Real-Time Revenue Management

One of the things that we have been hearing a lot about lately is the ability for real-time optimization of a single departure or a group of departures.  This has many benefits for those departures that tend to get a significant number of bookings in the last few hours prior to departure – especially in the cargo and passenger rail industries.  The objectives of real-time revenue management are two-fold:

n  React with minimal latency to dynamically changing market conditions.

n  Especially useful when significant booking activity/schedule changes occur during the day and carriers cannot afford to wait for nightly file updates and processing

RTS is currently reviewing many options on how best to approach real-time revenue management.  One approach is:

n  The inventory control system senses change in booking activity and sends alerts to the revenue management application based on user defined thresholds, i.e., cancellations, bookings greater than projected demand, etc.

n  The revenue management application gets the latest booking, cancellation, schedule change data in real time from the central reservations system (inventory refresh) and automatically optimizes these departures and sends updated allocation levels back to the reservation system.

n  Two-way real time interface between the central reservation system and the revenue management application would need to be developed to facilitate dynamic data exchange between the systems.

The pros to implementing real-time revenue management consist of:

n  Boosts the bottom line by making optimal decisions based on real time information minimizing lost revenue opportunities.

n  Improves analyst productivity by reducing rework on a number of stale or invalid controls.

n  Automatically identifies departures that need to be re-optimized and eliminates the need for the analyst to continuously monitor changes in market conditions.

The downside of implementing the above is:

n  May not be worth the investment if market behavior is relatively stable and predictable

n  If thresholds are not defined accurately, it may lead to uncontrollable number of alerts being sent from the Central Reservation System to the revenue management application impacting performance.

We believe that the ultimate approach would be a combination of nightly processing and the ability for the system to send alerts so that the analyst can actively review those departures that are falling outside of the user defined threshold parameters.

RTS values your input and thoughts and the enhancements to our products.  Leave a comment and let us know your thoughts.

From all of us at RTS we want to wish you a very Merry Christmas and a Joyous New Year. 

Robert L. Harris, Jr.

Senior Solutions Consultant

Hyperloop

It is the latest buzzword in the travel and transportation industry where passengers can travel between 2 major cities which are less than 1000 miles apart within 30 minutes, at a speed close to 800 mph. Another one of Elon Musk’s newest inventions and an extremely powerful, practical one which has become a jaw dropper in the Travel and Transportation industry.  Existing conventional modes of transportation of people consists of four unique types: rail, road, water, and air. These modes of transport tend to be either relatively slow (i.e., road and water), expensive (i.e., air), or a combination of relatively slow and expensive (i.e., rail). Hyperloop is a new mode of transport that seeks to change this paradigm by being both fast and inexpensive for people and goods. A mode of transport that is a cross between the concorde, a rail gun and an air hockey table.

When it will become a reality is yet to be seen, but for now the authors are calling this an “Open Source Project”. It has an open design concept just like Linux did decades ago and is now a reality. The first version of this design involves passenger and the second will be passenger and vehicle.

In lines with the Hyperloop, a more comprehensive project is the Aqua=Terra T.W.I.N.S. (Trans-Web Infrastructure Network System) projects (aquaterraplanetaryholdings.us and invention.net/aquaterra) that not only provide for an advanced transportation system, it also includes a complete self-sustaining format that links, via sub-surface Tubes, land (Terra) and sea (Aqua) Stations to form an international / single-standard web system.

 We at RTS, love to research and analyze any new trends that will help companies in this space integrate profit optimization and revenue management into their existing business processes and systems. Since we work with both Passenger and Cargo, it is very exciting to learn about the specs that the Hyperloop has presented to enable them to make use of our wide product range.

The Hyperloop concept is the first of its kind to ever to be created and there is no doubt that above a very sophisticated software system/s that handle the data, visuals, reservation, financial, reporting, there is an important layer of software which is a profit enhancement system that will that make sure there is benefit and optimized use of the seats/cargo space within the Hyperloop.

Some questions that will linger on for now on our minds - What is the capacity? If it cannot meet the demand will the prices go up? Is there is a long wait time to use the Hyperloop pods, will people find themselves having to take an alternate mode of transport?

The move toward higher speed, better service, cheaper travel, and something less environmentally polluting, is going to happen — it's the wave of the future.

Deeshi Gandhi

Technical Manager

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

The Road Warrior and a Healthy Lifestyle

Meet Mr. Joe Travelalot. He is a road warrior. Works for a company in the Travel Transportation domain. Mr. Travelalot’s job takes him places far and wide. Sometimes within the domestic US and sometimes to destinations as exotic as Malta, Cape Town, Argentina.  The benefits of travelling to such places is not lost to Joe. It is one of the best parts about his job. However, along with the benefits of seeing new places, come the challenges of maintaining a healthy lifestyle while away from home turf.

In the past few years, there has been an increase in the importance of exercise and nutrition. Due to the rising percentage of chronic diseases such as diabetes, heart attack to name a couple, people all over the world are making an effort to gear towards working out on a regular basis and home cooked meals or raw fruits and vegetables. The significance of a well-conditioned lifestyle is not lost to a constant traveler.

The road warrior, more than most people, has to discipline himself even in Argentina (or wherever his work takes him) to find a way to mirror at least to some extent his exercise and food habits. So what are some of the effective exercises that one can implement on the go? And what can one eat so that the waistline stays intact (pun intended!)

Here are two exercises that are simple but 10-15 minutes of these are sure to pack a punch. The quintessential push-up.  This is a very effective exercise that works the upper body and the abs like no other. The form is simple. Space required very little. Best part, can be done anywhere, anytime. If you are in great shape, try a burpee. I specially love this exercise for the challenge it poses even in its simple design. It works the entire body and gets a sweat going within the first few reps.

Steps to do a Burpee: 1) Keep feet shoulder-width apart. Now, lower body into a squatting position, placing hands on the floor in front of you. 2) Kick your feet back so that you are in push-up position. Keep your hands firmly on the ground to support your body. 3) Lower your chest to do a push-up. Bring your chest back up.  4) Kick your feet back to their original position. Stand up, and then jump into the air while clapping your arms overhead. 5) Repeat.

Chew on this: Regardless of your exercise routine at home or away, it’s what you eat that makes or breaks the deal. Aim for the less processed foods on the menu when with a client for dinner or lunch. Try to eat fewer processed carbohydrates, look for steamed or sautéed vegetables, stick to leaner meats. And voila! You can be rest assured that your body will thank you for it later.

RTS’s own road warriors share their tips on what works for them: Raja Kasilingam suggests:  Avoid alcohol; eat protein bar and vitamins; stick to meals that are vegetarian and/or include  fish to the extent possible. Mukundh Parthasarathy agrees with the minimal or no alcohol policy. In addition, Mukundh hits the hotel gym at the first chance he gets and adds an extra 30 minutes to help him sleep better the first night.

There are many ways that a road warrior can attempt to maintain his health. The key point is consistency and discipline. One can find several valuable tools and tips on the internet and there are blogs dedicated to fitness and nutrition for consistent travelers. Here are a few (please note that RTS does not endorse these):

Travelandfitnessblog.com

Nerdfitness.com

Fittraveler.com

Are you a road warrior with tips on health and nutrition? What has been one of your favorite cities that has been conducive to a healthy lifestyle? We would love to hear your thoughts. Leave us a comment!

Charmi Ramchandani

Account Manager

Recruiting reinvented

“Recruitment”, “Staffing”, “Candidate sourcing”, "Headhunting" are just some of the popular terms that explain what a person whose job it is to match a job seeker with an appropriate position. There was a time when the “Recruiter” picked up the phone and made a cold call to a potential employer in the hopes of finding appropriate placement for the candidate and making a commission in the process. I recall my days of opening up the yellow pages and scanning down the companies listed and calling tirelessly till I got a lukewarm “maybe I’ll see your candidate next week”. Even then, there was a 100% chance of the meeting never happening – either the employer cancelling or the candidate being a “no show”.  Recruiters back then had to have the most positive outlook to handle the innumerable “NO”s before landing on a “YES”. Talk about personifying optimism! Still, I believe this tireless exercise built character and a thick skin and created some wonderful sales people.

The past few years have now changed the look of recruiting. It is no longer just plain old cold calling. In fact, no employer wants to hear a pre-written, impersonal script and more often than not, neither does a recruiting professional want to narrate it like a robot.  With LinkedIn and the other social media tools, the emphasis is more on relationship building at any level of positions. Be it executive level placement or technical level recruiting  or even seasonal staffing, a seasoned recruiter now has to step up his/her game to create relationships built on trust with employers. An employer (company) is more willing to engage with a recruiter or headhunter if there is an element of sincere interest and mutual trust in helping the employer and his company achieve its long term goals. A systematic strategy presented by the head hunter that reflects timely implementation and cost efficiencies is more likely to receive long term acceptance. I believe this is even more important with more and more companies outsourcing a lot of their jobs overseas. The reliance on a trust worthy professional who will hire candidates as if it were his/her own company is gaining a new level of significance in the travel and transportation vertical.

In keeping with the relationship building idea, we at Revenue Technology Services, seek to create an environment where a client is comfortable trusting us to provide decision support  solutions covering the areas of revenue management, pricing and scheduling as well as IT Services strategies to achieve their long term goals of profitability and cost efficiencies. We strive to network with our clients over social networking sites such as LinkedIn and attending trade shows as well as hosting our annual summit, with the understanding that relationships take time to develop and dedication to maintain. The one mantra that is never compromised upon is that our client’s success is our success.

As always, we love to hear your feedback and suggestions on our blog. Please feel free to leave us a comment!

Charmi Ramchandani

Account Manager