Digital Disruption Transforms The Travel Industry – And Airlines Must Respond
The digital economy is transforming the way the travel industry operates. In nearly every sector, early adopters are leading the way.
By rethinking business models, these innovators are opening up new markets. Leveraged technologies allow different experiences for consumers that disrupt the traditional ways companies do business.
Five components of digital economy
What’s driving the digital economy? There are five technology trends that are propelling this revolutionary evolution.
- Hyperconnectivity. Objects and people the world over are connected in ways they never were before. Much of this connection is via the Internet of Things. The Internet of Things is the network of objects (things) equipped with sensors and software. When connected with wireless technology, these “things” can capture, analyze, send, and collect data. That information can be sent to computers and devices and be used to evaluate performance and offer insights.
- Supercomputing. These devices generate large amounts of data. Computing technology allows for better analysis of that information. Networked and in-memory computing provide robust tools to collect and analyze all that data. These analyses allow companies to act on information and trends far faster than previously.
- Cloud computing. Data and analysis are most effective when they can be used quickly and broadly. With cloud computing, insights are available around the world. Different platforms and devices can access the same information in real time. Decision makers can respond and pivot wherever and whenever they are. Cloud computing makes businesses nimble. Resources can be reallocated and cost savings gained with rapid access.
- Cybersecurity. With so much data and so much access to that data, protection and security are critical. Fortunately, new tools such as biometrics, multi-factor authentication, and behavioral analytics are available. Such tools protect against attacks from hackers and other parties.
- Outcomes. As our world becomes smarter, consumer expectations are changing. Outcomes are what consumers expect. Businesses must be able to deliver on what consumers want in the moment of need, regardless of where they are or the device they are using. Delighting consumers with exceptional customer service, hyper-responsivity, and new experiences leads to more market share.
Early adopters are winning
Already we see evidence of companies leveraging these digital tools to create and redefine business models. Taxi companies have no taxis. Lodging companies do not own hotels.
These new models have reshaped major travel industry sectors, and consumers today think very differently about what they represent. Here are a few examples.
Airbnb now offers more rooms than some of the most prominent and successful hotel chains in the world. Uber provides one-touch access to rides and transportation without waiting at an airport taxi stand.
Other emerging companies are providing value-added services to consumers in the traditional leisure travel sectors. Skiplagged is an app that finds “hidden city” fares that are far cheaper than some of the commercially published prices.
Seateroo is another service that leverages the so-called sharing economy. The service lets passengers swap airline seats in exchange for payment. Seateroo serves every aspect of the market, including order entry, negotiation, and electronic payments.
What do these new players have in common? They offer consumers something different. They connect with consumers and offer them goods and services they want, at a price point they are willing to pay.
Travelers are empowered. They can review, select, consume, and experience travel in new ways. They have far more control and influence on the newly emergent players than ever possible previously.
Airlines slow to react
Airlines have been slow to respond to these innovations and embrace the digital economy. As a recent Harvard Business Review article noted, airlines have focused on non-disruptive areas to grow market share. These include an increased focus on efficiency (smaller seats, baggage fees, charging for in-flight meals, and entertainment).
Airlines have also turned to international global alliances to help keep planes full. Finally, airlines are continuing to pursue mergers as a way to gain access to more routes and a larger market share.
The result, as the article states, is “a bunch of companies trapped in their customer layer and unable to grow in revenue – except through external means.”
Instead, airlines should embrace these new digital opportunities. Doing so means taking a broad new approach to their models. Here are a few ways the industry can catch up.
- Offer better traveler loyalty management with personalized travel experiences for their customers, knowing the passengers’ personal preferences and needs in order to exceed expectations.
- Think like retailers by offering flyers richer shopping experiences when they purchase travel, giving them more options and flexibility.
- Create smarter operations that use real-time data to accelerate repair and replacement, and deploy predictive modeling to anticipate and address delays.
- Use predictive modeling for improved safety and maintenance as opposed to the traditional reactive model. Data modeling creates efficiency by reducing the disconnects between finance, ticket sales, flight, and analytics data sets.
Airlines that understand the quickly shifting dynamics are going to thrive in the passenger travel market. Digital innovations will only continue to disrupt the travel industry.
Airlines need to recognize that today, every company is a digital company. The companies that excel in the near future will take a leading role in reinventing their business models by digitizing more business components and passenger engagement and partnering with other market entities to leverage economies of scale.
For more insight on this digital age of airlines, see “Build a Better Customer Journey for the Digital Traveler.”
Innovation Without Boundaries: Why The Cloud Matters
Is it possible to innovate without boundaries?
Of course – if you are using the cloud. An actual cloud doesn’t have any boundaries. It’s fluid. But more important, it can provide the much-needed precipitation that brings nature to life. So it is with cloud technology – but it’s your ideas that can grow and transform your business.
Running your business in the cloud is no longer just a consideration during a typical use-case exercise. Business executives are now faced with making decisions on solutions that go beyond previous limitations with cloud computing. Selecting the latest tools to address a business process gap is now less about features and more about functionality.
It doesn’t matter whether your organization is experienced with cloud solutions or new to the concept. Cloud technology is quickly becoming a core part of addressing the needs of a growing business.
5 considerations when planning your journey to the cloud
How can your organization define its successful path to the cloud? Here are five things you should consider when investigating whether a move to the cloud is right for you.
1. Understanding the cloud is great, but putting it into action is another thing.
For most CIOs, putting a cloud strategy on paper is new territory. Cloud computing is taking on new realms: Pure managed services to software-as-a-service (SaaS). Just as legacy computing had different flavors, so does cloud technology.
2. There is more than one way to innovate in the cloud.
Alignment with an open cloud reference architecture can help your CIO deliver on the promises of the cloud while using a stair-step approach to cloud adoption – from on-premise to hybrid to full cloud computing. Some companies find their own path by constantly reevaluating their needs and shifting their focus when necessary – making the move from running a data center to delivering real value to stakeholders, for example.
3. The cloud can help accelerate processes and lower cost.
By recognizing unprecedented growth, your organization can embark on a path to significant transformation that powers greater agility and competitiveness. Choose a solution set that best meets your needs, and implement and support it moving forward. By leveraging the cloud to support the chosen solution, ongoing maintenance, training, and system issues becomes the cloud provider’s responsibility. And for you, this offers the freedom to focus on the core business.
4. You can lock down your infrastructure and ensure more efficient processes.
Do you use a traditional reporting engine against a large relational database to generate a sequential batched report to close your books at quarter’s end? If so, you’re not alone. Sure, a new solution with new technology may be an obvious improvement. But how valuable to your board will you become when you reduce the financial closing process by 1-3 days? That’s the beauty of the cloud: You can accelerate the deployment of your chosen solution and realize ROI quickly – even before the next full reporting period.
5. The cloud opens the door to new opportunity in a secure environment.
For many companies, moving to the cloud may seem impossible due to the time and effort needed to train workers and hire resources with the right skill sets. Plus, if you are a startup in a rural location, it may not be as easy to attract the right talent as it is for your Silicon Valley counterparts. The cloud allows your business to secure your infrastructure as well as recruit and onboard those hard-to-find resources by applying a managed services contract to run your cloud model
The cloud means many things to different people. What’s your path?
With SAP HANA Enterprise Cloud service, you can navigate the best path to building, running, and operating your own cloud when running critical business processes. Find out how SAP HANA Enterprise Cloud can deliver the speed and resources necessary to quickly validate and realize solid ROI.
Check out the video below or visit us at www.sap.com/services-support/svc/in-memory-computing/hana-consulting/enterprise-cloud-services/index.html.
Connect with us on Twitter: @SAPServices
Consumers And Providers: Two Halves Of The Hybrid Cloud Equation
Long gone are the days of CIOs and IT managers freely spending money to move their existing systems to the cloud without any real business justification just to be part of the latest hype. As cloud deployments are becoming more prevalent, IT leaders are now tasked with proving the tangible benefits of adopting a cloud strategy from an operational, efficiency, and cost perspective. At the same time, they must balance their end users’ increasing demand for access to more data from an ever-expanding list of public cloud sources.
Lately, public cloud systems have become part of IT landscapes both in the form of multi-tenant systems, such as software-as-a-service (SaaS) offerings and data consumption applications such as Twitter. Along with the integration of applications and data outside of the corporate domain, new architectures have been spawned, requiring real-time and seamless integration points. As shown in the figure below, these hybrid clouds – loosely defined as the integration of data from systems in both public and private clouds in a unified fashion – are the foundation of this new IT architecture.
Not only has the hybrid cloud changed a company’s approach to deploying new software, but it has also changed the way software is developed and sold from a provider’s perspective.
The provider perspective: Unifying development and operations
Thanks to the hybrid cloud approach, system administrators and developers are sitting side by side in an agile development model known as Development and Operations (DevOps). By increasing collaboration, communication, innovation, and problem resolution, development teams can closely collaborate with system administrators and provide a continuous feedback loop of both sides of the agile methodology.
For example, operations teams can provide feedback on reported software bugs, software support issues, and new feature requests to development teams in real time. Likewise, development teams develop and test new applications with support and maintainability as a key pillar in design.
After seeing the advantages realized by cloud providers that have embraced this approach long ago, other companies that have traditionally separated these two areas are now adopting the DevOps model.
The consumer perspective: Moving to the cloud on its own terms
From the standpoint of the corporate consumer, hybrid cloud deployments bring a number of advantages to an IT organization. Specifically, the hybrid approach allows companies to move some application functionality to the cloud at their own pace.
Many applications naturally lend themselves to public cloud domains given their application and data requirements. For most companies, HR, indirect procurement, travel, and CRM systems are the first to be deployed in a public cloud. This approach eliminates the requirement for building and operating these applications in house while allowing IT areas to take advantage of new features and technologies much faster.
However, there is one challenge consumers need to overcome: The lack of capabilities needed to extend these applications and meet business requirements when the standard offering is often insufficient. Unfortunately, this tempts organizations to create extensive custom applications that replicate information across a variety of systems to meet end user requirements. This development work can offset the cost benefits of the initial cloud application, especially when you consider the upgrades and support required to maintain the application.
What this all means to everyone involved in the hybrid cloud
Given these two perspectives, on-premise software providers are transforming themselves so they can meet the ever-evolving demands of today’s information consumer. In particular, they are preparing for these unique challenges facing customers and creating a smooth journey to a hybrid cloud.
Take SAP, for example. By adopting a DevOps model to break down a huge internal barrier and allowing tighter collaboration, the company has delivered a simpler approach to hybrid cloud deployments through the SAP HANA Cloud Platform for extending applications and SAP HANA Enterprise Cloud for hosting solutions.
Diving Deep Into Digital Experiences
Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics
From Dipping a Toe to Fully Immersed
The first wave of virtual reality (VR) and augmented reality (AR) is here,
using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:
A Vast Sea of Possibilities
- Guiding warehouse pickers, cargo loaders, and truck drivers with AR
- Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
- Building 3D machine prototypes in VR for virtual testing and maintenance planning
- Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
- Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies
Immersive technologies leapt forward in spring 2017 with the introduction of three new products:
The Truly Digital Workplace
- Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
- A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
- A workspace and headset from Meta that lets users use their hands to interact with AR artifacts
New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.
VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things-and (theoretically) do it well enough that no one can tell the difference.
What Is Immersion?
We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.
A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.
To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.
When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.
Download the executive brief Diving Deep Into Digital Experiences.
We could see a backlash touting the superiority of the unmediated physical world-but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”
Read the full article Swimming in the Immersive Digital Experience.
About Kai Goerlich
Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu
How Blockchain Can Restore Trust In The Wine Industry
Blockchain is one of those things that everyone talks about but no one (myself included) really understands-like bitcoin or the stock market. I do understand, however, that blockchain is all about trust, and that’s the reason it’s going to revolutionize every industry. It’s also the reason it can revolutionize wine markets.
Fine wine has traditionally been bought and sold based on large measures of trust. A seller offers a bottle for sale, most likely something rare, old, or from an iconic maker; provides a reasonably good story of origin (or provenance) to establish that the wine is authentic and has been stored correctly; and buyers line up to shell out thousands, if not tens of thousands, of dollars.
That has changed in the last decade.
In 2008, Benjamin Wallace’s true crime hit The Billionaire’s Vinegar (soon to be a movie starring Matthew McConaughey) brought to light the story of a German music manager and wine collector who allegedly duped other wealthy collectors into buying counterfeit wine (i.e., wine that has been adulterated in some way, often passed off under a more expensive brand), including several bottles he claimed belonged to Thomas Jefferson.
Wallace’s book became a New York Times bestseller and planted a significant seed of doubt in the minds of collectors everywhere.
Half a decade later, the wine world was again shaken when wine-collector-turned-wine-forger Rudy Kurniawan was sentenced to ten years in prison for defrauding high-end collectors to the tune of at least $20 million. (For the whole story, check out Peter Hellman’s new book In Vino Duplicitas.) In the wake of the “Rudy affair,” auction houses began to withdraw lots of wine of suspicious provenance. Lawsuits followed, and one prominent collector-billionaire Bill Koch, who fell victim to both Rudy and the alleged forger of Wallace’s book, Hardy Rodenstock -even began a crusade against fake wine, hiring a team of experts and spending more than $20 million of his own money to ferret out counterfeiters.
Trust in fine wine markets has never been lower, but blockchain has brought hope.
Meet Everledger, a London-based blockchain technology firm and the first company to secure a wine’s provenance via blockchain. After making its mark fighting counterfeiting in the diamond industry, Everledger made the jump to wine, and has partnered with renowned wine fraud specialist Maureen Downey (who played an important role in the Rudy Kurniawan investigation) to create the Chai Wine Vault.
Using Maureen’s Chai Method, which identifies more than 90 data points on a bottle, along with high-resolution photographs and ownership and storage records, Everledger creates a permanent, digital representation of a bottle on the blockchain. This permanent record acts as a verification point as the bottle changes hands. The blockchain is updated along the way so anyone who buys or sells the bottle can rely on trustworthy provenance.
This level of supply chain security is increasingly vital to every industry. “If you can track and trace diamonds, you can track and trace anything,” says Joe Fox, SAP Ariba’s Senior VP of Business Development and Strategy.
“One of the things blockchain does is facilitate greater visibility and trust. In embedding it across our applications and network, we can enable supply chains that are smarter, faster and more transparent from sourcing all the way through settlement.”
Wine counterfeiting isn’t new-Pliny the Elder lamented the practice in first century Rome-but it’s certainly reaching new heights. Experts, Downey included, have suggested that as much as 20 percent of wine sold globally is fraudulent. An estimated 10,000 “Rudy bottles” are still in circulation, and just last week, police seized 6,000 bottles of counterfeit wine in China.
For wine markets everywhere, blockchain is a timely innovation that underscores the value of trust in any transaction.
For more on blockchain’s potential to impact business processes, see Improve User Experience With Internet Of Things, Blockchain, And Platforms.
Article published by Eric Annino. It originally appeared on SAP and has been republished with permission.
Article by channel:
Everything you need to know about Digital Transformation
The best articles, news and events direct to your inbox
Read more articles tagged: Digital Disruption