In recent years, many organizations have embraced the Scaled Agile Framework (SAFe®) to streamline operations, enhance collaboration, and accelerate value delivery. However, a persistent challenge has emerged: the disconnect between the maturing value creation activities fostered by agile methodologies and the value capture mechanisms essential for successful go-to-market (GTM) strategies.
Traditionally, pricing strategies are weighed down by legacy practices that are often rigid and slow to adapt. These outdated methods fail to keep pace with dynamic market conditions and customer expectations, creating a misalignment that hampers sustainable profitability.
The root of this disconnect lies in a misalignment between strategy, product development, and the value exchange with customers. Upstream, strategic decisions and product development initiatives often operate in silos, with pricing and sales considerations coming into play too late in the process. Downstream processes can be cumbersome and resistant to the changes required by advanced pricing models, stifling the ability to implement dynamic pricing strategies.
This is where my professional world collided with that of Applied Frameworks. By integrating systems thinking into the profit streams™ concept, we connect to a more straightforward path to align value creation with value capture. Profit Streams focus not only on the activities that create value but also on those that capture it effectively. This holistic view ensures that pricing strategies are embedded into the entire product lifecycle, from conception to market delivery.
One of the challenges for companies that have adopted SAFe® is that it is often led by IT or software development teams. Business functions are typically last to join the fold because they see SAFe as a technical tactical development framework. However, Scaled Agile is expanding the value of SAFe to include business teams so that the packaging and pricing of software, which often supports hardware solutions, is seen as the next big goal to ensuring that the effective Agile ARTs and Teams are not only building in quality and meeting commitments to the business but are also building the correct set of features that the market needs and wants to pay for. This holistic approach uses sales, support, marketing, finance, and C-suite leadership to create new packaging and pricing options. This integrated effort can help organizations reach new markets, increasing revenue and profitability. By involving all business functions in the process, companies can ensure that their agile practices drive value creation and capture, leading to sustainable growth and competitive advantage.
I am thrilled to join the talented team at Applied Frameworks, led by CEO Jason Tanner and CINO Luke Hohmann. I can’t wait to help clients understand the intricacies of pricing their products and software-enabled solutions. Schedule time with me to learn more.
Additional information: Software Profit Streams, Customer Benefit Analysis, Snapshot Assessment, The Profit Stream Canvas.