You Need the Leading Edge

By: David J. Wardell

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Technology is central to effective competition in today’s travel industry; there is nothing you or I could do about that even if we wanted to. Large agencies in particular have chosen to differentiate themselves based upon technology and related capabilities, and successful competition is, at least in part, dependent upon how successfully technology is produced and used.

We frequently regard technology and travel MIS purely from a cost or technical viewpoint; this is a mistake. Successful technology projects must be based upon the potential business value of the technology and services to be delivered.

Before this can occur, agents must realize that information technology and technology products are intrinsically valueless -- that is, their value derives solely from the extent to which they successfully support effective business change, (operational efficiency or customer-specific services), or competitive leverage (which may be more perception than reality).

Technology is often directed at specific business problems, while opportunities for favorable changes in the way an agency deals with its customers or its operations are ignored. Under such conditions, any system produces significantly less value.

The travel industry faces important competitive and business pressures:

Customers take charge of the business relationship and direction
Financial pressures mount, caused by competitive and operational factors
Change becomes constant, not exceptional

Technology historically has played an important part in changing the dynamics of the travel business and addressing these key business issues. Early travel automation, prior even to large-scale CRS automation in the mid 1970s, achieved economic benefits: financial automation (backroom tasks) dramatically improved efficiency and productivity. During this period "mega" agencies became practical and, coincidentally, reports showing baseline company and customer performance were available for the first time.

Later developments brought operational benefits, in the form of CRS. Passenger data and related business information (financial and non-financial) could then be easily accessed, collected, and used to deliver customer service and company MIS. Reporting developed during these periods (and still used by most agencies) contains extensive detail, but the reports are typically poorly applied to real situations or business problems -- they are not adequately informative.

The industry now must enter the next phase of technology development: information systems and tools are required to support more effective management (either by the customer or by an agency’s own operation), as well as increased efficiency.

Traditional MIS describes operational activities (such as segments flown, tickets issued, or dollars spent). Leading edge information systems support decision-making by agents and their customers, and must be available as early as practical in the processes where they are to be used.

Technology’s travel management role centers in information during this phase of the industry’s development, but travel agencies should not be termed

"information businesses." Information is but one means for effecting business change, but without at least the potential for change to occur, the information has no real value, regardless of how sophisticated the reports or the engine producing them may be.

The truly effective competitor in the information age is the agency that recognizes information as a tool to improve service to its customers, or the customer’s ability to effectively use its services -- and creates an environment to make this happen.

Making this transition is among the most critical part of technology-based competitiveness.