Technological advances are poised to have as fundamental an impact in travel as Apple’s iPad in making life simpler for consumers.
IAG global head of innovation Stephen Scott told a Travel Weekly Business Breakfast that powerful next-generation computing is pushing the sector towards a major turning point. He compared the expected shift with the release of the first iPad in 2010.
“You have to keep a close eye on the simplicity of experience,” Scott added. “Customers are fickle when it comes to boredom or complexity.
“Today my phone tells me what the traffic is like and how long my journey will take. We are moving into a new era in terms of customer simplicity. It’s a significant change for many people.”
However, Scott warned the travel sector is “a complex beast” that won’t change overnight. “If you try to apply retail e-commerce to travel, suddenly there’s a whole world of variables,” he said.
“You have got departure and control systems in airports that have 46 years of legacy. There’s a reason they’ve been there for 46 years: they’re hard to replace.
“The point of disruption is to say ‘if we were to invent this today, how would we do it?’, then think how would you integrate that.”
Scott said technology’s influence was growing exponentially due to reduced costs and increases in data storage and computational power.
“Technology and data are so cheap and accessible now that you can create businesses in the same way as you created a new channel [to market] in the dotcom days.
“It’s an inflection point because it means you don’t have to have the same size and scale as big brands to create businesses.
“There’s more competition in the market and you don’t know where or how it’s going to come.”
Scott added there is a risk when firms replicate analogue paper processes digitally, which just shifts inefficiencies online.
“The tendency is to say ‘I know what it looked like on paper, let’s make that digital’. It doesn’t quite do the job.
“If you just make a payment process digital you might not have the paperwork or the storage, but you still inherently have the efficiencies.
“You have to flip it on its head and say, ‘as a customer of that service, what do I want, when, how fast and how simple?’
“Then you have to work back through that process and change it accordingly.”
IAG looks at innovation in three time frames: what can be done short term, what’s coming up in three to seven years, and ‘future-gazing’ at developments further in the distance.
Scott said innovating in large businesses such as IAG required a culture backed from the very top of the organisation.
“You need systems to allow you to innovate, you need product owners who get it and want to work that way, and you need senior sponsorship to drive it through,” he said.
“If your senior management believes something is going to get out of control, they get itchy. They are focused on quarter-by-quarter and what revenues are over that period.
“You have to give them comfort they still have control, but to do that you have to deliver value.
“You deliver value in increments but you are working towards a vision that’s within the three to seven-year mark.”