No-one wants to accept a bilateral commitment that loses money. Now, thanks to recently-released functionality in the iCONX RO product suite, customers can see “inside the crystal ball” with more confidence, to evaluate and determine the overall and complete value of a potential deal in advance.

True margin is about more than just ‘making’ money

In tough trading conditions, overall margin is derived not just from applying the selling premium or mark-up. Increasingly, successful deal negotiation is about ensuring you save money, whilst making money. That calls for an end-to-end view allowing you to evaluate the potential cost savings on one side, while weighing this against effective sales margins on the other side. Only with this in place can bilateral negotiations be approached positively.

Critical factors in the decision-making process are numerous, including but not limited to determining the target prices you want, whilst also assessing a variety of supplier offers against your targets. In parallel, you’ll also be appraising targets received from your customer – and keeping an eye on your own risk exposure with others. Without sophisticated system support, it can be almost impossible to sustain this “4-d view” accurately.

Real simulations driven by real data

Key to iCONX’s value-contribution is its highly intelligent use of forecasting technology to facilitate accurate simulation of future scenarios. But how does forecasting work in iCONX?

The iCONX RO Core will deliver an accurate expectation for any given time-period, on any destination or quality-level, based out of real historic activity. The system makes a “look-back” to any period, as defined by the user. The look-back will see the history with a particular carrier, and model the future expectations around that historic data. Where no such history exists – for instance with a pending or brand new carrier, or one that has never made it into routing yet – then test traffic can be ‘trickled’ through the system in a small percentage to generate real-world performance data.

In this way, we are never ‘in the dark’ as regards validated carrier performance when the time comes to use them in routing.

Since all carriers want to grow – perhaps progressing to sell more and more destinations – then the iCONX simulation tools also allow %age growth factors to be dialled in. The user can test out a scenario by saying : “I’m looking back over a 4-week period, on a 24-hr basis, and with 3% per week growth forecast”. Or we could derive a forecast just from “peak-time Sunday” traffic. The system puts you in control.

In summary iCONX enables you to :

  • Simulate potential deals that calculate Gross Margins on routes to sell – based on actual and forecasting figures
  • Simulate cost savings on routes to buy – based on actual and forecasting figures
  • Calculate absolute margins based on combining both cost savings and marginal sales
  • And in effect, calculate the overall potential value of a deal

Fine-tuning the LCR to meet the Commitment ­

One tricky question is “how do I balance my need to follow LCR with the need to honour my commitments? And somehow dial that in to a final routing plan?”

In this area the iCONX intelligent routing platform automatically ensures what is known as “destination priority”, so that you meet your bilateral commitment volumes, whilst simultaneously adjusting routing automatically to meet the overall ‘best cost routing’ position.

Via its complex and intelligent decision-making algorithms, the commitments are met within a routing, whilst the system maintains a watchful eye to identify and exploit the LCR whenever possible, in a way that does not clash with the commitment.

Setting the commitment tempo

Since commitments are bound by a timeline, a decision must also be taken as to how quickly they should be executed.

In managing this, we can always let the software decide, by ‘sharing’ the traffic according to its own logic. A 30-day commitment might take all 30 days to execute. Alternatively it might naturally complete in 20 days. That’s not necessarily a bad thing, and may reflect the good news that the carrier in question enjoyed a higher natural LCR ranking during that period.

Alternatively, as users we can instruct the system to attempt to complete an individual commitment sooner than is strictly necessary, and this weighting will be passed through to the complex routing algorithms, as part of the many and varied “business rules” you can manage within iCONX.

End-to-end visibility

Taken with existing functionalities, the new developments allow a fully end-to-end view. A single view allows you to compare potential draft bilateral deals, to save time and effort in negotiation. Once live, a commitment can be tracked easily via specialised iCONX graphic reporting – to check the vital question, “are we on track?”. Meantime, the system is adjusting the LCR decision-making algorithms automatically, or with user guidance (or both), to ensure that commitments are met without exposing any loss-making scenarios, Once those commitments have been completed, then the system automatically returns the carrier in question to its ‘normal’ routing logic.