Quote Creation

Value Estimator is presented as a Quote type, so to work with this tool, a new Quote of this specific type needs to be created.

To create a Value Estimator Quote:

1. Navigate to Quoting → Quotes in the application menu.

2. Open the ‘New Quote' menu and select ‘Value Estimator'.

Open

3. Enter the basic Quote information in the Header section.

Open

4. Products and their cost/price are set in the Items section. The selection can be made using a filter, text import or manually by selecting individual products.

5. Then you can either save the Quote or just reflect the changes of inputs (without saving) by clicking ‘Recalculate’.

Input

Business Models

First, select a business model:

• Services Model Impact – Seller provides a service, at a cost, to provide significant upside benefits to a customer. These two approaches affecting the value development in the output comparison charts are available:
  
  

   

  • Total Cost of Ownership – Cost oriented (the lower the target value is, the higher the benefit is).

  • Profit Growth – Profit oriented (the higher the target value is, the higher the benefit is).
    
    

• Direct Offering Comparison – Seller provides a higher value alternative to an offering of a similar price.

Value Drivers

Value Drivers are economically quantifiable elements (cost or profit) related to the product.

Values of each Value Driver can be either specified right away or defined by the Driver Attributes by specifying their values and a formula to calculate the final value of the Driver based on these Attributes.

The set of Value Drivers can be either loaded from a pre-set template or specified by a custom definition.

Drivers Class
Drivers can be defined either as absolute or relative values by the Drivers Class selection:

Value Drivers Definition
The following options are available:

1. Templates with a predefined set of Drivers (and their Attributes) are selected.
   
   

   
   The list of available templates can optionally (by configuration) be affected by these inputs:

   • Model

   • Drivers Class

2. Custom Drivers item is selected in the Value Drivers Template dropdown and then all the Drivers (and their Attributes) can be specified manually from scratch.
   
   

3. Drivers definitions loaded from any template can be manually changed by the Add/Delete action buttons.
   To enable Add/Delete action buttons, the ‘Change Template Drivers’ checkbox must be selected.

   This initial definition of Value Drivers applies to Our Solution as well as to all the other Solutions; the Value Drivers values for Our Solution are specified below.
   
   

4. Drivers loaded from a template and then changed can be reset to their original state.

   Changes will be detected whenever there is any adding/removing/renaming action on the drivers/driver attributes or when the drivers attribute formula is updated.

   The ‘Reset Template Drivers check box is shown if there are any changes detected and 'Change Template Drivers’ not selected.

   Whenever ‘Reset Template Drivers’ is checked, the template is reset to the original state (then ‘Reset Template Drivers’ disappears).

    

Value Driver names and types
Driver names and Driver types (cost/profit) are defined (manually or given by a template).

Value Driver values definition
These options are available:

1. Definition by specifying the value right away.

   1. Definition by the Driver Attributes values and by the formula to calculate the result value from these.
      The Driver Attributes can be set by clicking the Define Our Solution Drivers Attributes.
      
      

       

      Particular Attributes are referred to by their Variable Name in the formula.
      The formula can combine both variables and number values (e.g. a*b*5+1000).
      
      

Value Drivers Order

1. By default, the Value Drivers both in the list of Value Drivers and the comparison charts are ordered by their added value (drivers difference) descended and grouped by the Driver Type and by the Templates (the Templates are then ordered by the summary of added values per Driver Type within one Template).

   The order can be also specified manually:
   
   

   In case the Specify The Order of Drivers checkbox is checked, then by default the drivers and templates are ordered by values defined in the configurations. These can be manually adjusted.

Solutions Definition

1. The list of considered Solutions  (e.g. Current Solution, Competitor A, Competitor B,...) is defined together with its Solution compared to the Selected Solution (mandatory). At least one Solution needs to be defined.

2. Values for the previously defined Drivers (and their Attributes) are defined for these Solutions as well. The set of the Drivers/Attributes is the same as set above.

3. From the list of Solutions, one of them is selected to represent the entity which Our Solution is compared to.

4. If there are more Solutions defined, the best-fitting one (based on the Value For Customer comparison) can be selected as a basis for comparison with Our Solution.
   This is done by checking the Next Best Alternative For Selected Solution:

    

The option to add more Solutions and to specify their Value Drivers is applicable only for the Direct Offerring Comparison model. For the Services model only the Current Solution and its price is used.

Our Solution Price

Our Solution Price can be set in the Items section of the Quote by selecting a product and specifying its Requested Price. More products can be added here, then the final Our Solution Price is the summary of these.

Our Solution Price is applicable only for the Direct Offering Comparison model.

The Our Solution Price needs to be specified only in case the Direct Offering Comparison model is used. For the Services Model the Our Solution price is not relevant.

Pricing Strategy

This functionality is applicable only for the Direct Offering Comparison model.

Our Solution Price can be modified by Pricing Strategy:

By the definition of the input value, this % value is taken from the Value For Customer and added to the Our Solution price. This way Proposed Price item is created.

Proposed Price = Value For Customer * Pricing Strategy + Our Solution Price

For example:

Proposed Price = 750 * 0.4 + 500

Proposed Price is presented at the end of the Comparison Chart.

By checking the Consider Proposed Price checkbox Our Solution Price value is substituted by Our Proposed Price value:

Output

Calculations

Drivers Added Value

The difference between the Selected Solution Driver value and Our Solution Driver value.

Driver Added Value = (particular Solution Driver value - Selected Solution Driver Value) * Driver Type coefficient

Driver Type Coefficient value is based on the Driver Type:

• cost: -1

• profit: 1

Sample values:

Solution Value

Solution Value represents the total economic value of the particular Solution compared to Selected Solution.

Solution Value = Selected Solution Price + summary of Driver Added Values

Value For Customer

Direct Offering Comparison

Value For Customer = Solution Value - particular Solution Price (e.g. Solution Value - Our Solution Price, Solution Value - Competitor ABC Price etc.)

Services Model

Value For Customer = summary of Our Solution Drivers.

Next Best Alternative For Selected Solution

• Solutions are sorted in the descending order by Value For Customer.

• Selected Solution and Our Solution are excluded from the list.

• The first Solution is set as the Next Best Alternative For Selected Solution.

Applicable for the Direct Offering Comparison use case model only.

Comparison Chart

The Value Drivers displayed in the chart are ordered either by a default setting or manually / by a Template configuration.

For more details see the Value Drivers Order chapter above.

If the scaling option is set, the chart is scaled by moving the Y-axis base value (starting point, typically 0) upwards to a calculated value.

Scaling conditions:

• Services Model: Current Status > (Total Added Value x 2)

• Direct Offering Comparison Model: selected Solution Price > (Total Added Value x 2)

Scaling result:
The waterfall Y-axis base value is the result of this calculation:

• Services Model: Current Status - (Total Added Value x 2)

• Direct Offering Comparison Model: selected Solution Price > (Total Added Value x 2)
  
  

Direct Offering Comparison

The particular Value Drivers are presented by the driver added values.

Services Model

Price Savings and Value Overview

Price Savings for all the listed Solutions and Value Overview for Our Solution compared to the Selected Solution.

Calculation Results