Ah - Blog Time Again!

Just what is a Blog? According to Wikipedia, it is “a discussion or informational site published on the World Wide Web and consisting of discrete entries ("posts") typically displayed in reverse chronological order”. It goes a little deeper in a subsequent paragraph to indicate “Many blogs provide commentary on a particular subject; others function as more personal online diaries; others function more as online brand advertising of a particular individual or company.” Since this is the Revenue Technology Services blog, this obviously fits quite nicely into the description of online brand advertising. However, the pertinent section here to my mind would be “commentary on a particular subject”.

Internally, we are all tasked on a rota system to come up with these blogs. After a few rounds, you would think that inspiration for new topics or ideas would be lacking. Yet it is surprising how this inspiration can typically come from nowhere. Personal blogs tend to range from the informative to the wild rant, but corporate blogs tend to focus more on the business itself. So as not to be too repetitive, when the baton is passed to me, I cast my eye back over previous blogs on our site. When doing so today, what I noticed was this: we have articles covering various aspects of our product line and functionality; we have articles discussing trends in technology; most importantly, we have a number of articles regarding our people.

In the many years I have been with RTS, our buzzline, catchphrase if you will, has always been “People, Processes, Technology”, and that is exactly the information we have been communicating. And communicating is the key. Through the entire implementation cycle, and into our ongoing client support activity, we stress communication.

•         During initial project planning, communication is key to ensuring both we and the client are on the same page regarding expectations as to which people are assigned, what processes will be adjusted, and what technology will be implemented or affected.
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•        During implementation, communications become even more crucial. Among project team members, it keeps all appraised of the status, progress and potential hurdles. As part of change management, good, continuous communication from the outset keeps all stakeholders aligned regarding how the business will adjust to the new functionality.
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•          During education sessions we stress the importance of communications, and that the RM team cannot effectively operate in a vacuum. Methods of information sharing are identified, and suggestions made for keeping all aware of what is going on within RM.
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•          After go-live, we pride ourselves on maintaining communications with clients, allowing us to garner feedback, understand their business and changes for which we may be able to offer advice.
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•          Our annual user summits allow for further, interactive communication between ourselves and clients, but additionally between clients, and prove very beneficial.

Even the rare negative feedback is still positive communication, as it helps us improve our People, Processes or Technology.

And there we close the loop. A blog is communication in a short(ish) chunk. It allows us to communicate with you, the audience, on a regular basis, giving an insight into who we are and how we think. So, how about “communicating” with us, to let us have your thoughts and feedback on this or any of our other blogs, and make this a truly 360 degree experience.

Jason Codd

VP Services

What exactly is in it for me? - Measuring the Value of a Revenue Management System

Every consumer wants to be reassured that their purchase is performing to the best of it’s ability and they are doing everything possible to maximize the utility of their investment.  Revenue Management departments at transportation companies globally are no exception to this. Though it is widely accepted in the airline and cruise ferry world that a Revenue Management System (RMS) can boost the top line, the challenge frequently encountered is in determining how significant these revenue benefits are.  So while the why and how Revenue Management can positively affect a company are taken for granted, by how much is a question that every Revenue Management manager spends many a sleepless night contemplating.   

Obviously, during the procurement process, an airline or cruise ferry will have to make the purchase based on empirical evidence and results reported by earlier adherent of RMS in order to justify their investment.  However each company has it’s own distinct operational and strategic objectives that impact revenue and so empirical results at other companies are understandably received with a bit of skepticism.  However, once an RMS has been deployed, companies have the opportunity to measure the value the system is providing. Savvy algorithms that strive to provide an indication of how much revenue opportunity has been realized through automation and optimization sciences are present in a number of sophisticated RM systems.  These models typically tend to simulate two scenarios – one with no or completely inoptimal revenue management – this reflects the worst case scenario. The second scenario is diametrically opposite to the first and is best case scenario that assumes that optimal revenue management principles have been employed. These models are typically run after the departure on historical data so the revenue minimization and maximization algorithms can be applied with the benefit of hindsight.  The third component used in these models is the easiest to compute as it is based on the actual observed results.  Using these statistics, supervisors get invaluable insight into the available revenue opportunity, the amount realized, and that unrealized due to various reasons including spoilage, dilution and overbooking.  Identifying and analyzing poorly performing departures along with associated causes can greatly help guide informed decisions on future departures as there exists the opportunity to learn from missteps of the past.

However, a word of caution is very much in order regarding these approaches to determine revenue performance.  As with any system, and especially in the case of a data intensive discipline like Revenue Management, the quality of the results is heavily dependent on the robustness and reliability of the input data. As the saying goes, Garbage in, Garbage out. So a great deal of care should be taken to ensure that the inputs are accurate and outliers are detected and ignored.  Supervisors should also be cognizant of some of the assumptions that these models make which may not totally reflect reality and also be wary that system recommendations may not be taking into account external factors that are invisible to the system. However, it is still possible to glean valuable inferences through intelligent analysis of the figures. It is also extremely important that the RM departments realize that the value of these exercises lies in learning from historical performance and any attempt to engage in a blame game where analysts are being targeted as reasons for less than satisfactory revenue performance in the past is not only unfair but obviously can be counter- productive.

How does your company quantify revenue benefits? Please share your experiences and thoughts with us.  If you require more insight into this process, please don’t hesitate to reach out to me at Pradeep.bandla@rtscorp.com. 

Pradeep Bandla

VP, Product Management and Marketing

Turn your customers into partners...

Partnership is one big mantra that I have learned over the years. It works everywhere.  It works at home. It works with my colleagues. And, of course it does magic with every customer I have worked together so far.  While developing and maintaining a partnership with customers is essential in every business, I find it to be lot more important and imperative when you provide innovative solutions, especially which involve analytical and scientific models. Practitioners and veterans in the industry oftentimes dismiss innovative solutions citing their longevity in terms of experience and expertise in that area of business and providing reasons such as lack of good data, uniqueness, and customer acceptance.  I have personally encountered these challenges when I first started working with experienced airline operations guys who have managed cargo capacities of flights for years.  Similar experience when I first worked with freight railroad operations planning folks who have worked on improving train performances. In both instances, developing partnerships at various levels tremendously helped me in gaining acceptance while successfully delivering innovative solutions.

Developing partnership with customers starts right from the time you make the first contact with the customer about how you can help the customer do things better and cheaper. It is about understanding their challenges and offering solutions that are mutually acceptable.  It is about being upfront and honest about what your capabilities are and only make the promises you can keep, be it functionality and quality of the solution, skill of the resources, time to implement, or after sales support.  It is a shared journey with compromises and tradeoffs to create a future for both you and your customer. It is about:  listening to your customers; involving them in your vision, strategy, and plans and maintaining ongoing communications on these items helps to forge it further; addressing and solving their problems completely; and developing personal relationships at all levels.

Creating a partnership with your customers has several benefits. We at RTS have seen it work and have experienced the benefits. Partnership creates a sense of ownership and accountability and turns naysayers into stakeholders by creating a common goal. Clearly, it helps to retain customers and get continued business from customers.  It helps to gain competitive advantage and drive growth. Your customers become your best advocates.  It assists in anticipating what the customer needs before even the customer knows it.  The end result is increased financial performance, enhanced customer satisfaction, and greater brand equity.

What does partnership mean to you? How do you execute it? Please share your experiences and thoughts with us.

Raja Kasilingam