Special Report: The Dublin digital dock which says U2 can do innovation

Special Report: The Dublin digital dock which says U2 can do innovation

Lee Hayhurst was invited to see where global business consultancy giant Accenture does innovation in partnership with travel clients faced with the challenge of digital disruption

Lee Hayhurst was invited to see where global business consultancy giant Accenture does innovation in partnership with travel clients faced with the challenge of digital disruption

The potential for disruption in travel is seeing some of the planet’s leading corporations invest millions developing the strategies and technology to keep pace and defend their positions.

While many established travel companies which are being directly challenged by a rapidly-changing business environment are reacting, so too are strategic partners that take a broader overview.

One such is Accenture, the global professional services giant and consultancy, that has had an innovation alliance with Amadeus, Europe’s largest travel technology developer, since 2017.

Just yards from the graffiti-covered recording studio in Hanover Quay, where legendary Irish band U2 recorded some of their most iconic albums, sits Accenture’s The Dock global innovation hub.

Hanover Quay, on Dublin’s Grand Canal, today retains little of its old industrial heritage and has become a centre for the Irish capital’s booming digital economy.

Facebook is located just up the road, for now until it relocates to new offices in the city, and Google is busily developing a huge area on the opposite side of the canal.

Silicon Dock, as it is now inevitably dubbed, is joining Silicon Valley in California and Silicon Roundabout in London, as one of the key centres for digital innovation in the west.

Accenture set up a dedicated travel division three years ago. Previously it owned lowcost airline software provider Navitaire, which it sold to Amadeus for $830 million in 2015.

What to do when you’re threatened by ants and wolves

Increasingly the world of business is spoken about in terms you’d more usually associate with one of David Attenborough’s hugely popular natural history series.

Businesses are said to be operating in commercial ecosystems, are part of a web of interdependencies, and evolution is vital for their survival.

Accenture talks about “Living Business”, a constantly iterating and evolving entity that has to adopt new approaches to growth and survival or be outcompeted by the primary consumers.

Jonathan Keane (pictured), said all traditional incumbents are today threatened by two types of competitor – ants and wolves.

“The right thing to do is to move forward and evolve the business and change the way people live and think. We think that’s important because of the competitive threat that exists.

“We think businesses are being attacked from two angles. There are the ants, innovative start-ups who do not have any restrictions to growth.

“These businesses are crawling all over these traditional businesses and challenging their ability to transform and grow.”

Keane said the lowcost airlines were the ants of the aviation sector when they emerged during the first dot com boom, while Oyo Hotels is doing the same in hospitality today.

At the other end of the food chain, the wolves are the large non-travel businesses like Airbnb, Amazon and Google.

These firms “are challenging the key tenets of our industry” and tying to take the lunch of its traditional travel clients, added Keane.

“How do you deal with the challenges coming from the ants and the wolves because the threats that coming from them is quite different?”

Accenture believes that all firms must adapt to this new world and move from being relevant to hyper-relevant to their customers.

Keane cited Eurostar, the cross-Channel train service, which was surprise to find that 82% of potential customers had never travelled with it before.

“One, it’s quite shocking that the figure is 82%, the second thing is that Eurostar did not know that. That’s a degree of churn that’s unfathomable.”

Keane believes being hyper-relevant and creating a “living business” that has “real purpose” that “shares the values of its customers” is the way to address the challenges from ants and wolves.

“You need to create an environment where people can collaborate. Growth is hard to achieve.

“Most senior people in businesses we deal with believe they have to reinvent their businesses to go after that illusive growth.”

Despite 87% of C-suite leaders telling Accenture that reinvention is required to succeed, only 63% of their direct reports say past approaches are irrelevant today.

Keane said a “living business” has vitality and instils in its workforce a sense of prestige in the business and its mission.

“You need to create a culture where you are really thinking about the customer at the core. The first question all the time needs to be ‘what does this mean for our customers’.”

The travel division was established to serve clients broadly in three key areas: aviation, hospitality and travel services, like car rental and OTAs.

As well as the sort of traditional business consultancy services you’d expect from a Fortune Global 500 company like Accenture, the firm is offering practical support in tech R&D and deployment.

Previously Anderson Consulting, the Accenture identity, which was adopted in January 2001, was chosen after being suggested by a Dutch employee as part of an internal competition.

The name is derived from the term ‘accent on the future’, and in the The Dock some 300 people drawn from around the globe and from diverse academic disciplines are giving Accenture just that.

They are supporting a travel division that has doubled in size over the last two years and now employs 12,000 people globally from among the 450,000 who work for Accenture.

Jonathan Keane, Accenture global industry managing director for aviation, said: “We have made significant investments in, and we are committed to, the travel industry.

“Today, we are working with 90% of the world’s top 30 airlines helping them to change and transform the industry.”

Keane said Accenture’s value is the work it is doing with clients in a number of strategic areas including digital and technology but also operations, business strategy and mergers and acquisitions.

So, alongside more operational areas like fleet and route optimisation and revenue management and distribution, Accenture is looking at how its clients can successfully embrace a digital future.

Keane concedes that travel, and aviation in particular, are often criticised for showing too little innovation, but he believes the industry can “beat itself up” unnecessarily about this.

A particular challenge in aviation is a fundamental requirement to prioritise safety and security and a distributed and an often unionised workforce that can make dynamic change difficult.

“Most airlines and airports are not short of good ideas,” says Keane. “The challenge that they face continually is speed of execution and turning those ideas into reality.

“We help clients take what they believe to be good ideas and getting proof of concept and evidence to their leadership boards that that’s the right thing to do and help them in execution.”

Making innovation real at The Dock

“Making innovation real” is what Accenture’s team at The Dock is obsessed with, according to the hub’s head.

Ryan Shanks, director of The Dock, has had a 20-year career with Accenture in multiple countries and industries.

He now heads up a team of 300 experts in everything from Artificial Intelligence to the Internet of Things, data analytics, design and engineering.

Although the experts that work in The Dock want to see their ideas become reality, Shanks said it would not really be innovating if it was certain that everything they do goes live.

He says: “The one thing we are obsessed about is making innovation real. There is so much jargon in innovation and digital, you need to stop and say what are we actually talking about.

“We can do much without an actual understanding in real everyday language of what we are trying to fix.”

Shanks said clients seek assistance from The Dock for different reasons. Some have an urgent problem that needs solving, others look at innovation as not being core to the business.

And he said many are not seeing the sort of “tectonic shifts” of digital disruption, but a sort of “compressive disruption” caused by the demands of incessant and increasing competition.

“They are at the point where they are thinking there must be an easier way to make money,” says Shanks.

The challenge for The Dock is to take the tech engineers create and infuse it with possibilities, humanise it. “It’s understanding does anyone actually want this,” Shanks says.

And he says outsourcing innovation to a company like Accenture means firms can give it the oxygen to experiment on something that, at the end of the day, may not work.

“Some organisations are rewarded on operational excellence and so, as a result, they give people what they expect. The entrepreneurial part of their business was dead a long time ago.

“We help executive teams figures out what are the things they need to do.”

The Dock is Accenture’s global innovation and research and development hub, but it has 50 innovation centres around the globe supporting local clients in their markets.

John Spencer (pictured),  senior management consulting executive who heads up Accenture’s hospitality division that includes cruise and casinos, agrees that execution at scale is his clients’ big challenge.

“If you think about the largest hotel companies that can have five, ten or even thirty thousand properties and about the scale required to make change.

“Most organisations today are defined around their operations, not change. Our value to clients is how quickly we can help them deploy a great idea to every asset throughout the business.

“There are a lot of great companies that come up with a lot of great ideas, but those ideas die because they have no idea how to deploy them.”

Accenture believes the requirement to embrace change is only increasing as firmly established sectors are faced with disruption by new entrants that threaten to turn models on their heads.

And Accenture itself has reacted to this digital transformation switching its model from basing its value on the resources it commits to a project, to outcomes and measurements of success.

Spencer said this is why it is investing in the research and development skills required to deploy and execute innovation while offering clients the scale and penetration of a global cross-sector player.

“Firms want to replace legacy systems, they just can’t get their procedures and resources in place quickly enough,” he says.

“There is a real risk that if the travel industry cannot solve this those new entrants are going to displace and have huge impact in disrupting the core players in this marketplace.”

Keane adds: “Disruption is pervasive, so we are constantly looking at industry disruption and what is happening as a result in the industries we serve.

“Most airlines are struggling to work out what the implications of this are while they are still thinking about today’s problems.

“But disruption in travel is already here. And we genuinely believe that the world of travel is about to be disrupted more than it has in the last five to 10 years.

“Airports, for instance, make money in three ways: landing fees, car parking and duty free or retail.

“But there are pressures on all of these, so how are airports going to cope with that level of disruption when people stop buying in airports or driving themselves to them?

“If you take retail out of an airport, what else do you put in it? Changi airport in Singapore is already looking at what an airport looks like in the future if there are no carparks or retail.

“The pace of change is not going to diminish, it’s only going to get faster. How do you compete in a world that’s changing so quickly?”

Spencer points to OYO Hotels which has seen amazing growth by offering independent players a tech platform and brand under which to operate, much as Uber has done in ground transport.

Could this sort of model be applied to the cruise or aviation sectors where individual asset owners see a low cost way of breaking into markets that traditionally have huge barriers to entry?

“OYO is very much a platform-based player. They do not own hotels or build hotels. Their entire focus is to say how can we bring independent hotels under a new brand structure.

“We can see that happening across the board. The ability of new entrants to come in put pressure on everyone.”

Keane warns there are no silver bullets waiting to be fired that will solve firms’ digital challenges and that it really comes down to marginal gains.

“It’s really about how you create the processes, organisation and the right culture to make those marginal gains in all the areas of your business to support you in everything you do,” he says.