Business volatility is here to stay. The world is changing much faster, and so are your competitors. They’re bringing new models to market as quickly as conditions change. They’re constantly updating what they’re selling, how they’re selling, and how they’re packaging and pricing their offerings. To thrive, you need to create the next generations of customer and employee experiences in real-time. This requires continuously learning and adapting. How are costs, currency, and customer demand patterns changing—from moment to moment? Which sales channels and tactics are getting the best results? Doing business in real-time is the best way to optimize your profit and revenue. And now is the time, because for the first time—with digitization, automation, and AI—business in real-time is possible.
PROS: Please welcome Val Vigoda and Ryan O'Connell from the award-winning musical, Ernest Shackleton Loves Me, and President and Chief Executive Officer of PROS, Andres Reiner....
Andres Reiner: Good morning and welcome to Outperform 2023. Ernest Shackleton, the famous explorer, was determined to get to the South Pole. In January of 1914, he ran an ad, "Men wanted for hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger. Safe return doubtful. Honor and recognition in case of success."
Andres Reiner: But nature disrupted Shackleton's meticulous plan.
Andres Reiner: With his ship trapped in ice, Shackleton made a new plan, to wait it out until the ice melted.
Andres Reiner: Then came the unexpected and unthinkable. Instead of releasing the ship, this melting ice crushed it.
Andres Reiner: The entire crew was stranded thousands of miles from civilization. The new goal became survival. Since we last met in person at Outperform 2019, businesses everywhere, from restaurants to global conglomerates, had to throw out carefully laid out plans to create new goals, all in the name of survival. Some struggled to survive, while others adapted and did better than expected. As we emerge from the pandemic, we may think the ice is finally melting, but more change is coming and more disruption is inevitable. What would this look like and what will it mean for business? We don't know. So how do we make sure that no matter what comes our way, we cannot not only survive, but outperform? This is what I wanna explore with you today.
Andres Reiner: If we look at what's happening in the world, here's what we do know. We can see three clear megatrends. The first megatrend is business uncertainty. Business uncertainty is here to stay because everything is constantly changing. Cost, currency, supply chains, prices and customer demand patterns. In response, businesses are constantly changing what they sell, how they sell, how they package, and how they price. Not only that, but things are also changing much faster because we're all digitally connected. Today, new ideas travel instantaneously and everywhere, because innovators in all industries around the world are communicating and collaborating using real-time technology. The only way to consistently outperform in this business climate is to innovate as fast as things change in real-time.
Andres Reiner: This brings us to the second megatrend. No matter what the business climate is, customers always expect more. Innovation is happening so fast that every time we turn around, there's another magical new experience or product that makes life easier or more enjoyable or more fulfilling. A magical experience makes it easy to find exactly what you want or it gives you a recommendation that you trust. The most magical experiences surprise us with something we never knew we needed, and deliver it to a level we never anticipated. But once we have an experience so magical that we can't imagine living life without it, we want that same magical experience everywhere.
Andres Reiner: Whether I'm booking a vacation for my family or buying something for my business, I expect the experience to be instant, end-to-end, personalized and self-serve, because that's what I get every day from companies like Amazon, Netflix, Uber, and so on. And the most innovative companies will continuously evolve what end-to-end means. Take Uber, they started as a taxi service for people, then pets. Then they added food delivery with Uber Eats. Now they even deliver food directly to your seat at a stadium. They're also launching a new air taxi service and a new airline booking app. That is the perfect example of innovating on the end-to-end customer experience. The bottom line is that, as innovators, you not only have to perform to your highest level, but you must also outperform everyone else's highest level, even if they're in a completely different industry.
Andres Reiner: I wanna challenge everyone here not to constrain yourself to selling skews or selling a seat that gets someone from point A to point B. Think beyond your industry. Start dreaming about what's possible if you leverage patterns from other industries to create magical end-to-end customer experiences, because in the end, people are not loyal to your brand. They are loyal to the last best experience you gave them. Customers will always gravitate towards whatever offers them more convenience, confidence, and certainty.
Andres Reiner: This brings us to the final megatrend, the evolution of work. If we wanna do business in real-time, and deliver for customers who always want more, then we have to change the way we work. This evolution is not about whether people work at home or in the office. It's about how people work most effectively so that they can achieve the full potential. When business process are manual, and digital tools are not connected, we end up spending more time on process than we spend with customers, and nobody wants that. Besides, in an era that requires real-time business, people who work manually won't be able to keep up with people who use automation. Think about it. That's like entering a Formula One race with a bicycle.
Andres Reiner: If you want your employees to respond at a moment's notice to changes in the business climate and shifts in customer demand, they need instant end-to-end self-service, digital experience powered by AI. This is the only way they can outperform. Together, all of these forces threaten to disrupt your business. In fact, we now live in an era of real-time business. This means that real-time disruption is a constant threat. The only way to consistently outperform is to continuously undisrupt your own business. And the only way to do this is to embrace digitization, automation and AI.
Andres Reiner: Airlines have been investing in their mobile experiences, and we've all seen massive improvements for customers. Today, if I book a flight and it's interrupted, the app can suggest alternate flights and I can rebook it instantly on my phone. That's very powerful, but it's just the beginning. Think about the other possibilities. What about my hotel? What about my rental car, or other reservations? What about my daughters who are traveling on reward tickets on a separate reservation? Those changes should be just as automatic, easy and instantaneous. When it comes to B2B selling experiences, buyers do not want a long complicated purchasing process. They want consumer-like experiences, and studies show that they will pay more for real-time experiences. We know also that the first to quote usually wins, and phone calls and spreadsheets won't get you there.
Andres Reiner: But you can make your business undisruptable with a unified platform that helps you continuously learn through AI so you can become a real-time business. At the heart of the PROS platform is our AI. Our AI algorithms have been trained across industries to drive immense value for you. We have AI algorithms that predict demand, optimized supply chains, drive customer cross-sell and upsell recommendations, detect customer attrition, and predict customer willingness to pay, among many others.
Andres Reiner: We are now processing 5.9 million transactions per minute with platform uptime of 99.97%. That's 3 trillion transactions per year. To put this in perspective, that's more than two and a half times the New York Stock Trading Volume. PROS mission is to help people and companies outperform. We're using AI to live up to that mission. Later today, Forrester Consulting will share amazing results from interviews from PROS customers that independently validate the real and significant ROI we generate as part of our commitment to all of you. Now, I'd like to invite some of my team on stage to show you the power of PROS.
Andres Reiner: Welcome, Kaavya. She's gonna come up. Kaavya leads our innovation on B2B AI price optimization, and today she's gonna show you our recently launched Gen IV AI, which provides the best predictions we've ever generated. Welcome, Kaavya. Gen IV AI is transformational for a couple of reasons. You can activate it in weeks. It drives great predictions even with sparse datasets, and it continuously adapts to market volatility. Kaavya, on to you.
Kaavya Muralidhar: Thank you, Andres. Today, we are incredibly excited to announce the most advanced price optimization solution in the world, PROS' fourth generation of AI. With PROS Gen IV AI, we've taken some of our recent advances in artificial intelligence around the world and customized it to solve the most challenging problems in pricing.
Kaavya Muralidhar: We are incredibly excited about AI, and we think you should be too. One, because of its incredibly sophisticated artificial intelligence algorithm, but also because if you are a current customer of Smart Price optimization, you are entitled to our fourth generation of AI. With Gen IV AI, we are moving beyond a segmentation based approach to using neural networks, which means, it is not only easier to implement, but also it means that we are able to overcome significant challenges that the industry has seen using segmentation for the last several decades. We are able to overcome challenges of sparsity, of overcoming pricing during volatile or inflationary conditions, as well as being able to just provide the most personalized price for every buying interaction.
Kaavya Muralidhar: When we have researched and previewed Gen IV with some of our trusted customers, we found that there was not only a huge quantitative improvement of an order of magnitude in the prediction accuracy, but also, that it really was able to pick up on key aspects of the business, such as how to change prices when you are in a significantly unprecedented inflationary period, like we saw in the last year, or how to price something... How to price the product that you've never sold to a certain customer under a certain condition before, and still provide the right price and the fair price for that interaction. Finally, we've seen huge strides in explainability and being able to justify a price. How do you understand what's going on in your pricing, and how can you explain that to somebody who isn't familiar with AI?
Kaavya Muralidhar: So I'm very excited today to jump into a live demo of Gen IV AI. So when you run your data through Gen IV AI, what we are doing is analyzing your historical transaction data to do something that is incredibly hard for any human or even a team of people to do, which is analyze millions and millions of data, for those who have a very large database, understand the insights and analytics and knowledge that you can glean from that data, and apply that towards strategic pricing action that you can take across your business in order to gain your opportunity. So with Gen IV, we actually see that you're able to get a total uplift of your business and this shows you, by analyzing your data, what is available in the next period of time, given the areas that you may have been underpricing or the areas that you may not have been capitalizing upon the revenue because it's really hard to know how a customer values your products.
Kaavya Muralidhar: We also are able to show further details to understand where that uplift is coming from. So for example, this is a way to look at the idea that uplift doesn't come from uniformly changing all prices in one direction and the same way. It actually comes from looking at every transaction individually as a unique entity, understanding what attributes make that transaction what it is, and providing targeted pricing action towards those. So a lot of uplift actually comes from pretty small price changes.
Kaavya Muralidhar: Something that we hold as an imperative at PROS and is a huge priority for us in the field of AI is explainability and being able to help our customers actually adopt the prices coming from AI. And the way we think about explainability is being able to answer a few core questions. The first is what I just showed you. What is the opportunity available to me that helps me justify this change in my pricing behavior? But the second is a much more detailed question, which is, how do I justify and explain an individual recommendation from the AI system?
Kaavya Muralidhar: So, let's go through an example. If I'm pricing an XPS Core laptop and I have a certain customer that I'm selling it to, the customer is based in Europe, I have the product attributes of the laptop that I'm selling as well as the attributes of the customer that I'm selling to, where they're located, what kind of customer they are, how much they bought from me before and so on. With Gen IV, all you have to do is click on 'Give me a Recommendation' and in just a few seconds, you get a detailed view into what makes this transaction what it is.
Kaavya Muralidhar: So you're going to see not just a floor target expert as we see over here, which is the pricing envelope for the sale, but if you want to go deeper, you get a detailed impact analysis of the different price points that you could price at, what the risk of and win probability is at each of those price points, and why the Gen IV AI is recommending you to price a target where you have the highest margin when you've accounted for that risk. While the AI has a recommendation, we are incredibly transparent with this information for every transaction, so you have the tools to make your own decision being armed with the additional insights that we see here.
Kaavya Muralidhar: Something that is incredibly challenging for a lot of businesses is understanding the value drivers behind their price, especially when those value drivers can be different for every product, for every customer, for every industry, and for every region. What is it that makes your price what it is and how do you know how your customer really values this product under these conditions? With Gen IV, we provide a detailed value driver analysis for every transaction. So this starts at a product baseline, and you can see that every attribute that I entered into my search has either an increase or decrease in how it affects the final price, and you get a detailed understanding of what makes this price what it is.
Kaavya Muralidhar: The beautiful thing is that this value driver chart isn't going to look the same when you look up a different transaction. If you change the customer, if you change the geography, if you change the color of the laptop, these are going to look a little bit different because a different customer may value an entirely different set of attributes, or in a different geography, your pricing practices may look very different. Being able to understand what drives value in your business at this level is something that a lot of companies work with consultants for to do a conjoint analysis for months or years just for a few products. But with Gen IV, you get this out of the box, both at individual transaction levels as well as at aggregate levels.
Kaavya Muralidhar: Another part of explainability in Gen IV, and in the PROS platform in general, is thinking about how we can actually use AI to help you interact with the system in the most natural, intuitive, and human-friendly way. I know a lot of you have been to Dr. Michael Wu's talk yesterday, so you may be familiar with some of these terms. But at PROS, we see generative and predictive AI as complementary to each other, strengthening each other to come up with the most optimal solution. And at PROS, we've put this into practice through a really easy way for you to self-serve on our platform. So let me show you what that looks like.
Kaavya Muralidhar: Up here, I've opened up a link, and this is going to lead you to an AI-based chatbot that was developed in partnership with Microsoft OpenAI that helps our users understand how to interact with our product, be able to ask any question in the same form that you would ask another person, and get back an answer in real time. So let me show you what this looks like. I'm gonna open another tab where I have that open and type in a question.
Kaavya Muralidhar: I am also going to filter by the specific product that I'm asking about on the PROS platform. So here I've asked if it's possible to exclude some data from my analysis. So imagine I'm a live customer. I've found out that some data that I have in my system is data that I actually don't wanna include, and I want a self-service way to remove that data from my system. I immediately get back this answer that not only has step-by-step instructions for how to do so, but a link to and citations to further product documentation that I can look up. Here's an example of a different question. I usually use a Mac, so I'm slow on the Windows keyboard. We got there in the end. So here I've asked a different question, which is, how do I export my results? And again, I get a pretty detailed answer, complete with exactly where to do it, as well as a link to more detailed product documentation if I wanna configure this further.
Kaavya Muralidhar: If you are excited by any of the AI that I shared with you today, I have two calls to action for you. One, please come talk to us at our booths at the innovation center, I'll be standing at the Smart Price Optimization and Management booth. And all of my colleagues here will be incredibly excited to have a chat with you, answer any questions and demo more of these capabilities. And second, please attend my session later today where I'll be presenting with my colleague, Eldho Kuriakose, a deep dive about the Gen IV AI science, how it works. We'll do a more detailed demo and we'll have a live Q&A. So please bring your questions there. Thank you, Andres.
Andres Reiner: Thank you, Kaavya.
Andres Reiner: So this technology is available today, as Kaavya said, and you can activate it today and be up and running in less than two weeks. Now, I wanna bring up on stage Justin. Justin is leading innovation in travel revenue management. He's gonna show you one of our newest AI innovations, which is dynamic pricing of ancillaries. This is one of the fastest growing businesses for airlines and a key opportunity for expanding the customer experience. Justin, you want to tell us all about it?
Justin Jander: Yeah, definitely. So thank you Andres. And as Andres said, it's tough to follow first off Kaavya's demo, but I'm gonna do my best to show what I have to show today. We're gonna be talking about ancillaries, and so you've probably heard of ancillaries. Most of you flew here today, and when you're going through the booking process, you were offered something extra to buy, and that's really what the ancillary concept is for airlines. Now, there's a lot of opportunity there. I wanna first start with, what is an ancillary? So when we think of what an ancillary is, it's really anything that you can buy before, during, or after the flight.
Justin Jander: So before the flight, that's the obvious things like seats and bags. It's also things during the flight like fast track security or lounge access or drinks on board. And then after the flight, it's things like hotels and car rentals, think ground transportation. But it really doesn't have to stop there. As airlines become more retailers, they're starting to look for the things beyond the obvious things that they offer during the booking process and onboard and after the flight. And so that can be something like, think of you're booking a beach destination, and you have the opportunity and you want to have sunscreen sent to the beach where you're going, you wanna have sunglasses sent, and you wanna have a swimsuit sent to the beach.
Justin Jander: Those are all ancillaries as the airline is becoming a retailer. Or it could be that you're going on a business trip and you were thinking, well, I need my lucky pair of socks sent automatically there, and you're a huge airline geek, so you got to have your airline socks ready to go, and so you have those sent. So really, as the airline is thinking of themselves more as a retailer, they're starting to think beyond just the things that you think of as ancillaries.
Justin Jander: Now, the opportunity there, why this matters to the airline, of course, as many of you are airlines in the room, the obvious answer is revenue. So you wanna make more money and the opportunity is there. Just this morning, I read an article that said that $4.2 billion is attributed just to seat selection for eight US airlines. Just the domestic seat selection on eight US airlines is $4.2 billion. And yes, this morning I was reading about ancillary revenue before this talk. So, really you can see the revenue opportunities there, but it actually doesn't stop there.
So many of you are airlines, obviously the revenue part matters to you, but as travelers, it's also important, because you get the opportunity to see what matters to you and present it with the information that matters most to you. So really, instead of just offering you bags and seats selection, now it could say, well, what matters to you as the traveler? How do we make sure your experience is complete across the board? And so ancillaries are a way to do that by offering you the complete travel experience across all of the different opportunities that you have to talk to the airline. So they really wanna understand as much about you as possible.
Justin Jander: So how does PROS help with this? So from PROS perspective, we see there's three key areas to work from; ranking ancillaries, so that's how they're displayed to you when you go to the airlines website, bundling ancillaries, so that means grouping them together by common themes, so things that matter most to you, and then the pricing of ancillaries. Now, you may think pricing of ancillaries just matters for the people, the airline folks in the room who wanna make more money, but it also matters to you as the traveler, because you wanna get the best price. So we're looking to capture your willingness to pay by understanding what your attributes are.
Justin Jander: So how does PROS actually help with that? So, of course, the theme of today's entire discussion is, of course AI. So if I came out here and told you it was a random number generator, that would be a surprise, right? But the fact that it's AI is not a surprise 'cause that's why we're here today. And indeed it is, and in fact, it's a reinforcement learning model that we have in the system, and why that's important is two aspects of it. One is segmentation. That's truly starting to understand who your passengers are. By understanding who the passenger is, you can make different and better decisions about what to offer that passenger, again, completing that travel experience.
Justin Jander: And the second point is the reinforcement learning idea. With reinforcement learning, what we're talking about is really starting to say, "How do I understand what's happening in the market?" Introduce prices, introduce options to the passenger, learn from those experiences and then continue to evolve and learn from that and understand what the right price is, settle on that optimal price that makes the most sense for that passenger. So that's the reinforcement learning part.
Justin Jander: Now, the most important part is the demo today. I talked a lot and you probably wanna see a demo.
Andres Reiner: Yeah, we wanna see a demo, definitely.
Justin Jander: So, what I'm gonna do is switch over to my demo. And so here, this looks like an internet booking engine, of airline.com website, and this is a demo environment that we use for our shopping pricing and merchandising tool. Now, the interface here looks like the similar booking pattern that you would go through on any airline's website, but the focus here is actually about what's happening underneath, what's powering this. So I've heard that Lisbon is nice in the summer, so I'm gonna take a trip from JFK to Lisbon, and I'm gonna go on June 22nd. And so I start the process here, and I'm gonna take a one-way trip, I guess I'm not gonna come back, but we'll start the trip here. So this part doesn't... For this purpose of the demo, this part doesn't necessarily matter as much as the flight selection part. Luckily, there's only one flight to choose from, so I'm gonna select that flight.
Justin Jander: And you didn't come here today to watch me type in who I am, so my team had conveniently has an auto-fill button that makes it so you don't have to watch me type, and now we get to the seat selection page. So all of you have seen a seat selection page and you see something similar to this set up here. And when we look at this set up, the key is, is normally you have these different options and their prices that are fixed here. Our dynamic pricing of ancillaries capability is really designed determining ancillary price here that's based off of the passenger's willingness to pay. So the base price for an economy comfort seat is $25 in this environment, and this is real data that's powering this, and this is actually the dynamic pricing of ancillary tool that's driving this.
Justin Jander: So based off of the passenger segmentation, which includes the day of week that I'm traveling, the market that I'm traveling to, it's suggesting that the right price for me is €26.25. So that's the dynamic price, but it doesn't stop there. You can also see here, for this particular seat, the normal price is €20, it's down to €16.6. And if I go over here to the window seat, normally it's €16, now it's €12.8. So you can see that the price is changing based off of who I am. But now, that in and of itself is dynamic, the term dynamic, of course, means changing, so it's changing the price based off of the characteristics of the passenger. But it doesn't stop there. Let's go back and take another look.
Justin Jander: Let's say, for some reason, I thought it was a good idea to take my 2-year-old daughter on a Trans-Atlantic flight of six hours. If you have a 2-year-old, you might understand why that's a terrible idea. So I've chosen here with one child, and I'm gonna go a day later as well, so now I've changed my passenger segment. So I'm gonna quickly go through this and we enter in the details again. Believe it or not, my daughter's name is not John Doe, but that's still what it says. So we get to the seat map here, and when I click here, you can see that actually now the price is lower. So I changed the segmentation, I changed who the passenger is and changed the number of passengers.
Justin Jander: So before, it could have thought I was a business traveler, and so it increased the price of seat selection. Now, it recognizes I'm taking someone less than 15 years old, so it's reduced the price based off of my segmentation. And it doesn't stop there, it also can go to additional ancillary as well, whether it be baggage or all the different ancillary you can think of. The one I like to highlight is perhaps whether your traveling with that 2-year-old, the bottle of champagne be a little more expensive after they get done with the flight because you've been traveling with a 2-year-old.
Justin Jander: But you can see the different options you have and all of these ancillaries are possible to be dynamically priced. And really, the power here... Of course, this is a workflow that you've gone through any time you've booked a flight, but the power here is what's underneath. The AI that drove the price that you see on the screen is really powerful about understanding who the passenger is and ensuring that you get a price that you're willing to pay, that both focuses on the airlines, maximizing the airline's willingness to pay, revenue, but also maximizing your travel experience, giving you what you want for a price that you're willing to pay.
Justin Jander: So obviously, I'm very excited about this, that's not a surprise, and we have a lot of opportunities this week to hear about more of this. Particularly today, Paul Hohler will be talking about this at 4:30 today in AGIT, the room AGIT. He'll be talking more details about the science and the model that were used for dynamic pricing of ancillaries. So if you're interested, stop by, and of course, we're at the innovation booth all week. So, thank you, Andres.
Andres Reiner: Thank you, Justin.
Andres Reiner: I wanna thank both Kaavya and Justin for their amazing demos and for their passion to help our customers out perform. I've always said what makes PROS so special is our people and our customers. And I'd say Kaavya and Justin are a great example of our people. And now, I wanna introduce and invite on stage two of our amazing customers. Anu Varma, CEO of Communication Solutions at TE Connectivity, and Abhi Shah, President of Azul Linhas Aéreas.
Andres Reiner: Welcome, Anu and Abhi.
Andres Reiner: It's wonderful to have you all here. Thank you always to be able to come here and share your learnings with our team. I wanted to spend a little bit time in getting to know each of you and your company, so maybe Anu, why don't we start with you?
Anu Varma: Yeah. So, TE Connectivity, we're not a known brand, but most of you probably have our products somewhere in your world, in something that you own. We make connectors, sensors, and high speed cables for 10 different vertical markets, very distinct markets with 10 BUs globally in 160 countries. And we say that we're in harsh environments, so you'll see our connectors and cables in cars, really growing market with electric vehicles. We also are in space, SpaceX is a customer of ours. We're in the body. So if you go in for a medical procedure where you have a scope or something, usually the connectivity for that is coming from our business unit. And we're even in the large cloud customers. Microsoft is a customer of ours and we provide high-speed cables and connectivity for these large data centers. A very exciting, very diverse business and a ton of innovation.
Andres Reiner: Yeah, I was blown away by the 236 billion products that you've produced. It's amazing. Abhi, I wanted to go ahead and give you the opportunity to talk a little bit about your business as well and yourself.
Abhi Shah: Thanks, Andreas, for having me, and thanks to PROS as well, I see Claudia here on my team. But yeah, we're a Brazilian airline. We're 15 years old. We'll do about 32 million passengers this year, 175-ish airplanes. Lots of ups and downs in Brazil, lots of challenges, but lots of opportunities as well. And if you Google TripAdvisor, World's Best Airlines, the last time they gave the award, Azul was voted the world's best airlines. We're very proud of that.
Andres Reiner: That's awesome. Congratulations.
Andres Reiner: So, I wanted to start a little bit with the theme of today and talk a little bit about what forces are really disrupting your business and start with that. And maybe Abhi, we could start with you.
Abhi Shah: Yeah, absolutely. So, pandemic obviously changed everything, from customer demand patterns to running an operation. Who remembers... Who's looking forward to traveling to Europe this summer with the operational challenges? And exactly what you said, I have two examples, talking about digital, talking about AI, where you really have to constantly innovate and think about doing things differently that frankly airlines have been doing for 50 years, 100 years. So, who here enjoys the airline boarding process? Does anybody enjoy it? Do you know if it's Group 3 or Group 23? Does it make any sense to anyone? But it hasn't changed, it literally hasn't changed.
Andres Reiner: Yeah. We were gonna talk about that a little bit later.
Abhi Shah: It's crazy. So we implemented this thing called, we call it the Blue Carpet, where we have projectors on top, on the ceiling, and we project down a digital moving walkway. So, instead of yelling out Group 1, Group 3, it just says 15A, and if you happen to be in 15A, you just follow it and off you go. And then 31D, you follow it and off you go. And then you can program it to do the most optimal or try to do it the most optimal possible. It was digital, as you said. Staff, we don't have staff. We have to be more efficient as an airline. And it's something that's intrinsically a very offline physical process, and we've digitized it to remove the stress from the boarding process.
Andres Reiner: That's awesome.
Abhi Shah: Another example is AI. So, airplanes come into the gate, like 50 vehicles come around it, they do stuff, and then half an hour later, the airplane goes away. But what's actually happening? So, in our hubs at every gate, we have two cameras that are watching the operation, and there's AI that's learned the operation. So it knows when the marshaler is on time or not, when the jet bridge has connected or not, when the fueling truck has arrived or not. So, in real-time, we know gate C15, the fuel truck is three minutes late, so as a result, that plane is probably gonna be late, or somebody do something about it. And then in the future, you can maybe advise Anu here, "I'm sorry your flight's late because the fuel truck showed up late." And so, you talk about uncertainty businesses, airlines have to be more efficient, and so digitization is huge. Using AI tools is absolutely huge to make sure that we're finding different ways to do things.
Andres Reiner: That's great, Abhi. Anu tell us...
Anu Varma: I'm waiting for that text.
Abhi Shah: Yes.
Andres Reiner: Yeah, we are waiting. What forces are disrupting your business? Can we talk...
Anu Varma: Pandemic. Supply chain definitely has been issue, then the inflationary. I think what's important for us is volatility is here to stay. These long cycles that we had for economic cycles, they seem to be shorter and shorter, and volatility is here to stay. So similarly, what are our leading indicators? We're doing a lot of things around predicting, where's the market going? Can we predict using macroeconomic indicators, to predict the volatility? And then on the other side of it is then once you know something is happening, how do you react to that? How do you pull the right levers? Maybe there's an inventory buildup happening through a channel. I need to start thinking about my inventory. Maybe the housing market is going down. My appliances business, maybe, is going to see a slowdown. I really need to think about that, or it's going up.
Anu Varma: During the pandemic, we were all sitting at home remodeling our homes and our appliances business had a huge surge. And we didn't really see that coming 'cause we didn't expect that everybody would be stuck at home for so long. How do you take those surges and those down cycles and do the visibility as leading indicators, and then all of the levers that you need to pull on the other side of it? And I think one of the important things for us is we have 80,000 employees across the company, greatest employees ever. They work their tails off to do everything, but they cannot manage to do that at the scale that we have to do that using Excel. The second ERP, Excel. And they can't continue to do it, it can't be human-powered.
Anu Varma: So we have to do something for our employees, and this is where we're really focused on a digital supply chain transformation. So those levers are, "Here's where you're at in real time. You can start pulling those levers globally." And then also in pricing, how do we get... Because of the volatility, we went from high inflation to maybe demand going down, and some business units are going crazy on demand, other ones are not. How do you get that flexibility? And this is one of the reasons that we're looking at PROS, is we need that tools. We can't do this human-powered anymore.
Andres Reiner: That's great. And Abhi, tell us a little bit about things that you're doing to undisrupt and how is PROS helping you?
Abhi Shah: Yeah. So, for us PROS has been really instrumental for scale, scaling up. So, our revenue in the first quarter of this year was 76% higher than the first quarter of 2019.
Andres Reiner: That's amazing.
Abhi Shah: So, we are today a significantly bigger company in terms of revenue, but Claudia's pricing team...
Andres Reiner: Congratulations.
Abhi Shah: Is not 76% bigger, and it's not going to be. And so...
Andres Reiner: You have an amazing team.
Abhi Shah: Yeah, we do. So, we still have 158 cities, and so we have something like, I don't know, 15,000 O&Ds, which is, that scale is... And we're a medium-size airline, to be honest. If you look globally, we're a medium-sized airline. And so, PROS has really helped us at that scale. And so today, using the PROS O&D system, we are planning further out than ever. And the team is really focusing on what's important, whether it's events and things like that. So, we've never planned further out trying to capture the booking curve because demand is uncertain, and so you wanna be, as you said in your presentation, the first quote usually wins.
Abhi Shah: So, if you are out there already, if we've properly allocated revenue for September, October, July, whatever it is, as opposed to our competition that's just guessing at this point, then we're gonna get that sale. So, we're planning further out more than ever and we've structurally transformed this side of the business so that it can scale. We expect next year something like 25 airplanes. Hopefully, we'll get them all, and we are a very connected airline as well. So having that scale, for us, is critical.
Andres Reiner: Thank you, Abhi. And Anu, tell us a little bit about what you're doing to undisrupt and how is PROS supporting you?
Anu Varma: Yeah, so obviously going through the digital transformation. And one of the taglines I use in our business all the time, one of our customers is AWS and Amazon, of course, and I always say, "How do we give Amazon the Amazon experience?" It's the experience that we're all used to at home, how do we give that to our customers? PROS, for us, we're live on guidance right now and we're evaluating the CPQ tool. Similar to Abhi, I think it's a scale thing for us. You see the volume of products that we have, but I'm mostly excited about the AI.
Anu Varma: I really am excited about the guidance tool and sort of the opportunity for the internal market analysis, where, again, we have 10 different vertical markets and some of our products sell at a higher price than some markets versus in other markets. And having that AI-driven guidance that's recommending that to us, I think is extremely powerful. And then you're really pricing based on what the customer values, and that's exciting to me. But also it's the scale. How often can we not have to have a pricing agent having to touch something? How often can we just go to the market, get the self-service right and then speak...
Andres Reiner: Yeah, we think, the opportunity to us is really important, and I talk about this, the digitization component, the automation and the AI and having all three together. 'Cause, really, it's about creating those quotes that you can move to a self-serve channel, that are powered with the right intelligence and the right guidance that adapts to your vast number of products and vast number of markets. Because the first to win is important, but you have to have the right price. You have to have a market-oriented price to drive that success, and I think y'all have been doing that very well.
Anu Varma: Yeah, and yesterday I sat through the Customer Advisory Board, and I know Sunil is doing a presentation later on this new interactive tool where you could work with your customers, but we may actually even use that internally, and that's exciting.
Andres Reiner: Yeah, we're seeing the evolution as digitization continues is how do we take the quote... How do we take all parts that are manual or document-oriented and move them to digital experiences? 'Cause I thought about that theme, that's important for your customers and your employees. Your employees also want a digital experience. So how can we have them interact with a quote now in a digital way between a buyer and a seller? And eventually, how can you have an AI-based bot that can help support that initiative so a rep can actually cover more opportunities and more accounts? And that's how... 'Cause every business, we're trying to drive efficiencies as we're growing, and I think automation is a key component of how we're driving that success. But it's great to hear from both of y'all. We're super proud to be able to innovate with both of you, and I wanna thank you for being here on stage. I wanna have everyone thank Anu and Abhi.
Anu Varma: Thank you. Thanks for having us.
Andres Reiner: It's a pleasure. We are extremely proud to be able to partner with Anu and Abhi, and very grateful to be able to innovate with them. Anu and Abhi have incredible sessions at this event, and I highly encourage you to attend to learn more from them. So, you're probably wondering now, what happened to Ernest Shackleton? So, he set out to achieve the unachievable. And unforeseeable obstacles, continuously disrupted his expedition. Yet with each new challenge, he rallied his crew around a new goal. That is with every disruption, they undisrupted right back. When their ships sank, they walked across the ice with whatever they could carry. When their crew became too weak to move, Shackleton rode a lifeboat for 930 miles to get help. When they finally landed on the wrong side of the island, they climbed a mountain range for 36 hours. Ernest Shackleton and his crew used every last drop of their human ingenuity to achieve the unachievable, because that's what they had to do to survive and outperform their circumstances.
Andres Reiner: In the end, every single member of the Endurance Crew survived against impossible odds, all of them. In this era of incredible uncertainty, businesses need every last drop of human ingenuity to undisrupt, innovate, and outperform. And that's exactly what digitization, automation, and AI gives us. An algorithmic way to record, transcribe, and share human ingenuity so that everyone can apply everyone's human ingenuity to whatever challenge comes next. This is what it takes to be an undisrupter. My challenge to each of you is to go undisrupt your business. Thank you.