Capabilities of an Airline Digital Transformation -  A Digital Innovation Platform

July 27, 2017

This is the third post in my series of blogs on delivering successful Airline Digital Transformations.  In this post, I will explore the capabilities that should be included in the scope of the Digital Innovation Platform.

Previously, I covered the scope of an airline Digital Transformation.  Most airlines limit the scope of the Digital Transformation to their customer-facing digital products and distribution strategy.  But in order to deliver and maintain a successful digital transformation, an airline must deliver a Digital Innovation Platform in order to  have the agility required to maintain a rich customer experience as well as stay ahead of the competition. 

Click here to read Blog one - 'Introduction to Airline Digital Transformations'

 Click here to read Blog two - 'How does a digital innovation platform fit into the enterprise IT ecosystem?'

 

I recommend that the scope of a Digital Innovation be broken down into a set of capabilities.  These capabilities describe “what” the Digital Innovation will deliver in terms of the actions or outcomes of the digital transformation.  There are two different types of capabilities that the transformation must deliver: functional and technical.  Functional capabilities describe what a customer will actually experience in the digital customer experience; technical capabilities describe the capabilities that are needed to support the functional capabilities.  This blog post would be much too long if I outlined all of the required capabilities so I will focus on what I believe are the key capabilities within each type to ensure that the airline’s Digital Transformation is successful.

First, let's look at the functional capabilities of a Digital Innovation Platform that will be required to ensure a great customer experience.  The functional capabilities should cover the customer’s entire travel journey, but airlines should focus on those parts of the travel journey where they can provide real differentiation over competitors or third-party digital experiences that a customer will leverage throughout their travel experience.  Airlines should look for capabilities that will drive customers to their digital channels in order to reduce distribution costs and boost margins.  While airlines can provide a full customer experience through their digital products, they can further differentiate themselves by providing unique functional capabilities in pricing and product offer optimization.  Airlines need to focus on delivering retailing capabilities that they have traditionally not been very good at providing to customers.  This will drive value to the customer and grow revenue and margin for the airline.  It is imperative that these functional capabilities are delivered through an exceptional digital commerce platform to accommodate the retailing needs of an airline.  The Digital Commerce platform should deliver enhanced dynamic pricing of air and non-air products and services, optimize the offers to the customers, and provide rich payment options for purchasing products and services.  The Digital Commerce platform should insulate the airlines digital channels from the complex airline data structures required to fulfill the order for the customer.  An airline may not be able to get to a “one click” purchase but it should strive for something close to it. Airlines must provide a rich set of payment options in order to maximize customer conversion.  The customer experience should be completely ‘connected’, i.e. enable a customer to start a shopping experience in one channel and complete it in another.  After a purchase is made by a customer, the airline needs to provide accurate and timely operational information to the customer throughout their travel journey.  It is not acceptable any longer for customers and agents to have different operational flight information.  During the day of travel, airlines should provide customers with value added opportunities to improve their journey by providing personalized and contextual offers.  Airlines need to provide much better capabilities throughout the day of travel but most importantly through the airport.  Delivering a set of capabilities like self-service bag drop, improved security products, walking directions, personalized information displays, self-boarding and accurate and timely flight information is critical to streamlining the airport experience.  Destination capabilities should also be included, allowing the customer to have a true door-to-door interaction with the airline.  The airline should allow the customer to book transportation, destination events, and adventure and tour options.  It is now well accepted, and becoming increasingly important, that the customer experience is very personal and contextual throughout the travel journey.

Many times, in my career I’ve heard the statement “Do not deliver technology for technology’s sake”, and of course I agree with this 100%, but I would emphasize that I do believe the foundation of successful Digital Innovation Platform is a solid technical capability that is durable and agile to support the functional capabilities discussed above.   The technical capabilities of a Digital Innovation Platform require clean, accurate, and uniquely identified customer data.  In order to deliver a great customer experience an airline must uniquely identify its customers, track all the customer interactions, use analytics to derive customer attributes and preferences and then use this customer data to drive a personalized contextual experience.  Building out a customer master data management capability is costly and technically difficult but is absolutely necessary in order to achieve the desired objectives of the Digital Transformation.  Customer data is essential but clean, accurate, coordinated data from other data domains within the airline is also very important to the success of the transformation.  Another critical technical capability is that the digital innovation and commerce platform should enable a connected, responsive customer experience in all digital channels which is increasing a mobile experience.  All channels need the ability to provide real-time messaging and events as well as timely and accurate information to the customer along the entire travel journey.  Airlines should have the ability to track the customer throughout the journey in order to provide contextual information based on where the customer is in the journey.  In order to accomplish location-based interaction the airline will require a locations services capability.  The Digital Innovation Platform should inherit technical capabilities from the overall IT platform to minimize the amount of scope that the digital transformation needs to deliver.  The inherited technical capabilities should include integration, operational data, business intelligence, and security capabilities.

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'Nesting of technology platforms to deliver a digital transformation'

 

In summary, an airline should define both the functional and technical capabilities that make up the scope of a Digital Innovation Platform.  The functional capabilities should address the entire travel journey for a customer and multiple touchpoints throughout.  It should have a particular focus on providing very timely, accurate and personalized interactions.  The Digital Commerce Platform should address the gaps airlines have in their retailing capabilities.  The technical capabilities delivered must include a uniquely identified customer as well as capabilities that will allow the airline to track and communicate with the customer throughout the travel journey across all digital channels.  The Digital Innovation Platform that results from the airline’s Digital Transformation should inherit capabilities from the broader IT platform.

In my next blog post I will discuss how an airline will need to plan the work and organize to deliver its Digital Transformation in an agile way.

 

Blair Koch, Datalex CTO & President USA

 

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