Hello, everyone. Thank you so much for joining us
on this Professional Pricing Society podcast.
My name is Terrence, and it's a great time to have another
discussion, especially about AI. And so we have two very special
guest speakers with us today who's going to be diving into
this topic with us about what does it take to be successful
with AI. Today we have Kavya Merleder who
is the product Manager at PROS. She leads strategy and
implementation for AI based pricing optimization software
used by some of the largest enterprises in the world.
And we also have Heather Ritchie who is a strategic consultant
with PROS as well. And you guys are going to be
diving into this conversation with AI and we're very excited
to have you. First and foremost, I want to
ask before we start, how are we doing today?
Everybody doing good so far. Really fantastic.
I. Need to be here.
Good. Good.
Glad to have you guys. So we'll just start with the
very first question, then you guys can take the time to, you
know, answer these as best as you can.
But what I want to ask, what is the first thing that you want
people to know about AI and artificial intelligence?
Where should we start our approach and our thinking when
it comes to AI? Yeah, Terrence, I can take that
one. So I think the first thing that
I'd want people to know about AI is that it's it's not new.
There's this idea and it's feeling out right now in the
general public that just because the public is finding
applications for AI, that this must mean that it's it's new and
thus it's inherently risky. But companies have been
developing and implementing AI for decades, specifically in the
pricing space. You know, Kavya and I both work
for Pros and Pros released their first AI pricing product back in
the 80s. So there's been decades of
development and research that have gone into these types of
products so people can be confident in the results, in the
AI results in this application. Yeah, and that's a good point.
Artificial artificial intelligence is not new, so I'm
glad you made that apparent for for listeners.
And I can add a little more to that.
I think one of the important things to know about AI is that
ultimately it's a reflection of humanity.
I think that a lot of responses we've seen towards AI include
both. Excitement about its potential
as well as fear and nervousness. And I actually think both of
those can be valid responses because I think that is a
reflection of humanity's intentions and the potential we
have to do both to do both good and as well as be self-serving.
But I think that the what's really exciting about this
conversation is US collectively developing ways.
To use AI as a tool for good, as an and as a tool for helping us
save time, progress to a better place, even save lives.
So I'm really excited about the ways that can help us move
forward as as a community and as a planet.
OK, that's good. Yeah, AI, you know, it is a
means of being more efficient in a lot of aspects.
Now, since this is a pricing podcast, you know if a company
was looking for an AI solution to fit their pricing
application, what should they consider when evaluating
different AI solutions? Yeah, Terence, great question.
We see this a lot with the people that we work with.
I think ultimately when you look at what AI is, it is a system
that takes in data. It processes the data and learns
from it and it provides outputs along with.
A software or a system around it to help you interact with those
outputs. So I think when you're a company
that is looking at how to evaluate what to look for in an
AI solution, you're really looking for, you're really
looking for those same three elements.
You're looking for what data it takes in, what it does with the
data, and how it does it. So you know, diving into each of
these, looking at the data that it takes in a lot of companies
and organizations may have had a lot of difficulty with
collecting data as well as with having the data in a very
specific format. So you really want to look for
solutions that are very flexible with their schema of data, that
have integrations with different CRMS and ER, PS, so you're able
to flow your data in easily and have a lot of automation built
in, whether that's automation around.
Data cleansing, automation around scheduling, how often
your data comes in or or any modifications you want to do to
your data before it feeds into the AI with what it does with
the data. This is really the heart of the
AI, and I think this is really important to know that not all
AI is equal, and AI doesn't just mean one thing.
So when you look at what an AI system actually does with the
data, it is really important to dive in a step further and
consider is it, is it a solution that is really good at
accounting for sparsity? Is it a solution that is really
that, that is actually using AI to look at trends over time,
which is really important as we've seen in pricing in the
last few years? How does it navigate elements
that are really changing frequently, like changing costs
or changing market indices? And what scientific measures is
it using? Is it using the most recent, the
most innovative solutions that show you the best statistical
measures of success? So we really urge customers to
look into these questions and evaluate AI for what it really
is doing. I think that's not.
That's not a mystery. It is doing what humans can do,
but better, and it's really important to ask those questions
and look at what it's attempting to do with the data to get these
to these outputs. And I think finally, this last
point is often something that isn't given very much importance
in the conversation around AI. But when you're a company that's
actually using AI software for pricing or for anything else,
looking at the surrounding system, at the how is really
important. So not only do you want your AI
to be giving you the perfect best results, but you also want
a system that is really explainable.
You want your user to be able to go in and actually understand
why the AI is recommending what it does.
You want them to be able to go in and provide feedback to the
system, or even be able to change certain parameters to be
able to change the data that's going going in.
If they have a new strategic Business School, you want them
to be able to apply that by themselves.
So looking at self-service, transparency, explain ability,
all of these are really key to being able to use AI
successfully and I would say are part of the AI software as a
whole. So when you look at these three,
I think you've really done a comprehensive view into into
understanding what an AI system can offer you.
That's good that there's a lot that goes into AI.
And based on my understanding of what you just said, there's
different levels or different types of AI.
And then of course, I would imagine different companies can
use AI for different reasons. But the three different points
you made made mention of, you know, that makes a whole lot of
sense to intake the data, what it what it uses the data for and
how does it present the output. So it's a lot to think about
when when considering AI. And then you have to also ask
yourself the question as a company, how do you even no you
are ready to use AI as a company?
That's a great question to think about right now because everyone
wants to use it, but not everyone's necessarily ready to
use it. Because I think it's all about
really the the mindset of of your company.
You know once you've identified a part of your business that
that can be improved with AI. You also need to identify at a
high level what type of data you you might need to feed into the
tool. Who's going to be impacted by by
this process change and are you as a company open to that
change? You know, knowing what type of
data you need, Again, at a very high level it tells you what
teams need to be involved. So knowing this will let you
know at you know the very beginning who to get in contact
with, who to bring into certain key meetings, and who you need
to get buy in from. You know at the at the
beginning. You also need to know who's
going to be impacted by this change because it lets you know
who's going to be available for more high value work.
So once you have an AI solution actually in place, it's going to
speed up many of your processes. It's going to take up the place
of some of those those processes and that means that your team
can actually spend time working on things like analytics and
strategy and those really like high value, high level thinking.
Detailed work. So I think that's really
important to understand who's going to impacted by that that
you can start working on additional future projects that
you know can take advantage of those skills and that can be
used for motivation for for these types of projects.
And then my last my last thing I think that you need to consider
is you know are you open to change.
So it's really important for these types of.
Those these types of projects that your teams are are open to
change and that's not only the change in their current process
but also potential changes to strategy to the new processes
that will be built. You know based on your your
findings from AI. One of my favorite things that I
that I loved when I was actually on the implementation side of of
the house was being a part of an AI pricing implementation when
the customers would. Understand something new or
learn something new from the results that they probably
couldn't have, you know, easily found those connections
otherwise. So seeing connections in their
data that actually influenced, influenced a change in their
strategy that they then implemented and then that fed
back into the AI tools. So just being really open to
change, open to to the results and what you can do with them I
think is extremely helpful that's that's really good and
it's, it's unfortunate but a lot of companies may not be open to
change and that's a real thing. But as we know the I guess
companies or even just the individual people who are open
to change are the typically the ones that are going to be more
successful than than not because they are adjusting to the
changing Times. Now when you think about change
and transformations, what can companies do to be successful
regarding their digital transformation of the growing
and changing times? Yeah, my last response, I
mentioned teams countless times, mentioned a bunch of different
teams. It's critical that you have
alignment like alignment is key for digital transformation and
you need both vertical and horizontal alignment.
So the goals of your your AI project within this digital
transformation, they need to align with the vertical goals of
your company, because otherwise they they won't be successful.
But you also need to have alignment between your teams
horizontally. So if your sales team has has
one goal with how to use AI, but it needs to be integrated into
your architecture that your IT team is in charge of.
Well, you need to make sure that the goals of your IT team
aligned with you know, this tool that you want to implement for
sales or for you know another part of of your business.
So as long as you have this, this, this horizontal alignment,
you can really avoid those conflicting initiatives that I
see, you know teams not be as successful with a digital
transformation. And also having specifically
that horizontal alignment, it really helps your team build
build trust. And you can't have success
without that, that trust between the different teams.
Yeah. And I I think to add to
Heather's point, it's really important to trust your team
members. I think an example of a negative
digital transformation would be just going in and insisting that
all of your teams constantly and only do exactly what this new
technology tells them without really taking their expertise.
Their intentions, their motivations and what they've
learned so far in their trade into account.
And I think a lot of when we look at other industries that
have adopted AI successfully, for example, you can look at
healthcare where physicians may use AI to help detect cancerous
lesions. This isn't a replacing of a
physician with AI, absolutely not.
What this is really doing is. Using AI to help make their work
faster, more efficient and being able to point out things that
maybe they may not have noticed, but you still continue to give
power to the physician to interpret and to make the final
decision. So in this case, an AI system
may be able to point out certain variables that in an MRI image
that may be suspicious or may point towards it being a
cancerous lesion, but the physician really gets to look at
that in context of the patient overall and.
Interpret it and make that final call.
I think we've seen similar examples with IBM Watson IoT,
for example, where IBM Watson is used to be able to identify if
certain machines or equipment may be malfunctioning and any
prescriptive guidance that a technician might do.
But again, it's providing recommendations as to certain
action steps that they can take along with a confidence score
and along with. The reasons why it thinks those
are the right action and the technician can look at those,
they're definitely probably going to see things that maybe
they hadn't, they wouldn't have been able to come up with by
themselves, but now they have this tool that's really
providing them that experience. At the same time, the technician
really is there in that moment, and they have the power to
really use that AI, interpret it according to their expertise,
and make the final call. And we see this a lot with you
know, successful pricing digital transformations as well.
This isn't a replacing of the pricing team and we never want
it to be. We never expected to be
presented as such. It is a tool to help our pricing
and our sales teams really be able to use the power of data,
to use the power of what we've seen historically and to use the
power of something that can think.
Think faster and think, think better than them in certain ways
along with supplementing their own expertise of what they're
seeing in the industry and what they're seeing with the customer
or the prospect in front of them.
So we really believe that this is a partnership and in a
digital transformation, what we're doing is we're not
replacing, we are adding and we are augmenting the power of what
the company can already do. That's really good, That's
really good. That and that makes perfect
sense as well. It's not something that's
necessarily meant to be a replacement, but it's a tool to
help strengthen the organization, to help allow them
to become more efficient, quicker and also like you said,
just to think differently in certain ways.
And then also Heather, I'm glad you mentioned the whole aspect
of teamwork, you know regarding digital transformations or even
just reaching a goal as a company.
A lot of departments have to be on the same page and that can be
a process moving you know to to get all the all the departments
on the same page. But that's how the dream works.
Teamwork makes the dream work and that's how you know
transformations successfully happen in the long run in the
long larger scheme of things. Let me ask you guys this, once a
company has decided that they're ready for AI and they've already
selected AI solution and the solution has been implemented,
how do they know it's going to be successful?
Yeah, I could take that turns. So this is a great question
because it is crucially important to constantly be
measuring adoption and be measuring value.
A digital transformation or adopting an AI solution isn't
just a plug. And forget about it forever kind
of play here. We really want to make sure that
our we we want to make sure that companies continue to really
measure what value they're seeing from it and know that for
themselves. So some ways to measure value, I
think there are some core questions to ask.
One is, even during your implementation or before you
really start using it, the importance of engaging with the
system, looking at the results. Really looking at why those, why
those particular results or recommendations are showing up
and for you and your team to feel comfortable and confident
of those because that provides a really strong starting ground to
then six months later or one year later when you're looking
at adoption which is I've, you know, I've had my system in
place, it's providing AI based recommendations for pricing.
How do I know that this is these recommendations are actually
being used, or are they being ignored?
So when you when you know that the results are reasonable
because you've, you know validated them yourself, now you
have this next step or of checking whether your team or
your company is really adopting those those recommendations.
And if not, you have a starting point to know well you know
which which department or which team are you not really seeing
adoption and what's going on. I think it's really important to
bring curiosity to this kind of question.
Is there is there something the team knows that maybe isn't?
Included in the data that we need to start bringing in or is
is there something else going on where they aren't necessarily
familiar with the explainability tools.
So and having those allow them to much interact with the system
much better and have better adoption.
So looking at adoption and diagnosing adoption is really
crucial. But beyond that, I think the
final step is really measuring value.
So you want to know that when you are seeing adoption, you're
seeing value and in the case of pricing?
This means that you're meeting your financial goals.
Are you making the kinds of revenue, are you making the
kinds of margin that you and the uplift that you expect to see
when you're following this pricing solution and when you
are seeing adoption. A lot of times we've, you know
we've seen with our customers at PROS we have a measure of.
Where you see adoption, what is the revenue that you're seeing
and how do you compare that to, you know, a similarly sized unit
or similarly sized set of sales where you weren't seeing
adoption? And is there, is there more
revenue there or less revenue? And I think this, this is an
example, it really depends on this, the company's goals and
what they're trying to achieve with their pricing.
But when you have that kind of that kind of comparison and when
you are able to really see for yourself.
Whether this AI solution is providing value to you, how much
is it providing? Is there opportunity to increase
it? Is there opportunity to be maybe
be educating your company and really aligning your teams more?
I think that is crucial and that's a journey that goes
beyond implementing and really ensuring the continued growth
and success of how an AI solution functions in your
company. Very well said, Miss Covey, I
want to thank you both so much for being a part of this podcast
today for just engaging with me on this discussion about
utilizing AI in the realm of pricing.
Before I let you go both of you, I want to ask is there any type
of resources that listeners can visit or grab a hold of to learn
more about you individually or pros and what pros stands for
and different things of that nature?
Yeah, people are welcome to reach out to us on on LinkedIn
to connect and chat. And you also can go to the pros
website pros.com that's pros.com to find more information about
the company that we work for specifically and it's the AAI
tools that PROS has available. Awesome.
Thank you so much guys for your time today and until next time,
we'll see you guys then. Bye, bye.