SAS Forms Profit Optimization Practice

Long-term strategy calls for BI vendor to integrate its various software tools to give customers improved analytics to maximize pricing and profit potential.

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Posted on Aug 04, 2008

Business intelligence software provider SAS today announced the formation of a Profit Optimization Global Practice that will work with customers to integrate their revenue management, CRM, pricing, and distribution tools to consolidate demand data and optimize profitability.

Rather than simply selling tools, the company’s long-term strategy is to build solutions, either in a consulting capacity or working as a partner to integration consultants, such as Accenture or McKinsey & Co. In effect, through the Profit Optimization unit, SAS has hit upon a way to bundle its data analytics expertise in areas such as forecasting, statistics, simulation, data integration, and price optimization, to provide integrated solutions for customers.

The move is expected to take SAS well beyond its largely retail roots into manufacturing and other industries anxious to improve their pricing models and understand their operations more fully, especially in a challenging economy. “It all comes back to supply and demand,” Steve Pinchuk, general manager of Profit Optimization and the leader of the new practice, said in an interview with Managing Automation. SAS’ products can model complex operations and “consider huge amounts of data” to improve decision-making.

By presenting a unified view of “all the components that create demand in a company,” Pinchuk said, SAS can help customers organize, align, and monitor their operations to increase their profit opportunities. He cited a McKinsey statistic that holds that a 10% increase in forecast accuracy will bring at least 2 percentage points’ increase in profit.

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