Point of View

Transitioning from Legacy to Modern Retail Platforms

iRetail---Paul-Byrne-Blog-1

So you've read IATA's new paper on transitioning orders and offers? Here are 6 things to do next.

 In October 2023, IATA released a white paper — written by 15 airlines with input from IT partners, including IBS — which outlines a standards-based approach to modernising offer and order management.

Make no mistake, this is a huge step forward for the industry. It sets out design and IT principles needed to ensure both maximum benefit and interoperability.

The paper also provides, in some detail, the principles IATA and its contributors believe will enable an orderly, managed and successful transition to modern airline retailing.

Airlines are beginning to finally acknowledge that the current situation, often marked by ancient technologies hedged in by workarounds and bolt-ons, cannot continue for much longer.

It accumulates risky technical debt, forces airlines into making needlessly expensive workarounds to meet market expectations and makes it harder to innovate to keep up with ever-changing consumer demand.

The new transition framework is an important step on the path to the modernisation of offer and order management, one that will overcome these challenges. But it's just that: the first step, a set of guidelines.

There remains a huge gap between planning and delivery. To bridge that gap, airlines and their partners need to find the right approaches, the right technologies and the right operating models.

For the teams tasked with managing this transition, that's a big challenge. How do they use the framework and actually set off on the right path for them, one that will lead to a successful transition?

Here are 6 questions, with answers, that those teams can ask themselves, their internal partners and their external partners.

1. Is the platform you're choosing really based on a modular, API-driven approach?

A lot of the airline retail platforms on the market today are designed with the aim of shifting licences. Even if they have some elements of modularity, they're basically tightly coupled products.

If the platform you're thinking of buying into fits that description, but is promising compatibility with the new modular, API-driven approach, there are two big risks:

  • Its legacy approach isn't really compatible with IATA's new flexible, modular framework and you could be locked into a system that will be slow and hard to modernise.
  • The new modular system you're being sold is vapourware and won't be ready in a usable form for an unspecified time.

Ideally, what you want is to choose a platform that is already implementing a modular API-driven approach to offer and order management, among other things, in production environments.

This gives you a significant head start on the path to modernisation. It also means you're working with a technology and a vendor that is already well adapted to meeting the challenge ahead.

2. Can your team create a platform specific to your business needs?

One of the key findings of the white paper, was that no one stakeholder, neither an airline nor a vendor, has a fully modernised offer and order management system in production yet.

This is an important finding in itself. It recognizes that we're all in the process of change and, given that everyone recognizes the need for interoperability, that more cooperation will be necessary.

But it also prompts a very important follow-on question: is it possible to design one solution or system that will fully meet the needs of every or even most airlines?

Of course, the answer is 'no': business models, use cases, existing systems and other peculiarities are simply too diverse. And this is where modularity comes into its own.

Your team, and your technology partners, should be able to mix and match modules — prebuilt, customised or created from scratch, from any vendor that adheres to the standard — to create a best-of-breed solution for your airline's specific needs.

Crucially, your technology partner should have experience in doing this in the real world, not just on paper or a PowerPoint presentation.

3. Does your partner have experience in change management?

Modernising offer and order management disrupts traditional ways of working for key teams within the airline.

Any team that has been historically involved in selling seats will see its mission, its operating model and its contribution to the business change significantly.

The transition to modern offer and order management will also require staff to learn new skills, whether technical or soft skills, for instance working with new partners.

Your transition team must have access to real-world expertise and experience, whether in-house or with your project partners, in managing this kind of change. Without it, your new systems will not get the necessary buy-in.

4. Will the new system really let you sell anything?

Today, airlines are constrained. Their legacy offer management systems are so rigid, that even when they know an ancillary product or service is in demand and would help increase sales and revenue, they can't add it in a timely manner. And adding it all too often involves prohibitive expense and workarounds.

Any new system should be intelligent and modular enough to:

  • Interface with other systems and functions within the airline.
  • Connect to the systems of existing and future commercial partners.
  • List any product or service, even if it's not flight-related, in its product catalogue.

Again, the design and technology principles outlined in the white paper make these innovations easier to build towards. But they are only a starting point.

Your team should have access, whether in-house or through your tech vendor, to real-world and demonstrable expertise in achieving these outcomes in a production environment. 

5. Can your team, and your vendor, build a business case you can sell to the board?

Even though everyone knows that we, as a sector, need to move to modernised offer and order management, making the case to do it now can still be difficult.

There are a number of reasons for this:

  • Companies have already invested significantly in workarounds to improve offer and order management using existing platforms and are unwilling to invest more.
  • There is significant risk and overheads associated with transitioning from legacy systems, no matter how inadequate to today's business needs they are.
  • Airlines have tended to lead with modernising offer management, because it's customer-facing, but CFOs tend to be sceptical of promises of extra revenue, preferring cost savings.

The IATA airline consortium has also provided a business case starting point for airlines. Again, the key here is having access to experts who have a record of success not only in building persuasive business cases for transition but also in following through and achieving the benefits promised by those business cases.

6. How soon will you see benefits?

The beauty of a modular, phased approach to offer and order modernisation, is that you shouldn't have to wait until the end of the process to realise tangible benefits, the kind that show up in the bottom line.

The internal and external team putting together the business case and change plan should be able to forecast when you will start to see a return on investment, in which areas of the business and how.

They should be able to back this up not just with projections, important as these are, but with real-world examples of their work in other contexts, on similar modernisation projects.

IBS Software is a leading SaaS solutions provider to the travel industry globally, managing mission-critical operations for customers in the travel industry.

Among other things, IBS offers modular airline retail systems, with modern offer and order management. And it has been doing this for years.

IBS can use the new IATA guidelines to find the right approach for you and your airline. But this is an evolution, not a revolution — and certainly doesn't require starting from scratch.

Find out how IBS can help you build the business case for change, based on real-world successes in modernising offer and order management and on an intimate knowledge of the new IATA framework. Contact our experts today.

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