IBM, Armonk, New York: COPRA for S&S (COgnitive PRicing Analytics for Subscription and Support) Solution

Written answers to the questions

The original COPRA solution was introduced in 2019, but the latest version of the solution that supports sales insights for the Software Subscription and Support came to life in the second quarter of 2022.

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When clients purchase IBM software, the license comes with one year of Subscription and Support (S&S) services included in the original sale and entitles the client, among other things, to upgrades and certain kinds of support. S&S services can be renewed by a client annually.  [REDACTED FOR PUBLICATION]

IBM’s COPRA (COgnitive PRicing Analytics) team developed and deployed a worldwide analytical solution to automate S&S renewal pricing.   The solution incorporates client information (e.g., client’s industry, historical quoting records, win/loss status at each point in the client journey), product information (e.g., product performance trends, relevant market trends), transaction specific information (e.g., size, full / partial renewal, prior renewal prices).  Client’s experience with the product (e.g., number/frequency of downloads, support tickets) is considered too.  The solution also incorporates macro-economic features (e.g., Consumer Price Index) from officially maintained external public resources.  In fact, the inclusion of these features helped improve solution’s Precision-Recall Score by more than ×1.5.  All of these data, including the macro-economic variables, are used across the entirety of worldwide operations with region and country specificity – e.g., currently CPI in US is substantially different from that in Saudi Arabia and the model is providing an actionable differentiation based on this. Data is refreshed quarterly to capture the latest trends.

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IBM sellers and pricers (price approvers) experience two significant pain points in the quoting stage of Software Subscription & Support (S&S) Renewal: time pressure and limited information.  The solution substantially improves sales performance by recommending a price to achieve optimal seller-client outcome while simultaneously automating a significant part of the internal-to-IBM process.

With COPRA S&S solution, S&S sellers are armed with optimal renewal price so that they can close deals efficiently and confidently and seek manual approval much less often.  Correspondingly, pricing approvers receive considerably fewer requests from sellers and can focus on higher value-add activities.  [REDACTED FOR PUBLICATION]

It is important to contrast COPRA S&S solution with industry standard / default, which often is a fixed year-over-year percentage price increase and rigid terms, both contributing to alienating clients:

1. IBM allows greater flexibility in terms and timing of the renewal, and the above-described solution allows to do it as efficiently as more rigid approaches.
2. Our solution (in difference with rigid solutions used by others), considers the overall relationship of the client with IBM and in doing so optimizes LTV/CAQ.
3. As many experienced in 2022, the inflation plays a role in client behavior.  Our solution incorporated granular view of inflation across the world, current and historical, which allowed a 50% improvement understanding of client behavior.
4. Last, but not least, the above-described solution instruments a direct alignment to company strategy, something that others in the IT market strive to achieve primarily through the human element of the management system.

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