Moving the Mundane to the Machine, and Much More 

A topic that frequently piques the interest of our readers is the potential of artificial intelligence (AI) and its impact on distribution pricing. Common questions about AI include: What are some areas where using AI can make pricing managers more effective and efficient? Will the adoption of AI lead to less human interactions? Can AI help strengthen my team’s analytical abilities?

To learn more about AI’s potential for pricing professionals, we had a conversation with Tony Pericle, Founder of ProfitOptics.  Pericle’s 30+ years in distributor pricing combined with his technical background gives him a unique perspective on this topic.

In this article, we’ll explore the transformative potential of AI in distributor pricing, its implications for human roles, and how it can augment analytical capabilities.

Making the Most of Automation with AI

“AI provides transformational automation capabilities to distributors, which will enable pricing professionals to focus more on strategic initiatives and less on mundane tasks,” highlights Tony Pericle. He emphasizes that repetitive tasks create friction, and with the proper use of AI, friction can be significantly reduced. In addition, AI can reduce costly errors and empower the pricing professional to make better decisions with better insights and prompts for better decisions. These benefits allow pricing professionals at all levels to concentrate on strategic tasks.

Pericle explains, “While not every process automation task can – or should – be solved with AI, many processes improved with automation can also benefit from an AI architecture.” He illustrates this idea by explaining that by embedding AI into key processes – in particular where there is a need to interpret output and make recommendations for action from that output – users (at all levels) will have immediate access to senior-level pricing expertise. 

Speed, Quality, Cost

It has long been argued there is an inverse relationship with these three objectives.  That is, pick two that you want to improve, and the other will be opposite of what you want. Pericle argues that AI enables us to achieve all three simultaneously.  That is: 

1. AI has the potential to produce actionable insights much faster. 
2. Output quality can be exponentially augmented by carefully crafted generative AI prompts. 
3. The cost to implement AI is a fraction of what it was just a few years ago, thanks to the democratization of AI.

With the ability to have at our fingertips the best pricing experts and iterate quickly at low cost, our output will see exponential improvements in quality.

The Human-AI Synergy

AI’s promise extends well beyond mere task automation and better outcomes.  Pericle’s hope is that the surplus of time afforded us by AI will be used to foster more meaningful personal relationships – to allow leaders to mentor and to foster innovation among the mentored.

But the challenge for most companies and individuals is: Where to start?

Pericle asserts that a modest one-time investment of 10 hours can save the pricing professional 10 to 20 hours each month. His recommendation? Start by building a rapport with ChatGPT, Bard or one of other available logic learning machines (LLMs). Resources to learn about AI, especially platforms like ChatGPT, abound on platforms from LinkedIn to YouTube.  Pericle’s advice is this: “We should expect our first question to ChatGPT will be awkward. Look at what children do when they are exposed to some new technology. They are not afraid to experiment. We should have this same approach.” He suggests that we start with a simple question, then iteratively engineer that question or prompt by providing more context, a specific persona, a defined task, meaningful tone and your desired output format.

AI Augmented Data Insights

With three decades of building pricing and data analytics solutions, Pericle’s experience is unparalleled within our industry. But even he admits that “there is never an end to learning about new tools and techniques on how to leverage those tools.”  Sam Altman, in an Oct 2023 WSJ interview said, “We’re big believers that you give people better tools, and they do things that astonish you.”

One of the most transformative applications of AI in data analytics is blending predictive modeling with recommendations. While traditional analytics often looks backward, AI equips us to see and shape the future.  For instance, traditional data analytics will use historical data to identify patterns or trends and have the ability to answer the question “why” something happened with diagnostic, drill-thru capabilities. In contrast, AI can predict the future and, more importantly, make recommendations on how to influence that future for our benefit. This allows the business to be preemptive and proactive rather than reactive. 

Pericle challenges leaders to provide AI-based analytical tools – and training on those tools – to their teams. He echoes Sam Altman’s statement that we will be astonished with what we are able to accomplish when that is done.

Where Will You Take AI? 

In summary, there are three primary areas stand out with immediate AI benefits:

1. Automation: Streamlining tasks and enhancing strategic focus
2. AI-Human Synergy: Fostering mentorship and encouraging creativity
3. Improved Data Insights: Augmenting insights

As the distribution industry evolves, AI stands out as a game-changer, especially in pricing. Embracing its capabilities can lead to unprecedented efficiencies, insights, and growth.

Pericle advises, “To harness AI’s full potential, understanding its capabilities is paramount.” His insights emphasize AI’s transformative potential for those safeguarding and enhancing margins in distribution. As AI continues its growth trajectory, its collaboration with human expertise promises to be revolutionary.

Pericle challenges us to envision a future where we can go from idea to implementation within days and be less reliant on costly consultants, enterprise software, and internal IT constraints.

Pericle leverages ChatGPT daily for tasks ranging from idea clarification, responses to important emails, proposal drafting, meeting preparations and basic data insights. He and his team configure customized data and AI-driven solutions that integrate with their client’s existing systems.

Interested in starting your AI journey? Reach out to Tony Pericle and his team at tony@profitoptics.com for workshops and tailored solutions.