The operational perspective of a pricing process : a case study investigating cause(s) and improvement measures for process flow inefficiency for an ICT Service company in Norway

Abstract

Purpose: This study focus on the pricing process for an ICT Service Company in Norway. The aim was to investigate how a pricing process should be organised to achieve process efficiency in an operational perspective. Three research questions were created to achieve this aim. (1) What characterises the current pricing process. (2) What are the cause(s) for process flow inefficiency? (3) What are the recommended improvement measures?

Methodology and Theoretical Framework: Research was conducted at one point in time, focused on an in-depth interpretation of non-numerical data. Main source for data were 15 process participants, collected through a semi-structured interview and analysed thematically. Following a flexible research design, there has been a continuous shift between data collected (empirical) and theory. The theoretical framework focused on the building blocks of pricing, the pricing factors.

Findings: The pricing process were found to be simplistic and having a little degree of standardisation. Including utilisation of highly experience-based knowledge ba- sis, a lack of guidelines, in addition to dependencies that determine how the pricing process were executed. Following, it was found that the complexity of sales opportunities processed were the main source for process inefficiency. Such as utilisation of resources being dependent on type of case, which resulted in clarifications, lack of basis for comparison and/or limited internal capacity. Additionally, utilisation of resources compensating for lack in appropriate framework, such as information basis and price objectives. Consequently, improvement measures found were a targeted improvement of factors in-line with pricing requirements and chosen pricing model. Starting with establishing price objectives and followed by determining short-term and long-term goals for re-organising the process. The study argues that pricing require continuous effort and prioritisation to sustain process flow efficiency.

Value Contribution: For practice, findings can inform managers on the link between pricing factors, causes for process flow inefficiency and improvement measures. Especially the importance of appropriate framework based on goals and chosen pric- ing model. Moreover, demonstrates a practical approach to how managers should prioritise improvement measures, when aiming to re-organise their current pricing process. For research, this study complements existing studies with a more operational and overall view on pricing. Including an in-depth view of how a pricing process can be executed. Additionally, proposed causes for inefficiency that should be further investigated trough qualitative and extensive research to determine the exact effect on operation of a pricing process.