Airlines Fly Higher When Embracing A Digital Business Framework

Philip Te Hau

The digital revolution is here. It’s driven by emerging technologies, including the Internet of Things, supercomputing, and cloud computing. This transformation means airlines need a digital business framework. They need to anticipate and respond to a faster, more fluid marketplace. The digital revolution enables a new level of data-driven collaboration across all airline functions collectively; connected people, processes, technology, and culture to deliver a more seamless customer experience.

A digital business framework for travel companies includes five core components. Here is a closer look at each.

1. Outcome-based traveler engagement

We live today in an outcome economy. Instead of being service providers that sell tickets, airlines are becoming hybrid retailers. They no longer just get passengers from point A to point B.

Today, airlines can provide complete end-to-end travel experiences for leisure or business. That means selling or partnering to sell all relevant travel services to consumers. The framework must allow for positive traveler loyalty management.

Travelers want simple and seamless interactions. They want the ability to use any device, anywhere at any time.

Travelers also want more control of their travel decisions. They want the ability to use multiple channels seamlessly.

Airlines need to become traveler-centric. The consumer needs a consistent experience whether on the web or a mobile device, speaking with a call center, or checking in at an airport kiosk.

2. A smarter, better engaged workforce

Complexity is the bane of the modern workplace. Employees are working harder but not necessarily for more results.

A significant percentage of airline employees work in airports or are flying. Those highly mobile employees need access to information but are often constrained by a lack of smart technology.

Airlines need to cut out the complexity by giving employees the right tools that make work simpler. They also need to modernize their tech in order to be an attractive career of choice among millennials.

The airline workforce is also becoming more contingency based. With contractors and service providers doing more work, airlines need to be sure all employees focus on safety and regulatory compliance.

3. Collaboration with suppliers

There is an amazing opportunity for airlines today to collaborate all along the supply chain. Collaboration can lead to the discovery of new products and services, creating value across the chain.

Connecting suppliers large and small with the right transactional platform is essential to leverage relationships today. In addition, employees need to have good user experiences when using these systems to interact with suppliers; otherwise, there is more likelihood that employees will circumvent negotiated contracts.

4. Leveraging the Internet of Things and Big Data

The Internet of Things and Big Data are no longer new concepts. Airlines are beginning to embrace the powerful capabilities of these complementary technologies.

Today, connected objects send massive amounts of data to supercomputers. Analytics and decision-propelling dashboards can interpret and present that data in actionable ways.

Sensors and beacons now allow airlines to track passengers, providing travelers with information in the moment that enhances passenger travel. Travelers have more information than they need throughout their journey.

Other experiences, from baggage tracking to cabin temperatures and air quality, can be improved with more data sent in real time.

Sensor-equipped parts will also help airlines track and improve flight operations, particularly fuel consumption. Sensors will help predict needed maintenance and repairs

5. Connected core business processes

These interconnected processes will create significant differentiation for airlines that adapt and adopt

Airlines can use these new business systems to create seamless end-to-end experiences for consumers. By integrating digital payments, invoice management, booking, expense settlements and supplier certification, for example, airlines can offer one-stop experiences.

From warehouse management to billing to in-airport messaging to seamless consumer experiences, the airlines that leverage these opportunities are poised for increased market share.

Envisioning a digital business framework

Capitalizing on these opportunities means having the right digital framework. Using in-memory computing, airlines will no longer need to operate in batch mode or have to create complex workarounds to improve procedures.

The framework needs to operate in real time and be capable of simulations and predictive modeling. The framework needs to be agile, able to respond to new market entry, new business models, and organizational changes with no delays.

It must be simple to choose a framework with a low total cost of ownership. Finally, user experiences for employees need to be clear and easy to adopt in order to drive productivity.

For more insight on this digital age of airlines, see “Build a Better Customer Journey for the Digital Traveler.”


Philip Te Hau

About Philip Te Hau

Phil Te Hau is the Global Head of the Travel and Leisure industry business unit at SAP. He is responsible for the industry footprint within airlines, hospitality, airports, passenger transportation, and asset management globally. By offering prescriptive road maps for each industry sub-segment, Philips helps SAP customers to approach their digital transformation through an industry lens