You Know it is Strategic if the CEO is Repeatedly Mentioning it to Investors

October 20, 2009. Ray Elliot, newly appointed CEO of Boston Scientific on the company's quarterly earnings call:

“We have programs in place to improve our margins and this is an ongoing area of intense focus with respect to price management and mix utilizing a corporate wide pricing improvement project and our new sophisticated pricing tool, Rainmaker.”

“One of the things I commented on the script is we put a new system into play that’s been worked on here for a long time that allows us to have visibility and sophistication around pricing. Part of it is to not leak profit loss on the current policies you have and that you’re maximizing profitability. So that system which is called Rainmaker is allowing us to have some huge opportunities analytically to try and protect against that.”

January 12, 2010. Ray Elliot, CEO of Boston Scientific at JP Morgan’s Healthcare Conference:

Price sophistication: we have spent millions of dollars and it's starting to come to fruition now on a system called Rainmaker. It's custom built for us and it has tremendous capabilities in contract and pricing management, and really in optimizing price. The times where price is tougher this is particularly important.

You can view his presentation from their website. The quote above is in the context of his new strategy on slide 13.

It is gratifying to see the CEO of a customer refer to the joint solution as a critical foundation block to his new strategy. We have always believed that Revenue Management is strategic. It is a differentiator in today's market.

These days the product life cycles are getting shorter and shorter. Competitors can bridge the product innovation gaps very quickly. It is very difficult for public companies to continue to increase shareholder value predicated on innovation alone. At some point, you need to invest in processes and systems that allow you to protect and improve the returns from your existing product portfolio. All of us are used to usual excuse by faltering sales leadership – “If I have the next feature on the product roadmap, I can easily meet and exceed my quota." Probably. But, BSC is an example of company investing on both sides – innovative products and innovative systems to efficiently run their business. First, they invested in the transactional platform that automates their pricing and contracting processes. Now they have layered analytics on this transactional data that is enabling the “O-Suite” to stay on top of their revenues – daily.

Is it healthy that your CEO knows the details of what your team did yesterday – prices quoted, discounts given, contractual performance enforced - before you do?

Eventually, yes.

Short term - it requires a lifestyle change. Something akin to an eat better, exercise five times a week prescription. You need to align incentives for sales teams, partners, and customers with performance, consolidate transactional data and contractual commitments under one platform so that insight is available in-line with the sales or revenue realization process, and have visibility into opportunities across all geographies and lines of business, all helping towards taking a preventive approach to revenue and margin leakage. We even have support groups.

Learn first hand. Join us at RAINMAKER and see Boston Scientific share their journey to a healthier enterprise.