First Published on 23rd June, 2017
Ai Editorial: Digital transformation needs to be understood as the project has an enterprise-wide impact. It becomes imperative to comprehend and finalise the “scope” of such initiative aptly, writes Ai’s Ritesh Gupta
Enterprises across different sectors are evaluating the scope and journey of digital transformation.
Prioritizing speed is of essence - for employee-enablement that supports lightening fast, data-driven decision making; instant, relevant response to every customer interaction; digitizing existing business models/ quick introduction of new offerings.
Of course, business continuity is one major consideration. Enterprises have to move forward with their day-to-day tactical projects and at the same time gear up for long-term strategic initiatives.
Starting on right note
Dublin, Ireland-based Datalex, in one of its recent blog posts, underlined that the incorporation of 'digital' into the transformational concept carries a risk of adding “too much into the scope”. Blair Koch, Datalex CTO and President USA, emphasized that one needs to be pragmatic when it comes to how to involve various business functions. He mentioned that airlines need to abstain from unnecessary inclusion of all departments. This would only end up impeding the pace as well as the overall outcome of the project. Also, Koch adds that it is “clearly table stakes for a digital transformation to deliver an exceptional omni-channel customer experience through digital channels like mobile, traditional web, chat, SMS, airport kiosks and airport signage”. But what else should be looked upon as far as scope of digital transformation is concerned? That’s an independent journey for all entities, and this needs to be ascertained properly. Koch underlined that airlines need to look beyond just a retail platform, rather they must opt for a digital innovation platform for agility and speed-to-market.
Also, before embarking on such a project, airlines can also ascertain complex issues related to what’s expected from IT. This is critical considering the fact if an enterprise is gearing up for self-serve IT process for each line of business users, then apt IT operating model is needed. It would be apt to say that in today’s world of development cycles and new technology advancement, “leapfrogging” is a dying art.
Also, full service carriers can’t avoid this question – is maintaining legacy technologies taking IT’s focus away from transformative initiatives? Overall, IT needs to propel business strategy – to digitize the business, and benefits key stakeholders – employees and customers – in an earnest manner.
There are several areas that are being probed and this is generally same for all enterprises – how to shape up the organizational change, the role of senior management, the sort of IT architecture required etc. But there are airline-specific issues, too.
If we talk of IT, then there are a couple of key aspects. Do finalise an underlying architecture that is flexible and extensible in order to support new products or services, in addition to leveraging new industry initiatives like NDC. Modern merchandising and pricing engines do not operate independently. Rather they need to integrate data from various sources, including on-boarding data from external sources, therefore “connectability” is critical. Also, each engine needs to support data-driven decision-making and be aligned as per the business model. For instance, airlines are already deploying merchandising rules that control their business model and managing their own product propositions (inventory, availability, price, product biasing etc.) according to market demands and opportunities, whereas before, business model changes often required a change in the code. By the time the changes made their way through the development cycle and reached the production system, the market may have already moved on, leaving their changes much less effective.
Another significant area is managing data and acting on it. Today integration of data needs to managed from numerous sources and of varied structure and format. A key area of such integration is accessibility and another is moving the data from source to target. Also, digital enterprises are going after real-time monitoring of patterns and sequences of events, acting on even high data volumes from multiple input data sources.
So how are preparing for extracting and acting on data?
As we reported in case of flydubai, multiple building blocks is the way to go in order to attain agility and flexibility. The approach is API-led connectivity. The first layer is systems APIs (for accessing underlying systems of record), second is process APIs (provide access to non-central data, designed specifically for processes in an organisation) and experience APIs (optimization of content, paving way for channels to access data in a desired format and accessibility for devices such as wearables, how the information is displayed on any particular device). On this platform the carrier managed to transform the core system (PSS) of the airline that needs to be ready for digital transformation. The team designed the middleware around offer management, order management and customer management. The API gateway exposes all these APIs to business partners. The value of APIs lies in their ability to help in discovering new use of data.
Travel technology specialists are also working on new platforms where real-time business intelligence can be leveraged for personalisation of offers. Also, the platform, running in parallel to an airline’s PSS, would feature complete PSS booking connectivity and document processing capability.
The journey of airlines, be it for low cost carriers or full service airlines, is going to be different, each can chart their own path. Digital transformation isn’t new anymore, and there are plenty of lessons to learn from. Define the scope appropriately, embrace fast iteration concept approach and definitely avoid expensive product development approach. Keep passengers in the loop - how much change are passengers willing to accept? And act accordingly.
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