Many industries are focus of innovative techniques from SAS

August 4 2008 – Old-school pricing is dead. New profit-optimisation techniques pioneered by the airline industry, and more recently by hospitality and retail, are replacing traditional methods of determining cost of goods and services and adding in optimal profit margins.

To help enterprises maximise profitability, SAS, the leader in business intelligence and analytics, has formed a new Profit Optimisation Global Practice. The division will apply revenue-management techniques to help companies optimise profitability, using advanced analytics to scientifically and proactively determine the most profitable market segments and prices. To achieve this goal, SAS will build a new profit-optimisation solution that will integrate revenue management, customer relationship management, pricing and distribution. "You might call it seller's remorse when you realise 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.

"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."

A noted expert in revenue management who created systems for airlines, hotels, railroads and tour operators, Smith believes the new SAS unit is on the leading edge of technology that first followed US airline deregulation, spread to other segments of the travel and hospitality industry, and is now poised for adoption by many other industries.

SAS, which helps many customers increase their profitability through business intelligence, also announced today it acquired IDeaS Revenue Optimisation, the leading provider of revenue-optimisation solutions for the hospitality industry.

IDeaS will continue to focus on the hospitality industry. Its solutions, combined with leading-edge SAS® capabilities including forecasting, optimisation and statistics, will also 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. “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.”

IDeaS customers such as Mandarin Oriental San Francisco have come to rely on IDeaS solutions.

“As market demand continues to change, I need to be able to communicate the necessary information to the organisation in the most concise, efficient way,” said Melanie Cooke-Kridech, Director of Revenue Management for Mandarin Oriental San Francisco. “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.” Since deploying IDeaS V5i, Cooke-Kridech said that she has become more efficient and produces more accurate forecasts.

The SAS Profit Optimisation Global Practice includes revenue management experts from various industries. Senior team member and leader Steve Pinchuk formerly served as Corporate Vice President of Revenue Management and Distribution at Harrah’s, where he worked to integrate Harrah’s first revenue management systems and practices with their world-renowned customer relationship programs.

The new practice builds on SAS’ continued success in delivering revenue-optimisation solutions to leading global retailers. SAS will continue to focus on retail, and the Profit Optimisation Global Practice will specifically serve industries other than retail.

About SAS

SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. With innovative business applications supported by an enterprise intelligence platform, SAS helps customers at 44,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world The Power to Know® .

Published on: 12:00AM on 4th August 2008