Prioritizing Capabilities and Governing the Airline Digital Transformation

April 16, 2018

To wrap up this blog series I would like to provide my insight as to how to prioritize the capabilities as well as build a roadmap for delivery that will maximize the chance of success of the airline digital transformation.

Blog 1 : Introduction to Airline Digital Transformation
Blog 2 : How does a digital innovation platform fit into the enterprise IT ecosystem
Blog 3: Capabilities of an Airline Digital Transformation -A digital innovation platform
Blog 4: Designing your organization for a successful digital transformation

When prioritizing capabilities, there must be a scoring model that takes into account the key outcomes of the transformation. The scoring model should include both objective and subjective criteria. Of course the scoring model should account for increases in revenue and cost savings, but it must also account for alignment to the transformation strategic architecture. Development of a strategic architecture and alignment to it is imperative to ensure the capabilities will be delivered on a strong technical foundation that will ultimately drive down the cost of delivery and ongoing support, while at the same time reducing the time-to-market.

GoverningtheAirlineDigitalTransformation-1

Governance Team
In order to ensure the priorities are met and the appropriate executive support is in place, you must establish a lightweight, agile and strong governance team. It is imperative that the governance team includes senior leader representation from all the functional leaders involved in the scope of the digital transformation. The senior leaders should appoint working members to monitor and make tactical decisions and should push down as much decision-making as possible. At the same time they need to stay close to the transformation and monitor the timeline, resource plan and financials, and be available to make necessary trade off positions as the transformation progresses.

The governance team will ultimately make the decisions on the priority of the capabilities and will take advice from the execution team on the best way to sequence the prioritized capabilities into a roadmap.

Capability Roadmap
The roadmap developed should show how the transformation will take you from the current state to the future state and include a dimension of time, preferably at least quarterly “releases” of capabilities. The roadmap should be 24-36 months in duration. Of course the roadmap will always be under review by the execution and governance team and will adapt accordingly as the transformation execution progresses.

It is my experience that when developing a roadmap for the digital transformation the team should include a set of quick wins, sometimes considered the “beach head” in the early part of the transformation. The beach head will establish a foundation for delivering future capabilities. When delivering the beach head, the execution team should build the capability the “new way”, including the new organization structure, leveraging the new governance team, the new operating model and some of the new technologies that will be included in the transformation. The team should also be laying down a solid technical foundation early in the process which in the end will accelerate capabilities later on.

If possible, the early quick wins should be built on the new technology platform to show the organization the realm of possibilities of delivering value fast, and also doing it the right way. Once you start delivering, you highlight the value of putting in place a strategic technology capability while delivering business capability that meets the objectives of the transformation. Too many times I see shortcuts taken early in the transformation just to deliver fast, and then the transformation never achieves the pace required to be successful.

Single Customer View
For airline digital transformations I would suggest the early releases include a strong data focus. Specifically I would recommend a focus on defining and delivering a strong data capability around the customer. I would ensure early on that the transformation builds a common representation of the customer and ensures that all interactions for a customer are tracked and related to the customer data entity.

Equally as important is having a single view of all customer orders organized in a way that it’s easy to access and provide analytics. Once some of the core data foundations are in place and there are a few quick wins leveraging the data asset like new email campaigns or new targeted marketing in the existing digital experience, I would change focus to selecting and implementing the new digital commerce platform. This will be the foundation for growing revenue from next generation bundling and packaging as well as selling additional ancillary products. The quick wins on this platform would be to sell new ancillary products across multiple channels that the airline could not otherwise do without this new platform.

As the transformation matures I would recommend looking into new and innovative ways to personalize offers and price bundles using machine learning. This approach is a crawl-walk-run mentality that looks for quick wins, lays a solid technology foundation and ensures that new innovative technologies can be easily leveraged in the future-state digital platform. I sometimes say that the digital transformation should deliver a digital innovation platform that easily allows for new innovations to be easily integrated into the airline’s digital platform.

Conclusion
In summary it is my recommendation that any airline that expects to deliver a successful digital transformation will need to put in place an agile but strong governance process to guide the transformation. The governance needs to be made of cross-functional senior leaders, not just IT leaders. The successful digital transformations will lay down a solid technical foundation and build the new capabilities on top of it, delivering capabilitiy early in the transformation but not always cutting corners to deliver capabilities the fastest way. The governance process will ensure that value is delivered every step of the way, but that shortcuts are not always taken to deliver the value. An airline has to ask itself “how did we get to where we are now?”. When evaluating the answer, the airline will discover it was probably due to taking many shortcuts to deliver capabilities based on one dimension: time. If you lay a solid foundation early in the transformation you will make up a lot of time on the back end by leveraging common capabilities that were developed and delivered early.

This concludes my blog series on digital transformation on for airlines. We have covered a lot of ground in this series and I hope it gave you some perspective on how to scope and deliver a successful airline digital transformation. I covered the topics, and specifically the capabilities, required for the successful airline transformation at a very high level. In future blog series I will provide insight as to what I think is the future state of a few critical airline capabilities, for example airline seat pricing.

Blair Koch, Datalex CTO & President USA

 

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