During our recent Building AI-Enabled Pricing Operations training session, I went off on a bit of a rant about how there’s still too many executive teams insisting that every function in their company needs to develop an “AI strategy.”
You probably recognize the drill…
AI is the future! Everyone’s talking about it! It’s going to change everything! We need to get ahead of it! Every department needs to figure out how to leverage AI to the fullest! So…by the end of the quarter, we want every team to submit their AI strategy for review!
Gee, that all sounds forward-thinking and strategic, doesn’t it?
Well…I think it’s pretty silly. And shortsighted. And even counterproductive.
Think about it this way…
Imagine your CEO announcing that every department needs to develop a Microsoft Office strategy by the end of the quarter. Everyone needs to identify at least ten uses cases for Microsoft Office and submit a roadmap for implementing them in a timely manner. And don’t forget those KPIs for measuring everyone’s progress!
It sounds ridiculous, doesn’t it? But that’s essentially what many companies are doing with AI.
Rather than starting with what the business needs to accomplish and figuring out how the technology might help, they’re starting with a technology and then looking for things to do with it.
Now, don’t misunderstand me. AI is an extraordinarily powerful set of technologies with tremendous potential to transform B2B pricing operations. In fact, that’s what our entire training session was about.
But AI is a means to an end. It’s not the end itself!
Our forward-looking plans should be centered on our strategic pricing priorities and capability gaps. What are our biggest untapped opportunities for improving pricing performance? Which meaningful pricing capabilities are we missing? What’s preventing us from doing the things we’ve long known we should be doing?
Maybe our price segmentation model isn’t really reflecting the various nuances of our marketplace. As a result, maybe our deal-specific pricing guidance is too coarse and generic. And maybe that’s causing us to spend way too much time and energy processing far too many pricing exceptions.
These are the types of things our development roadmap should address.
And once we’ve identified our strategic priorities and capability gaps, we can then start thinking about how AI might help us address them more effectively, efficiently, and economically than we could have before.
Maybe AI allows us to develop a much more sophisticated segmentation model without a massive investment. Maybe it then enables us to generate optimized price bands for each segment. And then, maybe we can use AI to deliver those optimized pricing recommendations through the tools our salespeople are already using.
Great! But notice how we started with the business need and not the technology? That’s how it should be. In fact, if we’ve already done a decent job of identifying our strategic pricing priorities and capability gaps, we’ve got the bulk of our so-called “AI strategy” figured out already.
So, if your executive team is beating the drum and insisting that everyone submit an AI strategy, here’s one you can steal…
We’ll leverage AI to the fullest extent possible to help deliver on our most important strategic priorities and close our most consequential capability gaps, which are…
And then list them. There you go. There’s your “AI strategy” in a nutshell. Feel free to copy and paste it into whatever template corporate has provided.
Of course, we still need to understand what AI can and can’t do, evaluate different approaches, and develop sensible implementation plans. But those are all tactical execution considerations.
Strategy is all about deciding what matters most to the business and what needs to change to produce better results, given the current and predicted situational realities, available resources, and competitive dynamics.
Simply put, strategy is about deciding where we need to go. And while AI can definitely help us get there, we have to remember that it’s not the destination!
Building AI-Enabled Pricing Operations
How can B2B pricing teams move beyond the easy and expedient and apply AI to the most consequential activities, decisions, and workflows for improving ongoing pricing performance and results?
Developing a Winning Roadmap for Pricing
From our research, leading pricing functions go through key evolutionary phases in becoming more effective and strategic. In this 3-part training webinar, learn how to develop a roadmap that streamlines that evolution with a plan to be a more valuable and strategic function.
Aligning Pricing to Business Strategy
How do you ensure that your pricing and the overall business strategy are properly aligned? And what should you do when there's a disconnect?
