Part 2: The Tree – by Gabe Smith
“If a tree falls in the woods…” you know the rest. How does this apply to price management and optimization, which one would assume I would be writing about? Well, allow me to explain.Imagine a forest full of trees, each tree representing one of your customers. You supply these trees with something they value, perhaps something they cannot do without, such as carbon dioxide, sunlight or water, or perhaps something which allows them to utilize these necessities more effectively. This keeps the trees healthy and vibrant, allowing them to thrive in a competitive ecosystem where there are numerous threats to their existence (such as other trees taking sunlight, pests, and environmental factors). You are as dependent on their survival as they are on yours, so it’s a symbiotic relationship.
Now imagine, all of a sudden, one out of thousands of trees in your proverbial forest falls. Did you hear it? Were you listening for it? That is a question rear facing analytics can answer, should you have the right data and ability to examine it. But, in reality, the more important question is this: “What are the warning signs that I could have seen to prevent it?” Now we are talking about the basis for predictive analytics, where you are seeing and alerting the organization to an impending problem before it is too late to do anything about it.
This is the basis for the 4th Industrial Revolution. This might seem like quite the leap from a cliché and a metaphor based on it, but it is true nonetheless. This sort of prediction will power the coming wave of AI and Machine Learning enabled decision making and automation in a way that few have grasped or leveraged. Yet it is becoming increasingly democratized in a golden era driven by big data, sensors, affordable memory, computing power and the workforce skills required for synergy.
Society as a whole has only begun to harness this power and be affected by its long-ranging socio-economic impacts. But in certain areas, we are already able to leverage this technology to radically improve on the status quo.
One such area is Price Optimization and Management, where you can apply data science, machine learning, and management insights to drastically increase the speed and effectiveness of using intelligence. You cannot just see why something happened, but predict what will happen and take corrective action before the tree has fallen. For more information on how, please see my upcoming webinar on “AI and Machine Learning powered Price Optimization: What you need to know.”
This technology will transform not just pricing, but society as a whole. According to Gartner, this will impact 9% to 47% of jobs, creating more jobs than are lost in the regions and companies that prepare for it with the appropriate investments in education, technology, and people.
In my next post, which is entitled “Prevention”, I will outline the people, process, systems and approaches to avoid the Truck and the Tree. Stay tuned for that…