As organizations grow and mature, it’s only natural for their departments to do the same. At times those departments march in unison, at other times they don’t – particularly when it comes to analytics. When they don’t, the ramification can impact the bottom line. Companies that fail to put Revenue Management at the center of their universe WILL suffer greatly as a result.
What often happens is that pockets of an organization manage data differently and communicate different versions of the “truth.” Or they develop competing models that produce conflicting answers, which at its worst can result in the organization taking competing and costly actions.
Integrated thinking should be a component of any organization. For example, you wouldn’t change a key component of a product or brand without first considering the broader impact it will have on operations, manufacturing, pricing, or marketing. Therefore, the same thought process should be applied for your analytical capabilities, with the core components of Revenue Management such as segmentation and demand forecasting as the nucleus. To embark on this journey, here’s how to get started:
Strategic Vision: Craft a high-level vision for Integrated Revenue Management by creating a cross-functional group that understands the key decisions made today across the organization, as well as the information required to make decisions and how those decisions impact other departments. If done correctly, this process will secure organizational consensus for taking the next step.
Roadmap: Translate the vision into key capabilities along dimensions of organization, data, analytical solution, and business processes. It’s essential to demonstrate the value of new capabilities to estimate the goal and feasibility of success with current data, systems, applications, and organizational processes. Prioritize efforts strategically over time to ensure each phase delivers value and no single area of the organization is overwhelmed or overlooked.
Capability Development: Design and build new capabilities with the end product in mind. If you are building an enterprise demand forecasting capability that will be an input for multiple capabilities such as price optimization or media mix optimization, design with these future interactions in mind.
Organization & Governance: Create a cross-functional group of stakeholders that is accountable for executing the vision under the leadership of an executive-level sponsor. Establish clear roles, accountabilities and a cadence for reporting on progress.
Following these steps will lead you to your destination of Integrated Revenue Management. In addition, it will systematically drive cross-functional collaboration and decision-making that will maximize revenue and unlock enormous competitive advantage for your organization.