NDC to the Power of Sabre – Chapter 4: Four steps to get started with NDC

NDC TO THE POWER OF SABRE – CHAPTER 4: FOUR STEPS TO GET STARTED

Introduction

The time for the travel industry to transform into intelligent retailers is now. Airlines and agencies are focused on new capabilities to support this transformation. The technology is here. Now what? How can you get started with NDC?

Getting started can be overwhelming, but driving this change doesn’t need to be. Caroline Strachan, managing director for Festive Road, highlights three factors that are necessary to drive change in an organization – the will, the skill and the bill. The will is about having the desire and alignment around your strategy, the skill means having the right people inside your organization and the bill is having the funding worked out.

There are three things needed to drive change in an organization – the will, the skill and the bill.” – Caroline Strachan, Managing Partner, Festive Road

At Sabre, our airline-retailing strategy will take you beyond NDC and lead you though this vital transformation.

In this chapter of our NDC eBook, we have created four steps to help get you started with NDC:

  1. Bring the right players to the table
  2. Align your strategy and objectives
  3. Reach outside your organization
  4. Partner with the right technology providers

Some players will not adopt NDC at all, whereas others will lead the way. Either way, Sabre can support all your content, all the time. We’re ready. Are you?

 

Step 1: Bring the Right Players to the Table

Involving the right people is an important starting point, and it’s the same when you are getting started with NDC. Retailing in an airline or travel agency is not the responsibility of a single team. You will need to build cross-functional teams internally, bringing together people and departments who may previously have had completely different goals. Now is the time to align.

It’s important to talk to members of departments who wouldn’t typically help define the retailing strategy to understand the downstream implications of any decisions.

In April 2018, Singapore Airlines went through a commercial restructuring to align their sales and marketing teams to the customer journey. A pricing team sets optimal prices for offers, merchandising creates the offers and a channel distribution team distributes offers across all channels collectively. Charlene Wee, assistant manager of digital marketing and media planning shared, “By bringing our commercial teams under a single vice president, everyone has a shared vision, clearer handoffs and oversight over which area needs to step in to fulfill the customer journey.”

Birdseye view of boardroom desk, empty chairs

“By bringing our commercial teams under a single vice president, everyone has a shared vision, clearer handoffs and oversight over which area needs to step in to fulfill the customer journey.”Charlene Wee, Assistant Manager of Digital Marketing and Media Planning, Singapore Airlines

Airlines are already making progress bringing e-commerce, merchandising and distribution teams together. Mike Reyes, senior director of offer management for Sabre stresses that the next critical step is giving revenue management a seat at the table. “Bringing decision-support teams into the conversation ensures the retailing strategy considers how the offers are created in the first place,” he said. “As a result, the vice president of revenue management, who traditionally focuses on the pricing of a flight, starts to think about the downline impacts to agency partners and distribution contracts.

Bringing the right players to the table not only provides goal alignment, it ensures teams have an end-to-end view of the entire customer journey – from offer creation through fulfillment.

UCCESSFUL RETAILING BRINGS MORE TEAMS TO THE TABLE

 

Step 2: Align Your Strategy and Objectives

With the right players at the table, airlines and agencies need to define three strategies to support their NDC initiatives:

• A customer strategy that centers around the traveler
• A retailing strategy that focuses on intelligent solutions
• A technology strategy that supports integrated content

Customer-First Strategy

Central to any retailing strategy should be the customer, so it makes sense that the customer plays an important role to help you get started with NDC. The biggest drivers of change in the travel industry are the expectations set by non-travel experiences. Too often in travel, we make the customer book the way we need them to; however, to become an intelligent retailer, we need to understand how the traveler wants to book and then personalize that experience.

Customer centricity goes beyond retailing to distribution and fulfillment, so mapping the entire customer journey is vital. During inclement weather and other disruptions, airlines need to be able to seamlessly fulfill all the ancillary products and services they offer customers. In addition, agencies need to ensure duty-of-care responsibilities are maintained.

We spoke with the director of product at a global leisure agency partner who sees customer centricity as an opportunity the industry needs to collectively solve. While airlines and agencies vary in their approach and end goals, the one thing everyone has in common is the customer. Without a great customer experience, none of us can win.

When developing your customer strategy, determine:

  • What type of experience do you want to give your customers?
  • How can you make buying and purchasing travel as much fun as it is to experience the travel?
  • How can you drive customer conversion and loyalty?

To some extent, airlines have already achieved customer-journey mapping in their direct channels, but they need to partner closely with agencies to understand how this plays out in indirect channels. This is where our “Beyond NDC” approach takes your retailing strategy to the next level.

Intelligent Retailing Strategy

To ensure existing retailing and distribution strategies are aligned with the Beyond NDC world, airlines and agencies will likely need to change their approach and culture.

Airlines that aim to become intelligent retailers should:

  • Consistently review their performance to determine if they are optimizing the markets they serve
  • Evaluate existing products/services and understand performance
  • Leverage data around revenue for ancillary sales
  • Align offer/order management systems

Now agencies can present the same content that airlines have on their websites. This translates into a better customer experience, increased product knowledge and more customer options. But agencies must understand the retailing strategies of their airline partners. It is also important to consider the risk of not acting. “If airlines don’t move, they risk being passed by carriers that are much more effective retailers,” said Willy Goderis, principal consultant for Sabre. “Ultimately, they will be forced back into selling a commodity and competing on price rather than the entire travel experience.”

 

Step 3: Reach Outside Your Organization

“If everyone is moving forward together, then success takes care of itself,” Henry Ford.

While key players in the travel ecosystem continue to move at a different pace, collaboration and open communication between airline and agency partners is critical. It’s important to not only assess the maturity level and risk tolerance for NDC within your own organization, but to align that with your partners. Some airlines and agencies are already investing while others want to watch for proven success before making considerable NDC investments.

 

NDC Maturity and Adoption

 

According to McKinsey, approximately 70% of change programs fail in large part due to organizational resistance. Airlines won’t be able to scale their indirect retailing strategy without agency alignment, and agencies will struggle to communicate their value without the support of their airline partners.

Agencies need to define what success looks like for their business and present it to the airline. They should work with the airline to understand how NDC content will help them achieve their goals and how agency success will be recognized. The most effective airlines will work with their agency partners to help them understand that richer NDC content is not a process disruption, but rather a revenue-generating opportunity.

“Airlines will be engaging with agencies in a new way to fully understand the agency business strategy, their workflow and their day-to-day challenges.”Lisa Le, Practice Leader, NDC Consulting, Sabre

Ultimately, airlines and agencies need to innovate together, which requires behavior changes, to take advantage of the rich content NDC offers and provide the best product and service to travelers.

 

Step 4: Partner with the Right Technology Providers

Building retailing capabilities can be an expensive and long-term investment. Identifying opportunities that will drive revenue growth, increase your competitive advantage and form a stronger brand is essential. Sabre is prepared, as a technology partner to make your retailing strategy a reality.

However, this evolution to retailing will not be achieved overnight. Best practice is for airlines to take a phased approach to solution adoption, ultimately resulting in NDC-enabled offer- and order-management platforms. There are six key phases recommended to enable intelligent, personalized retailing:

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1. Strengthening the core — Start with an investment in core capabilities such as inventory controls, an ancillary platform and an integrated payment platform.

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2. Market and customer data — Personalized offers start with having a 360-degree view of customers. Marketplace data, for example, is a key source from the GDS that can be leveraged to gain real-time insight into passenger demand.

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3. Revenue optimization — Intelligent decision support is essential to creating smart offers. Pricing optimization determines the right strategic price points, taking into consideration passenger demand, willingness to pay and competitive positions.

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See Also
Business man in first class

4. Omni-channel digital ecosystem — When building your retailing ecosystem, think about implications for both direct and indirect channels. By leveraging microservices, you can drive consistent content and user experiences across all channels.

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5. Offer-management system — Inputs from market and customer data and decision-support tools power the shopping engine, with persona-based and ultra-fast shopping responses. Additionally, the rules engine executes on the offer then validates and stores.

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6.Order-management system — With an integrated order-management system, you can ensure offers are seamlessly fulfilled. In the event of irregular operations, it also offers the flexibility for orders to be changed or cancelled.

“Omni-channel means that all of your customer-interaction channels work together – it isn’t just enough that they exist. Per Sabre research, 98 percent of people shift devices, so the shopping experience can’t look different on each device. Customers want to pick up where they left off.”Lindsay Parker, Vice President Global Marketing, Sabre

Agencies, on the other hand, should look to their IT providers to ensure they can take advantage of NDC content while avoiding any disruption to regular service. The existing distribution standards are surrounded by a series of support and operational products and services that have been developed by Sabre and other GDS providers to support workflows in use by agencies today.

“To us, going Beyond NDC means protecting those valuable support and operational needs,” said Cindy Tonnessen, Senior Director of NDC, Sabre. Moreover, to achieve success, the several tenets of a travel agency must be considered:

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1. Active reservations synchronization – Agencies must be aware of changes to the PNR by the airline directly, and they must be fed back into the agency systems.

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2. Trip lifecycle management and duty of care – Agency and travel management companies (TMC) need to know exactly where their customers are at all times. In addition, ensuring duty-of-care needs are supported is key to our Beyond NDC initiative.

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3. Support mid-/back-office audit processes – Solutions that provide history of the actions and changes that have taken place and drive support processes such as invoicing, accounting, mid and back office, and receipts will continue with NDC content.

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4.Corporate policy compliance – Knowing this is also key to agency, corporations and TMCs, this element must continue with new distribution solutions.

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5. Comparison shopping – Customers simply want the best fares, so both traditional content and NDC content must be available in a single search to ensure that the best offer is obtained.

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6.Platform investments and scalability needs – We understand these new business requirements require significant re-engineering. They require a strong, stable platform and a long-term technical strategy with scalability to support evolving retailing offerings.

By partnering with technology providers and leveraging a phased approach, airlines can mitigate risk associated with large-scale IT transformation projects and allow for earlier value realization. For agencies, technology scalability and seamless integration with existing workflows helps ensure it’s business as usual.

Leading the Way

By getting started with NDC with these four steps, you will bring the right people around the table, have an aligned retailing strategy, collaborate with the right external partners and understand your technology needs. It doesn’t happen overnight, but with the right approach and partners, building NDC retailing capabilities becomes so much easier. In Chapter 5, our final NDC eBook chapter, we will examine real examples of how leading airlines and agencies are incorporating NDC initiatives into their businesses and bringing Sabre’s Beyond NDC initiative to life.

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