotedetail tables. A particular consideration for the delivery of this solution to Corvus Energy is that product costs may vary from quarter to quarter going forward. Therefore, the margins on quotes and quote lines will depend on a date being selected so that the correct cost can be applied.
Solved using a separate cost table linked to the product. The costs in this table are based on a cost field on the product and can be overridden for each cost row.
Together with a margin table (to serve as default margins), the cost rows are used to create "Price List Element" rows for various price lists, with one price list per quarter.
A solution has been developed that covers both gross and net margins. The gross margin is the margin on the products sold, while the net margin is calculated by deducting internal costs stored in a separate, related table called "Project Costs".
Value creation
Corvus Energy has faced an issue where many products have been sold at a loss. This is largely because the sales they make are for delivery far into the future, while product costs have changed in the meantime.
Time-adjusting the product cost allows salespeople to sell products at the desired margin for a future date.
By displaying margins for individual lines and the total, it will be easier for salespeople to ensure that products are sold at profitable prices.
This also allows salespeople to be more flexible with discounts for different line items and offer large discounts on individual line items (and communicate these to their customers), as long as the overall sale has a sufficiently good margin.
The solutions
- Margins
Margins: The product catalog plays a central role in the sales module. It is referenced in standard tables such as order lines and similar tables, and is also used together with membership tables for subscription products and the like.
By default, order lines are added together, and the order is assigned a total based on quantities, unit prices, and any discounts.
Products do not necessarily have a fixed selling price; instead, the price may vary from one agreement to another, depending on the seller and the customer. In an organization with many salespeople and many such "flexibly" priced products, it can be difficult to determine the point at which a product is no longer profitable to sell.
One solution is to make the margin on products sold visible. This requires the seller to know the cost of the product.
Margins can be displayed both per line, for example order lines, and as a total margin for the order containing the aforementioned lines. This can be presented either numerically or in a "traffic light" format, with color coding based on the size of the margin (price corridor).
Area and keywords
Sales
Products, Price, Margin, Price Corridor
Limitations
For many products, it is essential to have the best possible data on future costs. The cost for the current quarter/period is known, while for future periods, someone must enter the expected cost to the best of their ability (it could also be adjusted using fixed calculation rules).
The calculations are performed asynchronously through the API, and the salespeople find that they take a long time. Having to refresh the page to get the correct values does not provide an ideal user experience.
The margins require a cost to be associated with the products being sold. If this cost is not up to date, the calculated margins will inevitably be incorrect.
Calculations performed per line can typically be handled with a synchronous plugin. For the total, it may be better to use an API or similar. In that case, the user will need to refresh the page to see updated values.