Client Overview

Industry: IT Managed Services, Cloud, Security, and Unified Communications

Business Size: $100M+ revenue with diversified offerings across public and private sector clients

Location: Australia, headquartered in Sydney

Client Context: NEXON is a fast-scaling technology solutions provider competing in a complex landscape of OEM licensing, managed services, cloud infrastructure, and recurring support contracts. While recurring revenue is strong, pricing capability has not kept pace with commercial complexity. Teams relied heavily on cost-plus structures and product manager discretion, lacking cohesive pricing logic, override controls, or formal value quantification frameworks.

Challenge / Problem

Symptoms Observed:

• Inconsistent pricing methodologies across service lines (e.g., UCaaS, Microsoft, managed services)
• Heavy reliance on OEM price sheets and informal margins on labour or support SLAs
• Lack of pricing governance across product, finance, and sales functions
• Discounting practices vary significantly by salesperson or division, with limited visibility or accountability

Strategic Impact:

• Margin leakage across bundled offers and renewals
• Inability to strategically price based on client size, risk profile, or solution complexity
• Limited ability to model profitability at contract, segment, or deal-type level

Executive Commentary:
“We’ve grown fast, but our pricing is still being managed like we’re a product reseller. We need to think more like a strategic service provider.”

Objectives of the Engagement

• Surface and quantify sources of gross margin leakage across the portfolio
• Move from ad hoc pricing to structured logic based on customer segment, product/service value, and delivery complexity
• Establish clear roles, workflows, and thresholds for pricing decisions
• Develop pricing capability across commercial functions—especially in product, finance, and pre-sales
• Equip leadership with data and tools to manage pricing strategically without slowing down growth

Our Approach

Phase 1: Pricing Capability Diagnostic

• Delivered 55-question diagnostic to pricing stakeholders across finance, sales, product, and operations
• Mapped responses against a pricing maturity model customised for hybrid tech/MSP businesses
• Conducted interviews to identify gaps between policy, practice, and execution

Phase 2: Margin Opportunity Assessment

• Analysed transaction and quote-level data to identify override patterns, margin outliers, and cost allocation blind spots
• Assessed internal pricing governance maturity, approval chains, and product margin variance

Phase 3: Quick Wins & Execution Planning

• Facilitated executive workshop to prioritise initiatives and define pricing ambition
• Developed roadmap for price architecture reset, quoting discipline, and sales enablement
• Created quick win toolkit tailored for managed services, SaaS bundles, and recurring contracts

Key Actions Taken

1. Service Bundle Margin Framework
   Created rules for margin target by bundle type (SaaS, IaaS, UCaaS, support)
2. Delegated Pricing Authority Model
   Defined thresholds and roles for deal discounting, especially at renewal and upgrade stages
3. Cost Allocation Review
   Identified gaps in true cost visibility for support labour, vendor rebates, and SLAs
4. Quote SOPs & Approval Tools
   Introduced structured quoting guide for pre-sales, with defined value communication points
5. Price Review Cadence
   Implemented quarterly price/margin reviews by segment and service line

Results Achieved (Within 8–12 Weeks)

1. Margin Improvement Opportunity
   $2.7M–$5.1M annualised EBIT opportunity identified across managed services and cloud bundles
2. Pricing Capability Baseline
   Scored at 58% pricing maturity, with roadmap in place to reach 80% in 9 months
3. Override Exposure Reduced
   New controls implemented to cut discretionary discounting frequency by 60%
4. Commercial Team Enablement
   Delivered pricing playbooks and value calculators to product and sales teams
5. Deal Profitability Visibility
   Built data model for margin tracking by customer tier, service type, and account size

Client Feedback

“We now have a clearer commercial lens on how our services create value—and what they should be worth. This diagnostic gave us a practical path to grow margin without slowing down deals.”
— GM, Transformation & Systems, NEXON Asia Pacific

What This Means for Similar Companies

Technology resellers and MSPs often face complex pricing challenges due to vendor dependencies, custom contracts, and mixed recurring revenue streams. The NEXON case proves that pricing isn't just about systems—it's about capability, governance, and strategic confidence in how value is delivered and priced.

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