SCOTTSDALE, Ariz.--(BUSINESS WIRE)--In pricing and revenue management, hedging your bets with a tried-and-true process may be riskier than taking a chance on something different. Companies that take a conservative route to pricing practices could lose millions in revenue, risking their future viability.
“When you marry people, processes and the latest generation of today’s pricing and revenue management technology, companies can solve problems of stunning complexity”
Over the past few decades most hotel chains have adopted some form of automated revenue management (RM) system; however, some medium and large chains have not. Worse yet, as some of these chains churned through acquisitions and ownership changes, their RM systems were abandoned or shut down. During the last decade’s brand consolidations, industry realignment and ownership changes, business intelligence (BI) tools grew in maturity and sophistication.
In fact, the ability to track, measure and review revenue trends has become so timely and sophisticated that some revenue managers have been convinced that pricing and revenue management systems aren't necessary.
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, has identified common pitfalls of relying on technology alone and outlines why best-in-class companies need to integrate technology, people and processes to unlock powerful revenue potential.
“The competitive landscape has fundamentally changed, especially with dynamic pricing and the mobile revolution driving consumer behavior,” said Bill Kotrba, vice president of industry strategy for leisure, travel and hospitality, JDA Software. “To get the upper hand, companies must bridge technology, people and the latest pricing science to gain greater visibility and insights from across their networks to effectively balance inventory and demand – for maximum profits.”
Common Pricing and Revenue Management Pitfalls
Today, sophisticated BI tools offer the exhaustive ability to track, measure and review revenue trends, leading some revenue managers to believe that pricing and revenue management software solutions aren’t necessary. Consider these common myths:
Slick interactive reporting tools are “good enough.” Using BI tools as primary instruments of revenue management, managers and analysts pore over dashboards and reports for hours, adjusting pricing or inventory based on recent trends and gut reactions to measurements they see. The result is a crisp picture of what happened in the past, but no visibility or insight about what’s to come.
A room full of smart people beats out technology. While revenue managers play critical roles, companies without a diversified approach that includes a healthier balance of technology and human inputs are vulnerable when a team member departs the company.
Automated forecasts can’t be trusted when markets are volatile. Actually, the opposite is true. Humans deliver successful forecasts when demand is consistent. When it comes to uneven demand, the algorithms found in today’s revenue management technology are far more accurate at forecasting than people are.
True pricing and revenue management goes beyond revenue measurement, especially when the latest demand forecasting and optimization technology is at the heart of the solution.
“When you marry people, processes and the latest generation of today’s pricing and revenue management technology, companies can solve problems of stunning complexity,” said Kotrba. “Pricing and revenue management is about intelligently placing a bet on what will happen in the future — predicting and optimizing — which unlocks revenue upside far beyond simply measuring and reacting.”
For more information, download the JDA article entitled, “Revenue Measurement Is Not Revenue Management” or visit www.jda.com/revenuemanagement.
Tweet This: Why science and automation beat out a room full of smart people (via @JDASoftware) http://jda.com/pitfalls
About JDA Software Group, Inc.
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, is a leading provider of innovative supply chain management, merchandising and pricing excellence solutions. JDA empowers more than 6,000 companies of all sizes to make optimal decisions that improve profitability and achieve real results in the discrete and process manufacturing, wholesale distribution, transportation, retail and services industries. With an integrated solutions offering that spans the entire supply chain from materials to the consumer, JDA leverages the powerful heritage and knowledge capital of acquired market leaders including i2 Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA's multiple service options, delivered via the JDA® Private Cloud, provide customers with flexible configurations, rapid time-to-value, lower total cost of ownership and 24/7 functional and technical support and expertise.
This media alert contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally accompanied by words such as “can,” “will,” “ensure,” “help,” “enable” and “expect” and other words with forward-looking connotations. In this press release, such forward-looking statements include, without limitation, remarks that implementing automated pricing and revenue management systems can provide benefits to companies. The occurrence of future events may involve a number of risks and uncertainties, including, but not limited to: (a) certain strategies and solutions may not perform exactly as anticipated; (b) there may be implementation and integration problems associated with our strategies and solutions; and (c) other risks detailed from time to time in the “Risk Factors” section of our filings with the Securities and Exchange Commission. Additional information relating to the uncertainty affecting our business is contained in our filings with the SEC. As a result of these and other risks, actual results may differ materially from those predicted. JDA is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information.
“JDA” is a trademark or registered trademark of JDA Software Group, Inc. Any trade, product or service name referenced in this document using the name “JDA” is a trademark and/or property of JDA Software Group, Inc.
JDA Investor Relations Contact:
Mike Burnett, 480-308-3392
GVP, Treasury and Investor Relations
JDA Public Relations Contact:
Stephen Phillips, 469-357-4826
Public Relations Manager