When building a Revenue Management system, you take the historical data, construct analytical models and the end result generates recommendations to enable organic revenue growth.
But what if an unexpected future event or piece of data comes along that your model is not equipped to compute? What’s an end user to do?
Often, the answer is, users build their own work-around. That is, they build capabilities into their Revenue Management system that allow them to override the outcomes. In some cases, the override can be meaningful and the fresh outcome becomes a different recommendation.
In limited instances, these overrides can be beneficial. For example, a recent event may have changed the market dynamics and it will take some time for the analytical models to adjust. In that case, business users are able to make temporary overrides to respond to such changes in the short term. However, when users don’t completely understand the system due to user interface training or poor communication, they tend to heavily override the output. Suddenly, no matter what results are generated, the end users override them – which means the Revenue Management system as it was built isn’t providing its intended value.
Managing overrides is essential so that they aren’t used unnecessarily. Yet there are ways to minimize overrides while driving organic revenue growth, and maximizing the system you’ve spent so much time and money on:
- Properly train end users. Train them well so they not only buy into the business / system logic, but are also educated enough to know when an override is necessary and when it’s not.
- Communicate overrides. An end user may use an override that’s perfectly reasonable in certain circumstances, while tracking of these overrides and their impact is critical. By tracking overrides, an end user can understand the history behind the overrides, which helps to provide answers behind the “why”. In addition, overrides are sometimes used to test rare boundary conditions of an innovative system. If those overrides are forgotten due to poor communication, a bad output can result.
- Fix the problem: Sometimes what is causing an errant output is a simple fix. Maybe it’s an error in a meta data table or the way data is being handled. If the problem isn’t correcting identified, an end user may make an override to correct for the error. Suddenly, a true problem within the system that could be repaired quickly turns into a permanent override that may only exacerbate the problem.
Overzealous overrides can threaten your company’s organic revenue growth potential. If your system is updated dynamically every day with fresh data and your models were built to react to that new data and generate updated recommendations – only to have those results pushed aside by user overrides – then you are limiting the benefits of your system’s dynamic structure.
A dynamic Revenue Management capability is one that provides you with reasonable, implementable recommendations, resulting in measurable growth. While overrides are sometimes necessary, their use should be limited, and always supported with a sound strategic reasoning.