SAS Forms Profit Optimization Global Practice
August 04, 2008
As the economy is experiencing a continuing slump and competitive intensity increases in nearly all industries, new profit-optimization techniques are needed in order to ensure that a company can not only make money – but also that it can survive. Traditional practices are no longer adequate to ensure profitability and organizations are demanding change.
To help enterprises ensure that they can maximize profitability, SAS (News
), a major player in the area of business intelligence and analytics, has formed a new Profit Optimization Global Practice.
This division will apply revenue-management techniques that are designed to help companies to optimize profitability through the use of advanced analytics to scientifically and proactively determine the most profitable market segments and prices.
To achieve this goal of optimizing profitability, SAS will build a new profit-optimization solution that will effectively integrate revenue management, customer relationship management (CRM), pricing and distribution.
"You might call it seller's remorse when you realize you could have priced something you sold higher – perhaps much higher," said Barry Smith, consultant and former Chief Scientist for Sabre Holdings and Senior Vice President at American Airlines, in a Monday statement.
"Revenue management ensures maximum profitability at the time of sale by factoring in future demand and revenue potential," Smith said. "These techniques, most valuable in periods of high demand, are becoming equally important in low-demand periods by directing marketing initiatives to fill gaps."
Considered an expert in revenue management, Smith views the new SAS unit as being on the leading edge of technology that first allowed U.S. airline deregulation, spread to other segments of the travel and hospitality industry, and is now poised for adoption by many other industries.
SAS has also announced the successful acquisition of IDeaS Revenue Optimization, a provider of revenue-optimization solutions for the hospitality industry. The addition of solutions from IDeaS to SAS capabilities including forecasting, optimization and statistics, are expected to be applied to other industries outside of travel and hospitality.
“In addition to building on the success of IDeaS, SAS will tackle business problems in revenue management that are being ignored,” said Randy Guard, SAS Senior Director of Product Management, in Monday’s statement.
“We will integrate revenue-management capabilities with SAS’ powerful analytics, data integration and business intelligence applications to solve business problems spanning distribution, pricing and customer experience management.”
The Mandarin Oriental San Francisco is one IDeaS customer that has come to rely on their company’s solutions to drive revenues and profitability.
“As market demand continues to change, I need to be able to communicate the necessary information to the organization in the most concise, efficient way,” said Melanie Cooke-Kridech, Director of Revenue Management for Mandarin Oriental San Francisco, in the Monday statement.
“We chose to upgrade to the newest IDeaS version because it provided smart, simple technology that allowed me to generate reports and process information quickly and accurately.
“With the increased pressure of being required to pull data quickly and stay ahead of the game, I need the information at my fingertips – even to the extent of printing information right out of the system to use in my yield meetings,” Cooke-Kridech added.
The SAS Profit Optimization Global Practice will include revenue management experts from a variety of industries. One such expert, Steve Pinchuk, senior team member and leader, previously served as Corporate Vice President of Revenue Management and Distribution at Harrah’s.
The new practice builds on SAS’ continued success in delivering revenue-optimization solutions to leading global retailers. It is on this proven strategy that SAS will continue to focus, while also streamlining its work on the retail industry. The Profit Optimization Global Practice will specifically serve industries other than retail.