|Who Says Innovation Has to Happen in a Garage?|
By Yeoh Siew Hoon
Monday, 23rd April 2012
Even though he himself developed his idea in one, Dr Ravi Mehrotra, president and co-founder of revenue solutions company IDeaS, believes it’s a myth that innovation can only happen in a garage.
A passionate mathematician, his logic is – “one in 1,000 people are innovative. If you have an organization of 10,000 people, you’re bound to have more innovators than if you have 3 people working in a garage.”
In fact, Dr Ravi (right), who holds more than one dozen patents, believes the best innovation is yet to come for IDeaS to truly solve the problem of “how do you understand demand as a function of price in a stochastic environment”.
The India-born professor, who was instrumental in leading the company to its acquisition by SAS, says he’s now like a kid in a candy store with full access to resources, “tools that have been tested and perfected over time”, to “build the house that I want”.
And the house he wants to build is an enterprise solution that will crack the pricing problem for hospitality – how what you charge at a restaurant impacts on rooms, and what effect does selling function space have on room revenues, and so on.
“They are all inter-related – spa, ballroom, rooms, restaurants, car park. We want to find the right relationship between all these things that will make a hotel stand out against its competitors in whatever measure it wants – whether it’s profitability or market share.”
To Dr Ravi, revenue management is about increasing profitability while managing risks associated with the uncertain nature of demand. He co-founded IDeaS in 1989 as part of his ambition to develop practical solutions to difficult decision problems.
“Research shows that 40% of executives make decisions based on gut rather than analytics or science.”
And as Google changed search and Facebook social media, he says IDeaS changed the way hotels looked at Bid Rates and opportunity cost. “It didn’t exist before in distribution systems. Our customers, groups like Shangri-La and Hilton, had to force PMS vendors and GDS to build these factors into their system, and now it’s an industry standard.”