Your company was on the forefront of implementing a Revenue Management system. It was a strategic investment that you and the stakeholders of the organization made. However, five years have passed, and you hit a reflection point. Is the system still viable? The business has changed, and was the system able to keep up with those changes? Is there anything you could have done differently?
Companies who decide to build an RM system do it based on strategic business projections and transactional data. To evaluate the benefits of your RM system, you’ll need to determine if all your business projections still hold true months and years down the road. A rigorous benefit measurement will demonstrate whether initial perks are continuing.
A successful analytics capability requires taking a road map view of how your business operates within its industry and designing it with sustainability in mind. An initial revenue uplift is great for a given quarter, but a RM system must be designed with consistent revenue uplift in mind. A successful RM system will not replace employees with automation, but instead, it is the intersect between humans and technology where the system is responsible for freeing up time for big picture strategy and growth opportunities.
What does a technology driven RM system look like? Company Alpha implemented a RM system in 2012 with much fanfare and anticipation. This was their chance to leverage advanced analytics for the first time and they wanted to ensure they maximized revenue growth. However, before the system went live, it became apparent that they had over-fitted their models with business rules, which their employees had no intuitive or legacy understanding of why the rules were set in the first place.
Personnel found the models to be overreactive and akin to the “black box” models that are not one-size-fits-all as advertised. Within a couple of years, and poor adoption at the onset, Alpha was ready to scrap the system. They were in search of a better balance between the analytics that would optimally benefit their company and the mechanics that would make it usable which would ultimately be embraced by their employees.
What does a collaborative RM system look like? Company Beta built a RM capability that solved for their core business. This is foundational to both a successful implementation and adoption of a system.
Beta’s system took over day-to-day repetitive tasks and brought consistent analytics across a global organization. Employees transitioned to managing exceptions the system was too sparse to provide a recommendation with high confidence, and when something just required a judgment call.
Throughout a series of industry crises and short-term fads, this symbiosis enabled Beta to sail through turbulent times and continue strong growth.
Looking back on the above RM system examples, it’s often clear early on why they were or were not successful. Solutions cannot function properly without the synergy of both the people who know how to operate them while maximizing the technology efficiency and value. The human element coupled with technology will help your organization eliminate any of your unknowns and increase revenue without increasing risk.