About 10 years ago, my pastor called me a Resource Person. I guess that term has stucked, and I'm still at it, but not so much for Youth Ministry anymore, but for Healthcare Financial Management.
I came across this short write up about revenue management processes.
Title: Triple Play
Key thoughts: Revenue management process includes 3 components: price analytics, price optimization, and price execution.
Summary:
Price analytics looks at how your existing pricing is (or isn't) working
Price optimization then asks what your price should be, given market conditions and retrospective models. It involves complex pricing science and forecasts. It goes on to elaborate that if you need a 2.5% in price to reach a profit goal, you don't have to increase prices across the board by 2.5%. it's about power and risk...we'll increase price most where we have high power and low risk, and be most cautious where we have low power and high risk.
Price execution is what helps front line staff price a deal on the spot. It can pulls up the customer's transaction history along with his "willingness to pay" score and tell immediately what price the customer is likely to pay for the particular transaction. Staff can also see what similar customers are paying for the same transaction, and how fast-moving is the product.
My comments:
It will be interesting if hospital can look at revenue management with this 3 components. Right now we do a little of price analytics, has emphasize on price optimization (alas using very manual and intuitive methods, rather than a structured methodology) and price executive is plain reliance on pure instinct by front line staff.
Reference:
CFO Magazine, July/August 2008. page 16, intech by Yasmin Ghahremani.
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