{"id":110207,"date":"2023-08-14T08:00:00","date_gmt":"2023-08-14T15:00:00","guid":{"rendered":"https:\/\/www.microsoft.com\/en-us\/industry\/blog\/?p=110207"},"modified":"2024-07-25T13:50:10","modified_gmt":"2024-07-25T20:50:10","slug":"generative-ai-will-revolutionize-revenue-growth-management","status":"publish","type":"post","link":"https:\/\/www.microsoft.com\/en-us\/industry\/blog\/retail\/2023\/08\/14\/generative-ai-will-revolutionize-revenue-growth-management\/","title":{"rendered":"Generative AI will revolutionize Revenue Growth Management"},"content":{"rendered":"\n

This blog will give you an overview and a solid foundation for Revenue Growth Management (RGM). In addition, we will show you how to strategically embed generative AI to drive stronger RGM outcomes.<\/p>\n\n\n\n

Revenue Growth Management is critical for revenue and profitability growth<\/h3>\n\n\n\n

Let\u2019s start at the beginning. RGM is a cross-functional discipline within the Consumer-Packaged Goods (CPG) industry that uses advanced analytics to identify and analyze how to increase profits and find top-line growth opportunities. In a highly inflationary market that also experiences fast-changing consumer preferences, RGM has become a high-priority topic in most CPG organizations.<\/p>\n\n\n\n

We have a bold prediction. Generative AI will give more employees access to RGM tools and insights, as well as provide a path to help companies leap from their current level to higher levels of maturity. We call this RGM democratization, and it has incredible potential.<\/p>\n\n\n\n

Generative AI can address and solve some of the data, tool, and adoption challenges experienced today.<\/p>\n\n\n\n

One of the largest pain points of RGM has been the speed and accuracy of insights, due to the sheer volume, complexity, and messiness of data that serve as the foundation of this discipline. <\/p>\n\n\n\n

Microsoft is a trusted technology provider<\/a> for many of the world\u2019s largest CPG companies. We partner with our customers across a myriad of digital transformations. Through these experiences, we distilled the following observation of the RGM and data maturity journey for most CPGs.   <\/p>\n\n\n\n

Introducing the Revenue Growth Management Maturity Scale<\/h3>\n\n\n\n
\"Revenue<\/a><\/figure>\n\n\n\n

Let\u2019s spend some time with this chart.<\/p>\n\n\n\n

At the bottom of the chart, we have the data foundations, which are essential throughout the RGM Maturity Scale. Initially, RGM projects are often one-off endeavors that involve collecting, processing, and integrating data from various sources\u2014which can be time-consuming and challenging. The first step to take in establishing RGM maturity is to establish an RGM data hub (RGM Data Hub 1.0) and implement robust data governance practices, data cataloging, and ensure data quality and trust. The RGM data hub is then expanded by incorporating additional data sources and adopting a common data model (RGM Data Hub 2.0). The more the RGM data hub can connect with other data hubs through a connected data platform, the more value can be derived (RGM Data Hub 3.0).<\/p>\n\n\n\n

RGM 1.0 represents the initial generation of RGM tools, which primarily focus on descriptive analysis of individual factors and often overlook other business drivers. These tools suffer from data latency, provide insights based on past events, have suboptimal user interfaces, and face low adoption rates.<\/p>\n\n\n\n

As RGM capabilities mature, tools need to become more predictive and customized. To unlock the full potential of RGM tools, it is crucial to integrate them with planning and demand systems, and the underlying datasets must be near-real-time and more detailed (RGM 2.0).<\/p>\n\n\n\n

The ultimate goal is to create an interconnected RGM system that seamlessly integrates with store-level operations at the front end, as well as the supply chain and manufacturing processes at the back end (RGM 3.0). This level of integration can only be achieved if the data foundation also evolves (RGM Data Hub 3.0) and incorporates more detailed data.<\/p>\n\n\n\n

Regardless of the stage in the RGM journey, prioritizing the democratization of RGM tools is essential. Leveraging generative AI, design thinking, cross-functional decision platforms, and effective change management practices are key factors in democratizing these tools. We will be exploring the role of generative AI in democratizing RGM tools.<\/p>\n\n\n\n

Generative AI is already changing how we work\u2014making us more effective and efficient<\/h3>\n\n\n\n

Now, let\u2019s discuss what generative AI is, and what it can do. Generative AI refers to a category of AI techniques and models that are designed to generate new, original content rather than simply recognizing or analyzing existing data.<\/p>\n\n\n\n

Generative AI is revolutionary because it can generate the next word, an answer to a question, an effect from a cause, or a visual from a prompt, amongst many use cases. Our customers can use generative AI models with their own enterprise databases. This is unique to our Microsoft Azure OpenAI services, in addition to having the security and governance that come with a Microsoft platform.<\/p>\n\n\n\n

There are four key capabilities of Azure OpenAI Services: <\/p>\n\n\n\n

    \n
  1. Summarization of insights or scenarios<\/li>\n\n\n\n
  2. Semantic search for knowledge mining<\/li>\n\n\n\n
  3. Code generation<\/li>\n\n\n\n
  4. Content generation<\/li>\n<\/ol>\n\n\n\n

    To learn more, please visit our Azure OpenAI Service<\/a> website.<\/p>\n\n\n\n

    Generative AI can help companies achieve RGM maturity faster and better<\/h3>\n\n\n\n

    Companies that use generative AI can leapfrog RGM maturity. The path no longer needs to be strictly sequential or linear. So, you might ask, what does that mean? This next section gets into more depth and details of generative AI.<\/p>\n\n\n\n

    RGM with a generative AI model can be enhanced through your own enterprise data and prompt engineering <\/h4>\n\n\n\n

    A powerful way to apply generative AI for RGM is by bringing your own enterprise data and applying prompt engineering to augment the generative-pre-trained (GPT) models. Prompt engineering\u2014also known as prompt design\u2014involves selecting the right words, phrases, symbols, and formats that guide the model in generating high-quality and relevant texts. This involves transferring and enhancing learning with new data. <\/p>\n\n\n\n

    Let\u2019s understand how this works: <\/p>\n\n\n\n