| | March 20208CIOReviewBy Jonathan McWilliams, Director, Revenue Operations - Digital Properties, ViacomPEOPLE SOLUTIONS > TECH PROBLEMSAs I wrote this article, it became evident that focusing solely on the tech-side of revenue management would be ignoring the crucial ingredient that underpins every digitized system that has ever existed; people. The he's and she's that implicitly decide if a company's revenue management systems will either drive business decisions going forward or be ananalysis chokepoint. As you look to upgrade or completely overhaul revenue operations and revenue management, consider the four principles below: 1. Clearly define how a revenue management system will advance your company's business strategyThe definition of a Revenue Management System (RMS) differs by who you ask and what their job-function is.In general, the technology investments your company makes ­ particularly RMS ­ should depend largely on which industry your company deals in and the strategic goals your company has made. Understanding the nuances of your industry will help define what your company's revenue lifecycle looks like. Naturally, the nuances of your company's revenue lifecycle should translate directly into your company's selling strategy. Finally, the selling strategy should result in subsequent technology decisions ­ RMS being one of the most crucial of these technology decisions. Takeaway:Honestly assess whatstrategic impacts an effective Revenue Management System would have for your company before looking at potential products and system enhancements.Thoughts to ponder· What is the current landscape of your company's industry?o Is your business high-volume?o Is the pricing function commoditized?o How long is your sales cycle?· Would an upgrade to RMStruly advance your business strategy oris it just another checkbox on the technology to-do list?2. Build the foundation of your reporting infrastructure before adding new piecesA few years ago, I was walking through Brooklyn and saw a sinkhole large enough to swallow a car. Apparently, this part of the street lacked a solid foundation, but that deficiency had been covered up when the first layer of pavement was applied. Over the years, additional layers of pavement were poured until the root issue was buried under five feet of tarmac. Eventually the facade crumbled, and Brooklyn was left with a Volvo-size hole in its street. Is your company's approach to revenue management systems similar to the tarmac example? Has your team piled on vast amounts of reporting tools in hopes that they will "fix" the lack of data infrastructure? If the basic components of revenue reporting ­like consensus on revenue type definitions, data flow, and data QA­ are not solid, then an RMS will add very little value.To visualize your firm's data reporting foundation, try this exercise; 1. Write out your company's revenue formula by breaking out each individual component (the example shown below is for digital media advertising):Revenue = [total viewers] x [proportion of viewers that are served an ad] x [price charged for the ad]2. Drill down on each component you have listed and decide which dimensions are needed; time and sales product are obvious inclusions. What about sales region, customer identity, sales method (online, in-store, phone), or even the salesperson? Furthermore, when are these dimensions captured in the sales cycle - at the time of sale or throughout the entire sales cycle?3. Visually draw aprocess map showing how each of these dimensions feed into a data warehouse. This step is crucial and can potentially show weak points in the "data plumbing".Takeaway: Stacking random systems on top of each other to fix data problems will exacerbate the root issue. First, focus on mapping out the current reporting architecture - data flow, data sources, and data quality checks ­ and make sure a specific team is accountable for each of these areas. Jonathan McWilliamsIN MY OPINION
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