Rearden Commerce: Travel Insight Meets Big Data

by Richard Lee & Jason Busch

At SMBmatters, we’ve done reviews on an eclectic list of products and services – anything from vodka, smart phones, data storage solutions to scotch.  So when my business partner and colleague Jason Busch of Spend Matters and Azul Partners fame asked me to sit on a call with Rearden Commerce to discuss its next level of predictive analytics to better serve its business travel clients, I jumped at the chance, especially given my Orbitz background.

Technically speaking, this was our second product review with Rearden.  Almost 2 years ago, Jason and I had a call with Rearden’s senior GM and product lead to discuss their deal with Travelport and the latest version of its virtual assistant platform.  Back then, we were wowed by seamless integration of data from disparate sources and user interface / ease of use, and simultaneously wished we had such technology when I was at Orbitz and wondered what the next generation of platform would bring.

The next generation, as we found out incorporates the level of quantitative and correlation analysis on historical data (both personal and publicly available) that makes even a Carnegie Mellon graduate’s head spin…

• Air travel – leveraging Bureau of Transportation statistics covering 67MM flights in the past decade, the platform is able to predict and recommend connecting schedule, flight dates and time, specific carrier and flight number, etc. It goes far beyond the “on-time” recommendations for single hops that my former employer and other travel sites provide.
• Hotel stays – while still leveraging structured information from OTAs like Orbitz which possess technical details on over 100K properties and their holding companies, the platform is able to personalize recommendations for travelers based on historical booking / usage pattern, identified preferences, etc.

Powering this analysis and recommendation is Rearden’s powerful data / scoring engine that leverages self-learning or artificial intelligence (AI) capabilities. With each new piece of data, it adds to the normalization of existing foundation and further narrows down the success rate of predictive forecast.  The result is an integrated and intuitive online purchasing experience for its users.

Rearden is light years ahead of where Orbitz was when I was trying to build a fledging B2B business – at the time, with some of the best underlying technology bits available under the sun (or at 35,000 feet). Flash forward less than a decade and big data is finally hitting B2B corporate travel. It’s about time.

From Jason’s procurement perspective, Rearden is doing some pretty cool stuff. Yet, as he observes, the power of predictive analysis far transcends making business travel better for employees. The real bottom-line value is in mining through data and “mashing-up” different datasets to analyze savings, compliance, rebate claims and related information to gain the savings upper hand. And imagine systems doing this for you and presenting opportunities proactively versus relying on sourcing analysts to hunt for things on a periodic basis.

Perhaps Rearden will bring this to users in the future. But we have no doubt providers like Opera Solutions and IBM – which each employ hundreds of statistic PhDs and are doing some pretty nifty things behind the scenes in their procurement and supply chain practices – are well on their way to bringing the power of big data to a new savings and compliance level.

Still, we hope the individual traveller benefits in the future as well. And for this, we have no doubt that we’ll all owe Rearden a big debt of corporate travel gratitude.

Jason Busch is Managing Director at SpendMatters and Azul Partners.  Richard Lee is the CEO of PARR and executive contributor to SMBmatters.

Editor’s Note:  No sooner did we post this article than we discover that Rearden Commerce has updated some of its offerings, including innovations  branded under the Deem Platform.  We invite you to check it out for yourself, since real-time seems to be not quite fast enough in today’s digital world.

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• Rearden Commerce scores $133 million in funding(news.cnet.com)

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• Next Step In Personalized E-Commerce Marketplaces From Rearden Commerce’s Deem Platform(semanticweb.com)

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Death of the Penny (Part 2 of 3 Part Series)

Sheena Moore, an analyst for our sister site Spend Matters’ popular Friday Latte segment, reported that Canada will no longer produce its pennies citing increasing costs of production and decreasing relevance.  “Pennies take up too much space on our dressers at home.  They take up far too much time for small businesses trying to grow and create jobs,” stated Canada’s finance minister during his budget speech in front of the lawmakers in the House of Commons.

Growing up in Korea, I vaguely recall when the South Korean government ceased production of 1 won coins (~tenth of penny at today’s exchange rate) during the 70’s (yes, I am giving away my age).  Transactions were rounded up to 5 won denomination which caused much ire at the time before 5 won coins faced similar fate.  Now 10 won denomination is the lowest.  Many economists agree that getting rid of pennies won’t pose adverse impact on inflation and that sound policy dictates dismissal of the lowest denomination when raw material used in creation is worth more than the denomination itself.

Indeed, there are many precedents in addition to Canada.  Singapore, Mexico, Sweden, and Israel all eliminated their lowest denomination in the past two decades in a smooth transition.  But just three years ago, businesses in the East Coast were begging for households to break their penny jars when shortage occurred in the marketplace.  Question is, if the US follow Canada’s lead in abolishing our pennies, will it go away quietly like Hungarian forint or will it cause a stir as it did in 1999 shortage or an upheaval as it did during the Reagan Administration shortage?

Editor’s Note – This story really has two major angles that are subject to analysis and debate, and perhaps we’ll spark some further discussion on such topics:

(1)   The production costs of coins have shifted significantly in some countries, largely as the result of price fluctuations in the raw metal commodities that are used in the minting process.  Some nations take the prudent route of changing the metal content of their coins, but the market value of the materials used in coins has spawned cottage industries among coin hoarders, who hope to capitalize on extracting the metals from coins which are (sometimes) worth more than the face value of the coins themselves.  Sovereign control over currency production and laws preventing the destruction of coins serve as a practical limitation on melting down coins, but that doesn’t mean some people aren’t intent upon doing it.  http://abcnews.go.com/Business/laws-change-penny-hoarders-cash-thousands-dollars/story?id=15076522

http://tech.fortune.cnn.com/2012/04/11/penny/

(2)   The second issue is when some countries legislate a unit of currency out of existence, not just stopping the production of coins, but by getting rid of units that are deemed too small to remain practical.  While economists have largely supported the historical efforts of countries to “retire” coins and currencies of negligible value, there is some anecdotal evidence that consumers perceive or experience inflation when coins or currencies are dropped.  How much penny candy can you buy when there are no more pennies?  Some research and analysis of the Euro transition’s effect on pricing and consumer perception shows that there are some potential risks when currencies are transitioned out of circulation.

http://www.princeton.edu/ceps/workingpapers/101mastrobuoni.pdf

http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp588.pdf

Editor’s Note 2 – If economists are quick to dismiss the inflationary effects (real or perceived) of coin abolition on consumers of penny candy, you have to wonder if they’d be as dismissive of the interests of investors in the enormous penny stock industry?  I’m just sayin’…

Related Articles

• A History Lesson as Canada Tries to Digitize Coins(businessweek.com)

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• Canada Getting Rid Of Pennies, Plans To Save $11 Million Per Year(inquisitr.com)

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• Good-bye penny, hello multiples of five(macleans.ca)

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