Excel is a great tool and after permanently upgraded versions, it becomes more and more sophisticated. But on day-to-day revenue optimization, Excel may put your company in an unstable environment with a lot of hidden costs. Let’s share a few examples of my personal experiences.
Excel is a great tool and after permanently upgraded versions, it becomes more and more sophisticated. But on day-to-day revenue optimization, Excel may put your company in an unstable environment with a lot of hidden costs. Let’s share a few examples of my personal experiences.
Please take 5 minutes to answer the following survey (also available here):
If you have more than two no’s, your company knowledge management and yield decision process are at risk.
When I started my RM carrier at Disneyland Paris 20 years ago, I saw for the first time how powerful could excel be in merging databases from various sources into easy-to-use reporting. Every Monday, a 3-hour VBA macro process runs, and hopefully, if nothing broke the query, we got a set of reports for the week at 10 am to analyze the booking patterns and the reservation portfolio.
But, these fantastic VBA scripts were only known by his creator. He was the sole person being able to configure them and fix any bugs. Honestly, it was working pretty well and we got great results. But all the process and system knowledge were in the control of one guy.
Many years after, during my consulting activities, I was working for a large car rental company. Their Revenue Manager was recently hired. He initially took over the previous excel analytics developed by his predecessor. Assuming a significant amount of time was spent to reverse the initial code used to set the VBA macro process. But with operation pressure, no time: so let’s pray that a couple of daily hours required to update the yield reports did not fail.
Thus he focused on his new set of reports integrating a broader logistic vision on top of the demand perspective approach. Again, new VBA macros in addition to the previous ones have been developed by the guy and known by him only. But good results were generated. So I suggested pushing for a budget to industrialize the process in a more robust code that could be supported by IT. Guess what, not even one Euro cent has been allocated to this project. And when the revenue manager left, the company figured out that the yield and logistic optimization reports were not usable in the long run. And it was 10 years ago.
Guess what is happening today? Still the same. For the large car rental companies we are working for, most analytical daily reports are built on excel. It is nice, it is performing well as long as the people are in-house. When they leave, the Management realizes that nobody knows how it works except the guy that created it.
A new example? In 2016, I know revenue managers still crunch data and feeding their excel spreadsheet automatically…or even manually! Is this improving the company's assets? Is this reinforcing the company analytical pilar? Is this contributing to the company's knowledge management?
Piloting revenue of a car rental company has become more and more complex over the last 5 years. Not only because rental operations is generating a big volume of combinations (12 to 15 duration bands x 20 car groups x 365 days of departure compared with last year!) but mostly because the electronic distribution speeded up the flow of possibilities and time allocated to analyze and to decide in the most efficient way possible.
Mixing so many sources of information (fleet, bookings, channels, sources, competitive market surveys, online reputation, sales actions, and performance tracking) requires a robust and powerful database and robust hardware to support instant computation. And Office Excel, even Access, can not support it!
When the entire revenue piloting system is built on Excel, it always requires manual input (file controls, macro launcher) that can only be performed by a human. Some reports are taking so many hours to run that they can be updated only once or twice a week. And the results are shared via static pdf email service or are kept locally by the revenue managers for analysis.
Bureautic software is always seen as cheap. In practice, applications and reports are designed internally by the business analyst. He models what he thinks is the best from his perspective but with limited technical skills. For the company, allocating an internal resource doing this IT job does not appear to be an expense. But it is. Revenue Managers cannot be IT experts at the same time. Their job is to analyze, take actions and measure performance.
So, are you sure all the above examples are far from the life of your own company? May they impact your daily business?
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