Anand Krishnan, chief executive of IBS Software, says airlines have a golden opportunity to become 'total experience providers' if only they are prepared to ditch out-of-date IT
Guest Post: Legacy tech is no longer an excuse to avoid 'scary' change
You could argue that it took a global pandemic to jolt airlines into fully focusing on the need to create additional revenue streams.
For many, the ability to sell more than tickets became the difference between success and failure.
For example, airlines that were able to quickly cater to the surge in cargo demand as passenger volumes ground to a halt, or who could quickly adapt to drive revenue through innovative new approaches to loyalty, found themselves with a major competitive advantage.
Consequently, airlines have strengthened their resolve to be more to travellers than a seat on a flight.
Their ambitions to become ‘total experience providers’ and benefit from every stage of the passenger journey have intensified.
On most levels it makes perfect sense. Airbnb proved that focusing on customer needs can completely reinvent an industry and change consumer behaviour and preference.
Airlines have a clear opportunity to provide a new and differentiated experience that means customers can handle all their travel needs through one provider – flights, lounge access, hire cars, transfers, accommodation, personalised offers, and everything in between.
It’s a lucrative opportunity that remains largely untapped.
There is, however, one major and inescapable barrier standing between airlines and their ambition: legacy technology.
The bottom line is that airlines are not well set up to become total experience providers. Realising this ambition hinges on their ability to become sophisticated customer data businesses.
But for too long, their fragmented patchwork of legacy platforms has held them back from capturing and using customer data to their benefit.
The reality is that it’s not uncommon for airlines to know almost nothing about a traveller if they don’t log in through a loyalty programme.
We all know what a frustrating experience it can be to be treated as a brand-new customer, regardless of the number of bookings you’ve previously made.
It’s a status quo that does not lend itself to adapting fast to fulfilling a new set of customer needs and expectations.
It’s damaging for brand reputation, and it overlooks a golden opportunity to sell to a buying audience.
Industries such as retail have already shown how adapting systems to pull insights from customer data can have a huge impact on improving revenues and customer service. There is no reason why airlines can’t follow suit.
It’s difficult to pull insight out of a patchwork of siloed, decades-old systems. Airlines know they need to break away from their IT past to unlock this golden opportunity.
And the right way to do that is through the power of modern, cloud-native SaaS [Software-as-a-Service] platforms.
These allow an airline to replace a patchwork of disparate systems with a single, comprehensive solution that provides a clean and integrated view of the customer journey.
This in turn gives them a single view of customer data, allows them to extract insight from that data and use it to super-charge their businesses.
It now becomes possible to make real-time decisions based on context and insight at every customer touchpoint. In other words, it now becomes possible to truly innovate as a business.
In the same way, airlines realised that being asset-light and leasing aircraft stacks up as a business model, not owning all their IT infrastructure is also critical to their future.
Every CIO in the industry that is working within the confines of owned infrastructure running legacy systems finds themselves struggling to innovate at speed.
Yes, it took the turmoil of the last two years to jolt the industry in this direction. But those that move fastest now have an opportunity to offer data-rich, personalised services to customers, vastly improve the customer experience and create new revenue streams.
Change is scary, but legacy technology should no longer be an excuse for those airlines that want to become more than seats on flights.