NDC Change Readiness Guide

Transcription

1 NDC Change Readiness Guide Business Travel - The Travel manager - The Corporate Booking Platform - The Travel management Company Edition 1.0 Written & produced by Paul Tilstone & Aurelie Krau Festive Road

2 Table of Contents Foreword...3 Introduction...4 The Corporate Travel Need...6 NDC The Broad Benefits & Challenges...8 Change Readiness Guide...11 The Travel Manager Guide...11 The Corporate Booking Platform (UI) Guide...19 The Travel Management Company Guide...28 Getting Ready and Further Reading...37 Conclusion & Credits International Air Transport Association. All rights reserved.

3 Foreword TThe New Distribution Capability (NDC) will enable the travel industry to transform the way air products are retailed through the development of a modern, internet-based data standard for communications between airlines and travel agents. As a result, air travellers will benefit from greater transparency and access to all of an airline s offerings when shopping via a travel agent or online travel site, which is not the case today. And airlines will be able to present their products in an attractive manner, using rich content such as photos and videos in the travel agent channel, which today largely shows commoditized information including fares and schedules, with no product descriptions. For the business travel community, NDC represents a tremendous opportunity. Current processes make it difficult for travellers, corporate buyers and their travel agent partners to easily compare airline ancillary products and the full service options across multiple airlines. By enabling access to airline content that currently is available only on airline websites, NDC will add much more value to the services that agents provide to their clients and that travel buyers provide to their companies. To support the business travel community as the NDC standard is implemented, we have teamed with the business travel experts at Festive Road to offer this IATA NDC Change Readiness Guide. The document is divided into three sections to address the specific needs of: The Travel Manager (or corporate travel buyer); The Travel Management Company and; The Corporate Booking Platform (aka Self Booking Tool or User Interface) As the industry gains more experience with the NDC standard we expect to have opportunities to add more value to the Readiness Guide and we welcome your feedback and comments at [email protected]. Yanik Hoyles Director, NDC Program IATA 2015 International Air Transport Association. All rights reserved.

4 Introduction The NDC Journey Setting off in the dark IATA s New Distribution Capability (NDC) is a standard, first introduced to the world in October Since then the principle behind the standard has caused a lot of debate and acted as a catalyst for discussion about airline distribution in the travel industry. On August 6th 2014, the US Department of Transportation (DOT) granted final approval to Resolution 787 and on 1st September 2015 the first official set of NDC messages were published as an industry standard. We are now clearly entering a phase of deployment. By the close of 2014 a total of 24 pilots had taken place including some of the world s biggest airlines and travel IT providers. Details of these pilots can be found through links in the further reading section of this document. There are currently another 19 airlines who have announced they have plan to either pilot or deploy NDC in the near future. Are we there yet? Whilst the first transactions have been mostly undertaken in pilot conditions, IATA now expects an increasing number of live deployments to happen across a number of carriers. Because the standard is available to all the NDC schema has been downloaded more than 1,100 times to date and also some deployments have been underway beyond those known to IATA. What s clear is that there s significant interest and lots of work going on to understand and benefit from NDC. Adoption by some of the industry s leading airlines is on the horizon and yet work carried out by Festive Road suggests that travel managers, travel management companies (TMCs) and the technology which business travel bookers interface with (referred to in this Guide as a Corporate Booking Platform, but commonly called Online or Self-Booking Tools or OBT/SBTs) have yet to seriously engage with NDC, understand the opportunities and harness them International Air Transport Association. All rights reserved.

5 Introduction First one to see the sea wins! It s clear that most corporate travel managers, TMCs and SBT/OBTs to date are taking a wait and see approach whilst the first movers are behind the scenes preparing the road for the final and imminent stage in NDC s journey, its arrival! Festive Road s interviews of seventeen global travel managers also suggests that a significant proportion in the indirect channel are still yet to understand NDC and in some cases are fearful of what NDC will do because of negative opposition. In some cases the fact that NDC is a standard rather than a system even appears lost. understanding is causing those in the indirect channel to stand by and watch. But if you take the opportunity to assess what NDC is, what other supply chain participants plan to do with it and what it can do for your business, we believe you can overcome the challenges, take advantage of the benefits and provide more value to your customers (whether they be travellers, travel managers or the airlines themselves). This guide intends to help you to do just that. To get NDC Ready so you can plug and play enhanced airline inventory and get the most out of this industry standard. Much of the fear surrounding NDC from these stakeholders is based upon lack of knowledge and understanding of what the opportunity is. And whilst it s clear that there are plenty of challenges with implementing NDC, opportunities are plentiful too. This fear and lack of 2015 International Air Transport Association. All rights reserved.

6 The Corporate Travel Need In 2014 the airlines sold $38 billion in ancillary revenues *. This is a staggering figure and an increase of nearly 21% on Since increasing pressure was brought to bear on the airlines by global events, the rise of the internet and Low Cost Carrier airline models in the last 15 years, the focus on airline revenues through ancillary services has ensured the industry s survival. In some cases ancillary charging has allowed airlines to innovate and thrive as they develop new and exciting services. But the developments have come at a cost to those in the indirect channel and especially to the business travel community. Any organisation which spends money on sending its workforce out on the road knows that it can be a costly business. Business travel related costs often emerge as the fourth or fifth biggest cost to organisations operating in many sectors. And with a travelling workforce comes increased risks, to both the individual employee and to the organisation for whom they work. So it s not surprising that the priority of organisations with regards to their business travel are cost containment, traveller safety and reduced risk. The industry s indirect channel distribution of ancillary services, however, has been challenging for a number of reasons and this has meant that the end customers, those that pay the bills for corporate travel i.e. the organisation itself have seen an increasing fragmentation in distribution and a more challenging time in managing cost, risk and safety. What NDC will actually bring remains to be seen, essentially because it is up to all of us in the chain to decide our futures. IATA s work to define a clear pathway for each of the corporate travel stakeholders to establish what that future might look like is truly welcome. Jens Liltorp, Senior Category Manager, Travel - Novo Nordisk and Chairman, IATA Travel Manager Advisory Group (TMAG) * IdeaWorks 2015 Report International Air Transport Association. All rights reserved.

7 The Corporate Travel Need At the same time, the travellers within these organisations are experiencing a more obvious gap between the shopping experience within their leisure lives and their indirect channel business travel shopping experience. As one Travel Management Company leader expressed recently, in the leisure market if the booking experience isn t slick the shopper just goes elsewhere. In the business travel industry the incentive to invest in User Experience is perhaps not as strong as the traveller is mandated to use the product and if it doesn t work fully there s always the phone. ** This provides the travel manager within these organisations with an interesting dilemma. On the one hand they need to try and re-inforce the managed channels to retain cost control and reduce risks. On the other they are getting pressure from travellers to provide more of a leisure booking experience. ** Summary of comments by Evan Konwiser, VP Digital Traveler, Amex GBT courtesy of Company Dime interview The net result is the emergence of Open Booking, where travellers are free to book where they like as long as they provide data to the organisation. But as one leading Self Booking Tool CEO referred to it, Open Booking is failure dressed up as innovation. *** With NDC designed to bring an improved shopping experience into the business travel world, the answer seems clear. The indirect channel should work together to adopt NDC to provide the best of both worlds to corporate travel managers cost containment, reduced risk and an enhanced traveller experience. *** Dean Forbes, CEO of KDS, BT Show International Air Transport Association. All rights reserved.

8 NDC The Broad Benefits & Challenges But why do IATA and the airlines believe that NDC is the opportunity to breach this corporate versus traveller needs gap? The Benefits NDC is essentially designed to facilitate three things richer content, personalisation and ancillary sales. a.) Richer Content, the 4th dimension To allow the traveller and the corporation to make the right purchasing decision, tools effectively today provide a fare and a schedule. Airlines then re-inforce decision making through loyalty programmes. But the lack of product information at Point of Sale (PoS) leads to commoditisation and whilst you might expect those operating in travel procurement to be happy with this, in actual fact enlightened procurement professionals recognise that it is best value which is key, not lowest price. It could be argued that short-haul seats on different carriers using identical aircraft are commodities, that the experience isn t variable, however if one takes the broader picture and with the increase in ancillary services and the importance of punctuality and service key to the business traveller those of us that fly regularly know that this isn t the case, certainly for long haul but even for short haul flights. Richer Content will provide a fourth dimension to the decision making process through increased copy, imagery and video of the various airline product elements. This allows greater comparability of what you are actually buying if you have never experienced the product before. It also allows the traveller to better see what other products and services are available and how they might add value. The gap between corporate traveller expectations and what is delivered are increasingly challenging, and the internal voices we listen to are growing. What I see in NDC, if we all work together, is the potential to bridge that gap so that we may all be free to focus on where we can add more value to our companies. This Change Readiness Guide offers those who have direct contact with those corporate travellers a blueprint to start to build something better. Mark Cuschieri, Group Corporate Services - Global Travel Management, UBS and Chairman, Institute of Travel Management b.) Personalisation, getting to know you Using the type of data services the online giants of our day use, such as Google and Apple, the airlines are seeking to understand the individual traveller s needs and provide a International Air Transport Association. All rights reserved.

9 NDC - The Broad Benefits & Challenges more personalised service. This could mean simple recognition that the traveller is a regular customer, right the way through to tailored offers because the traveller is not a regular customer and the airline wants to attract them. But it could also mean that the travel manager or TMC identifies traveller needs through segmentation and works with the airline to provide customised air packages for specific traveller types. Maybe there s a traveller group within company X that always need a lounge, priority boarding and a chauffeur drive? NDC s personalisation capabilities would potentially allow negotiation of a tailored package and presentation of this package to the traveller through chosen channels. c.) Ancillary and Data Capture With the standard potentially used to drive ancillary bookings via the indirect channels for the first time, this allows the corporate to present all of the travellers shopping needs in their chosen channel. No more will the traveller be required to book their flight and then subsequently their seat or an extra bag via the airline website. In theory the additional, ancillary inventory will be captured at the time of the core booking and this means greater transparency of spend and improved data and payment processes. Each of the first two of these elements should naturally enhance the traveller s shopping experience and the latter provides enhanced corporate control but what are the perceived challenges to the organisation spending the business travel money? Perceived Challenges a.) Channel Choice the chosen channels for distribution made by the airline will determine the relationship the airline has with its enhanced NDC distributed content and the indirect supply chain and corporate travel manager. What is important to note is that NDC does not drive distribution channel choice by the airline, it is merely a vehicle for enhancing the content delivered through their chosen channels International Air Transport Association. All rights reserved.

10 NDC - The Broad Benefits & Challenges b.) Control The travel manager s fears are that richer content and personalisation will lead to a loss of control, in that travellers may be tempted to upgrade or purchase non-preferred airlines. What seems lost is that controls through TMCs and Self Booking Tools in the indirect channel would still ensure that only approved content is presented to the traveller. And the opportunity here is to move to a more dynamic policy whereby the travellers profile determines what they see and that profile is determined by segmentation according to their needs. c.) Anonymity & data With more information required by the airline to provide more personalised offers the fear is that increased personal and corporate data could become a real issue. The resolution which created the environment for NDC assures the industry that anonymity is a continued given right in any future fare requests. The challenge is that less data will mean less personalised fares and this could mean missed opportunity. Getting the data level right and maintaining control over the data provision is therefore important to all in the indirect channel. It is important to note that the airlines approval of Resolution 787, which sets out the terms of use of the standard, does not constitute approval of any agreement by IATA members to require the disclosure by any passenger of personal information of any kind and nor does it fundamentally change the question of data ownership. Data privacy is a critical element, and each user must ensure that usage of the NDC standard is in compliance with relevant data privacy legislation. But with these broad challenges and benefits in mind, we make the following recommendations to travel managers, TMCs and Corporate Booking Platforms who want to take the opportunity to become NDC Ready and create added-value to their clients International Air Transport Association. All rights reserved.

11 Change Readiness Guide #1 The Travel Manager For the purposes of this guide, a Travel Manager is defined as the primary person/persons within an organisation, which spends money on travel for business purposes, whose responsibility is to manage that expenditure and manage the processes and policies surrounding how it is spent International Air Transport Association. All rights reserved.

12 Specific Opportunities & Benefits to Travel Managers Segmentation of traveller needs within your organisation will allow the opportunity for company specific fares with primary airlines where volume occurs. Add lounge access, FastTrack security and an extra bag, for example, for staff visiting head office. Improved content through your chosen channel will help you reduce leakage and focus on the bigger travel management strategy rather than firefighting user experience issues. Ancillary products sold through the chosen NDC channel will result in greater capture of data on total spend on these products. This will result in a stronger position to present total airline expenditure during contract reviews and negotiations. With the dawn of ancillary service distribution through managed travel channels, the opportunity also exists for a wider bundling phenomenon if suppliers choose to move down this path, as experienced by the leisure travel sector during the last decade. The travel manager could develop the bundling of hotel, rail, car and other non-airline related services through packaging technology to provide a more seamless traveller experience and value to preferred suppliers. In some cases such bundling could result in overall lower prices, known as Dynamic Packaging. 5 6 With airlines reviewing their distribution strategy, discussions with carriers should focus on where NDC enabled content is best suited for the travel manager. This facilitates bi-lateral agreement on chosen channel choice, assuming the chosen channels can implement NDC. This puts greater authority and transparency in the hands of the travel manager to allow them to make decisions on which supply chain components add value. It s clear that the traveller profile (the traveller s details used to populate booking details) will be key to the provision of NDC enabled content and that management of profile information could bring great benefits. So this is an opportunity for the travel manager to invest in the enhancement and ownership of the traveller profile International Air Transport Association. All rights reserved.

13 5 Steps to NDC Readiness The Travel Manager STEP 1 Understanding The Need and Opportunity Take the time to understand more about what NDC will do read the Further Reading section and talk to the NDC Corporate Envoy. Assess whether you have the profile of travel programme which could benefit from NDC content. Ask yourself the following questions; Do you have sufficient volume and spend to take the time to develop the opportunities on the previous page? If you have a smaller travel spend then traveller segmentation and profile development may not provide an ROI. What is your spend type? If you book significant amounts of special or net fares because you are an energy & resources company or a charity or government find out what your airline will do about these. Assess your corporate culture and the travel programme issues. Is leakage an issue because of changing user demands, do you believe you spend money on ancillary services directly? Is the opportunity there for you to take advantage and fix issues? If you think that NDC presents an opportunity for your travel programme build an NDC Review Team. The role of the team will be to assess the impact of NDC and go through the next set of steps. The team would include those stakeholders normally in a Travel User Group (TUG) but may vary by company across HR, Security, Finance, regular traveller, travel booker, IT, marketing etc. This team may or may not include representation from your supply chain as you progress through the steps. Think about global regions which have more volume, relate more to the airline NDC implementations and should be focused on or will be easier to manage change with International Air Transport Association. All rights reserved.

14 5 Steps to NDC Readiness - The Travel Manager STEP 2 Undertake a Supply Chain Assessment Identify supply chain partners who could be impacted by and/or provide you with support to take advantage of the opportunity with NDC content. First and foremost talk with your key airline partners to understand their NDC timeline and distribution strategy. Assess how their business model is changing and factor this into the next steps and how NDC will be applied. You could potentially start applying questions specific to NDC capability or forward strategy in your annual Request for Proposal (RFP). Then talk with your technology providers Global Distribution System (GDS), Self-Booking Tools (SBT), data warehouse, security system providers etc. and assess whether they are NDC Ready. Also meet with your Travel Management Company (TMC) to assess their technology partner readiness and to make an assessment on impact on business processes. From data flows, to traveller profile usage, to content access and how richer content and personalisation will manifest itself in the TMC service offering to the end customers. Again, you could feature NDC related questions in your RFP if you are reviewing your technology or TMC providers. Finally, meet with other primary suppliers, such as hotel partners, with whom you believe there may be a bundling opportunity and lay the ground-work for the introduction of packaging with your technology providers. Assess the impact on your present payment solutions and any impact on the way you manage data as a company internally International Air Transport Association. All rights reserved.

15 5 Steps to NDC Readiness - The Travel Manager STEP 3 Define Business Case for an NDC Ready Programme Now that you have assessed the opportunity and impact on your travel programme and you understand the readiness and opportunity for your preferred supply chain, it s time to truly define the business case for NDC Readiness. This means defining in an articulate way the benefits & challenges of NDC adoption to your travel programme. State clearly what NDC is and how it will impact your programme. State why it is important to change and highlight the potential benefits. Create a burning platform to demonstrate what will happen if you don t do anything. List each component of your travel programme you want to get NDC Ready and assess the investment/time needed to develop it and what the tangible Return On Investment (ROI) measurements are. Examples of this are on next page. Define any key dependencies on the supplier/traveller community and highlight what the risks are. Assess the full investment and ROI and re-state the risks if no action is taken, allocating tangible costs if possible (greater leakage, reduced traveller satisfaction) Undertake an assessment of your team (including extended team members through SBT/TMC etc.) and any external resource needs/costs International Air Transport Association. All rights reserved.

16 5 Steps to NDC Readiness - The Travel Manager NDC READINESS ELEMENT NECESSARY ACTION / INVESTMENT TANGIBLE ROI MEASUREMENT NDC Ready Corporate Booking Platform (User Interface UI) Limited if Corporate Booking Platform (Self Booking Tool - SBT) is NDC Ready. Policy management of bundles/ ancillaries/personalised offers/ preferred suppliers. Assess capability for marketing messages in SBT RFP process if SBT is not ready. 1. Reduced leakage of X% 2. Improved traveller feedback scores 3. Income/reduced cost of $X for marketing messages in UI NDC Ready Endto-End Distribution Channel None if NDC Ready and API (Application Program Interface) capable (if airlines plan to use APIs). If not ready, undertake an RFP process if other NDC Ready channels are available. Consider investment in proprietary, flexible API portal if none available. Time spent discussing distribution strategy with key airlines 1. Full content leads to reduced leakage of X+% 2. Capture of ancillary data supports better negotiations by $x 3. Reduced distribution costs (distribution cost charge if applicable) Traveller Segmentation Exercise Cost and time to segment through research (internal or external research support costs) Negotiate bundled packages with major airlines Implement bundles into chosen distribution channel 1. Reduced costs of $X to business through bundled packages 2. Improved traveller feedback scores 3. Efficiency in Self-Booking Processof X% 4. Increase in TMC service scores International Air Transport Association. All rights reserved.

17 5 Steps to NDC Readiness - The Travel Manager NDC READINESS ELEMENT NECESSARY ACTION / INVESTMENT TANGIBLE ROI MEASUREMENT Develop Traveller Profile Capability Consider opportunity through airline discussion Assess price differential triggers Understand predictive profiling by airlines to help you to determine important profile attributes. Develop more detailed traveller profile Sense-check Data Privacy Secure enhanced data from travellers Ensure safe housing of profiles Ensure distribution channel links to housed profiles Monitor price differentials versus anonymous offers 1. Reduced costs of $X through personalised offers 2. Increased traveller satisfaction Review TMC Services To Support NDC Ready Programme Identify areas of TMC investment (traveller segmentation, bundle negotiation, profile development, User Experience (UX) testing, personalised v anonymous price monitoring) Identify areas of TMC saving (headcount through more efficient fare/ bundle provision, reduced fees through greater SBT adoption) Consider benefits of use of SBT by TMC reservations consultants to service travellers if SBT is sufficiently enhanced = consistency on and off line 1. Programme savings achieved through partner (TMC) investment & support of $X 2015 International Air Transport Association. All rights reserved.

18 5 Steps to NDC Readiness - The Travel Manager STEP 4 Communicate Effectively Meet with internal stakeholders to communicate the business case and seek approval. Focus on market dynamics, making the case for change and the return on investment. Communicate with key affected supplier partners the move to NDC Ready status (and maintain updates through project status summaries and even a Countdown to NDC Ready Status.) Communicate to internal customers on rationale, benefits and roadmap to NDC Ready programme. Maintain research on traveller satisfaction and use comparable analysis once NDC content is live to demonstrate ROI. Use Travel Association or other networks to benchmark project development and overcoming hurdles. STEP 5 Develop an Outline Implementation Plan & Team with the Right Partner(s). Once the right Retailing Mix is defined in Step 3, meet with TMC and/ or other retailing partners (such as corporate booking platform/sbt) to finalise the details of the implementation plan, support and develop timescales and deliverables. The Implementation Plan should include; Project elements as outlined in the Business case (Step 3) The creation of a cross-supply chain implementation team An NDC Champion to sign up to NDC Hub and updates Make initial contact with your NDC Envoy (See First Steps section) International Air Transport Association. All rights reserved.

19 Change Readiness Guide #2 The Corporate Booking Platform (User Interface -UI) For the purposes of this guide, the Corporate Booking Platform is defined as the technological user interface (UI) used by travellers and/or travel arrangers to make business travel reservations. This could be existing Self Booking Tools (SBT), Online Booking Tools (OBT) within the business travel market or booking technology which seeks to introduce corporate features to enter the business travel market International Air Transport Association. All rights reserved.

20 Specific Opportunities & Benefits to Corporate Booking Platforms (including SBTs/ OBTs) 1 2 NDC offers a wide range of retailing possibilities. For self-booking platforms, this involves the opportunity to develop new features to reflect the richer offer available using the standard. Developments may provide improved usability and thus drive greater adoption. With the new standard, you may have to think about how the User Interface (UI) may change in order to integrate rich content. This is an opportunity to provide an enhanced shopping experience to travel bookers (who can be either the travellers or travel arrangers booking on behalf of the traveller). You may also have to think about how NDC can enhance the shopping and booking process, especially in a context of consumerization where users are influenced by leisure booking platforms offering a lot of flexibility. Users want an intuitive booking tool, they look for more customized and personalized content, they expect perks for frequent travel and are eager to use on-the-go services. NDC may help you better to meet their demand. NDC will give you the opportunity to enhance service to the corporate travel manager. First of all it will give them the ability to integrate ancillary services. Airlines offers will be enriched. NDC will enable users to book ancillaries directly in the booking flow, whether bundled or unbundled. This provides benefits to SBT corporate customers, the travel manager. It offers a) a onestop-shop, b) avoids separate bookings and multiple payments, c) less leakage, d) an enhanced user experience, and e) a better productivity. Because NDC will result in a richer offer, you have the opportunity to build intelligent fare search and comparison modules to support travel managers and travel bookers to shop and book the best deals as per their company policy. Comparing apples with apples whilst ensuring product attributes are featured is the goal International Air Transport Association. All rights reserved.

21 With NDC, you will get enhanced data, which offers the opportunity to build advanced reports in order to provide travel managers with better visibility on spending and better control of costs. Thanks to this visibility, SBTs become even more valuable in supporting travel managers with their airline negotiations and delivery. As better data reconciliation is facilitated by NDC, it allows them to negotiate bundled and more relevant fares. The SBT becomes more valuable to the corporate travel manager as a method of delivering these negotiated deals in an effective manner. 3 As a new standard enables technical developments, the creation of new sources of revenues is a natural additional potential benefit. Firstly, if an SBT provides a better service, it could charge higher fees. Secondly, richer marketing platforms allow airlines to market and promote and this can mean additional revenues. Thirdly, SBTs could charge customers for new or customized content and for specific modules or profile management. Fourthly, there may be additional revenue in the increase in sales of additional services (such as chauffeur drive, hotels etc.) or the booking of airline ancillary services (bags, seat allocation, lounge access etc.) either through supplier deals or corporate transaction or management fees. Important note: the steps to NDC Readiness will differ whether you already have the capabilities and are an existing stakeholder among corporate booking platforms, or if you are a new entrant and want to build them. In any case, corporate booking platforms have the opportunity to drive innovation in air retail by becoming NDC ready International Air Transport Association. All rights reserved.

22 5 Steps to NDC Readiness Corporate Booking Platform STEP 1 Consider Your Appetite for NDC Take the time to understand more about what NDC will do read the Further Reading section and talk to the NDC Corporate Envoy. As a corporate booking platform you are the delivery mechanism at the heart of the indirect, travel management ecosystem: GDSs, other aggregators as well as airlines directly provide you with content. TMCs resell your solution and leverage efficiencies. Travel managers/ buyers and travel bookers use your platform to manage and book travel. So it s important to engage with all parties to understand the need and opportunity. First and foremost, engage with your major airline partners: 1. Assess their understanding of NDC and their intention to adopt the standard. This will determine the speed at which you may wish to pursue NDC Readiness yourselves. 2. Assess how they might take advantage of the opportunity NDC presents. 3. Understand their NDC timeline and distribution strategies. Talk with your IT partners Global Distribution Systems and other aggregators, data warehouse, security system providers etc. and assess whether they are NDC Ready and any process implications. Their readiness will determine speed of adoption. Talk with your agency re-sellers Discuss NDC with your Travel management Company (TMC) partners. Understanding their interest in NDC will help you assess the potential for co-ordinated and common NDC enhanced services to the customer. E.g. better traveller profile. Talk with your travel buyer/travel manager customers and assess their interest for NDC, their maturity, and their needs. Ask them if they have already talked with their TMC about NDC, and if they are prepared to pay for enhanced services and highlight the opportunity for travel managers to gather better data and reduce costs International Air Transport Association. All rights reserved.

23 5 Steps to NDC Readiness - Corporate Booking Platform Then, consider the following: Do you have the appetite for NDC readiness? What is the risk if you don t implement NDC? How does NDC fit your existing IT development roadmap? How might you leverage NDC? Can you develop revenue opportunities created by enhanced services? Ask yourself what types of new modules/features could you sell which you don t now? If you think that NDC presents an opportunity for your company build an NDC Review Team. The role of the team will be to fully assess the client need, financial opportunity, impact of NDC on processes and relationships, identify talent gaps and to go through the next set of steps. STEP 2 Undertake An Impact Assessment Assuming your work in Step 1 defines an opportunity for you to benefit from NDC you must now consider your present operational and IT infrastructure and perform a gap analysis on your ability to provide innovative features. If you are a new entrant or a Leisure booking platform looking to adapt to the Corporate market and apply NDC, you will need to think first what type of corporate controls/policy rules are needed in your booking engine to support the travel manager. The very nature of technology development may mean that you choose to switch the order of some of the following steps or run them in parallel development by different teams. Think about the following as an example: Assess the level of complexity added through the provision of rich data. With NDC, the way content will be provided to travellers through the booking platform will change. From a User Interface perspective, rich data makes the shopping process more complex and has impacts on the display of offers: Consider how to display ancillaries? How to integrate them in the booking flow? How able are you to handle different levels of NDC integration as each airline is free to adopt NDC in their own way. For example airlines may implement the NDC schemas for one or all of the following aspects: Shopping (including richer content, bundled fares and additional ancillaries). This is referred to as Offer Management. Booking & Servicing The first phase of the Order Management process. Payment & Ticketing The final phase of the Order Management process 2015 International Air Transport Association. All rights reserved.

24 5 Steps to NDC Readiness - Corporate Booking Platform Have you anticipated channel management variances? As airlines may have multiple routes to distribute their inventory and travel managers may determine preferred channel you will need to be ready to handle NDC capabilities through a variety of preferred channels. How ready are you to read different NDC messages? Identify the impact on your data model as messages that you ll receive will be different from your existing formats. Think about how ancillary services and bundled fares would feature in: Display of offers (shopping process) Booking confirmations Itinerary Passenger Name Record (PNR) Back office and invoice procedures Reporting capabilities: adapt your reports so that they reflect the new offer and so that it is possible to track ancillary bookings. This will be useful to a) track sales and savings b) help buyers to negotiate with airlines based on the bookers behavior). NDC offers the ability to drive more personalization (managed in compliance with you by your customers travel policy limitations). You should consider the increased importance of traveller profile information in this process. Consider the balance between maximising information to leverage personalisation versus compliance with data privacy laws and regulation. Assess the financial implications: Consider the financial impact of building a more flexible content platform and accepting several distribution channels i.e. airlines APIs and aggregators APIs. Think about how you can liaise with the industry to maximise best practice and reduce costs to your business. Consider how your present revenue model might alter as a result of potential changes to airline overrides and/or distribution technology agreements? How will you be incentivised to sell ancillary services? STEP 3 Develop an Outline Business Case for NDC Readiness NDC offers feature development opportunities. You should break down the opportunity into key features and consider the opportunity and challenges of each in detail and what the Return on Investment might be to build a business case for NDC Readiness International Air Transport Association. All rights reserved.

25 5 Steps to NDC Readiness - Corporate Booking Platform FEATURE DEVELOPMENT Improved Usability Through Rich Content and Personalisation FEATURE CONSIDERATIONS Building a new UI Consider costs associated to development and user testing Review data model so that data is reflected in both shopping and booking process, and in reporting Enhance policy rules Enhance traveller profile FINANCIAL RETURN TO YOUR BUSINESS 1. Increase adoption rate by x% results in greater transactional income of $Y 2. Increase traveller satisfaction by x% results in increased revenue from new business and/or increased charges of x% 3. Increased transactions results in greater financial leverage with suppliers Enhance Existing Service Features to the Corporate Travel Manager and Develop New Service Features (New Revenue Opportunity) Need to build-in corporate specific, bundled fares Management of connectivity/ sources of content on an individual basis (i.e. for each airline) Provide intelligent search modules: anonymous vs. personalized search to test the effectiveness of personalised fares and to compare fare types across all airlines and to find the best fare available, regardless if the user is identified or not by the airline Cross selling capabilities to drive more sales Build inter-modality features and extend bundles (product assembling) to other services (hotels, transfers, rail). Service/support in managing new content. Marketing messages displayed by airlines 1. Drive sales of ancillary services by x% with income of $y 2. Increased efficiency in fare search and fare comparison leads to reduced customer and/or TMC headcount of x% Results in savings incentive share of $y 3. Helps realize $x savings for Customer in fare and/or deal savings- results in Savings Incentive share of $y 4. Long-term reduction in distribution costs by x% 5. Income of $x from cross selling 6. Income of $y from rich marketing messages displayed by airlines 7. Income of $z from new content Service support 8. Income from new, enhanced modules of $x 2015 International Air Transport Association. All rights reserved.

26 5 Steps to NDC Readiness - Corporate Booking Platform STEP 4 Educate and Communicate As an IT provider you have the opportunity to drive tangible innovation and to guide your stakeholders. First of all, you should build a communication plan. You should make your ecosystem aware that IT development requires time, and emphasize following points: Technological development needs proper testing. Highlight the reason for your investment in technology and the potential value for your customers: Richer offering. Enhanced user interface and thus enhanced user experience. Better data so advanced reporting capabilities that will grant them a clear visibility on their spending on ancillaries. Better data to support them in their negotiation with their airlines partners. Potential savings Be clear about what you intend to achieve: Build release notes to educate users and help them get prepared to your functional changes Communicate on your timelines and next steps Specify what your dependencies are e.g. a particular airline or customer going live with NDC by X date. Consider building a traveller/travel booker user group with representation of your client base to support you in the development and in the testing of new NDC related features. This initiative would a) guide you in your developments to make sure they are compliant with what the users want ; b) engage your customers and drive more adoption; c) attract new prospects. You should also consider whether users that you will select should be specific TMC related (and therefore undertaken in conjunction) or across your broad base? Once you have implemented the standard, you should consider the following communication strategies: International Air Transport Association. All rights reserved.

27 5 Steps to NDC Readiness - Corporate Booking Platform First Mover Advantage Opportunity to drive innovation and drive the future of air retail as an early adopter. Industry Engagement - Attend and participate in industry events such as hackathons, watch and liaise with start-ups and developers communities. Influence - Engage in conferences to share your experience. Advocacy - Booking platforms have an important role as being the corporate traveller s primary platform to book a trip for business purposes. Use this position to gain greater engagement with airline developments for the corporate sector. STEP 5 Develop an Outline Implementation Plan & Team with the Right Partner(s). Once you have engaged in dialogue with all your partners and worked through steps 1-4, put together an appropriate team (or teams) and consider the inclusion of customers and key partners (such as TMCs or technology partners) Review your User Group results with clients and leadership and identify desirable service enhancements. Finalise the details of the implementation plan for enhancements. Include revenue goals, investment, leadership, staffing, roll-out, timescales, sales training, pricing model etc. Make contact with IATA (potentially through the NDC Corporate Envoy) to seek their support Continue to communicate with your stakeholders International Air Transport Association. All rights reserved.

28 Change Readiness Guide #3 The Travel Management Company (TMC) For the purposes of this guide, a TMC is defined as a business travel agency which provides a reservations service for airline bookings and additional support services, which may include management support to the travel manager. It also includes agencies which provide off-line reservations support to SBTs and OBTs International Air Transport Association. All rights reserved.

29 Specific Opportunities & Benefits to Travel Management Companies (TMCs) 1 Since the dawn of corporate travel fees and the term Travel Management Company emerged as intermediaries moved from acting as the agent of the airline to the partner of the corporation, and the acronym BTA (Business Travel Agency) faded, the TMC has worked to create more service value. But procurement and distribution fragmentation have posed considerable challenges. The potential for personalisation and the segmentation of travellers by corporations in order to leverage NDC for a better business travel shopping experience creates a variety of business service opportunities for the TMC community. Marketing & Communications Support for Corporate Clients The TMC can assist the corporation in understanding their traveller needs and defining them to assist in the creation and selling of tailored fares in an enhanced shopping environment. Further support can be provided by TMCs in onward communication to travellers as new bundles, tailored fares are created for their clients. Special Fares For Individual Customers The same segmentation could be applied to the TMCs SME customer base, those that are too small to negotiate with the airlines, in order to provide an enhanced retail experience through the TMC. This would potentially result in better service, increased sales and higher fees. TMCs could negotiate their own special fares for their larger customers too if they take the initiative. Traveller Profile Management As we identified with the Corporate Travel Manager, the management of the individual traveller profiles will gain in importance and many of the TMCs have invested in independent mid-office systems to house such profiles. Creating services around enhanced profile management would allow the outsourcing of this function by the client and potential revenues for the TMC. Tailored & Bundled Fare Negotiation Support with traveller types 2015 International Air Transport Association. All rights reserved.

30 2 defined the next step is to negotiate enhanced fare types with the airlines. TMC support in this negotiation, and benchmarking/lessons learnt from other similar client activity, seems a natural next step for the TMC if they can add value to the client. Enhanced Management Information One service area for development might be the creation of a regular/independent audit of fares to benchmark fares provided through personalised shopping versus those provided through anonymous shopping. This would ensure an ROI measurement to the corporate client on using enhanced traveller profiles and investing in tailored & bundled fares. By becoming NDC ready, the TMC can take the broader role of supporting the chosen corporate customer s distribution channels. It could offer NDC ready GDS and/or if the corporation wishes to explore direct APIs or other variations the TMC is both ready and able to work in any capacity the client needs. 3 With the combination of an enhanced shopping experience and the ability to tailor distribution platform by client (in the case of larger customers) the TMC has the ability to focus more on two core areas of service. At the Point of Sale (PoS) the TMC can focus on enhancing the way the client is serviced by talking from a position of product knowledge or focusing on other areas of service. On a more macro perspective, if we can say that NDC readiness will reduce fragmentation and enhance compliance and data then the TMC has the opportunity to focus its support on servicing the big travel management issues strategy, risk, communication, managing demand, mobility, technology etc International Air Transport Association. All rights reserved.

31 5 Steps to NDC Readiness The TMC STEP 1 Consider the Fit to Your Business Take the time to understand more about what NDC will do read the Further Reading section and talk to the NDC Corporate Envoy. In particular check out the IATA FAQ for TMCs. Look at your client base and assess how they might take advantage of the opportunity NDC presents. Ask your leadership team the following questions; What type of client-base do you have? How might they wish to adopt NDC? (See Travel Manager Readiness Guide) What special airline requirements do your clients have which fall outside or regular fare types i.e. Marine, Media or Missionary Fares Will your present distribution base be NDC Ready? This will determine the speed at which you may wish to pursue NDC Readiness yourselves. Do you have all the talent you need to create NDC Ready services? If not, what are the gaps and how might you find them recruit or outsource. Consider how much IT capability you possess to understand NDC, define how you might leverage it and work with your distribution partners. Think about how you might use them to develop better traveller profile or data technology. If you are a global TMC, think about any regional variances related to your client base or the likely NDC airlines and their target markets. Consider the revenue opportunity of these enhanced services and what types of ancillary services could you sell which you don t now? How much appetite do clients and airlines have to pay for services? If you think that NDC presents an opportunity for your company build an NDC Review Team. The role of the team will be to fully assess the client need, financial opportunity, impact of NDC on processes and relationships and to go through the next set of steps. The team would naturally include the functional heads of your business but you may wish to bring in outside expertise if you plan to re-structure significantly. This team may or may not include representation from your customer base or supply chain as you progress through the steps International Air Transport Association. All rights reserved.

32 5 Steps to NDC Readiness - The TMC STEP 2 Undertake an Impact Assessment Identify supply chain partners who are planning to adopt NDC and engage with them. First and foremost find the right environment to talk with your key airline partners to understand their NDC timeline and distribution strategies. Try and understand the business models of your primary partners and assess how they might be changing. Then talk with your technology partners Global Distribution System, SBT, data warehouse, security system providers etc. and assess whether they are NDC Ready and any process implications. Their readiness will determine speed of adoption. On the basis of these you now need to make a detailed assessment on the impact on your business. Consider your present operational and IT infrastructure and perform a gap analysis on your ability to provide what your customers will want. Think about the following areas; How content will be provided to your reservations consultants and direct to travellers through SBTs. If the fare offer is to be generated by the airline does this mean less work for you but less control by you over the fare structure? If tickets are issued by the airline this could be great as it means no ADMs, but will data flow different? How you will develop your reservations consultants to use NDC enabled applications. Will they need training? If so, what type sales, systems? Are there external budgets for this? How will the airlines support this? How capable is your communications technology platforms to deal with a dramatic amount of increased, richer content in video and photo form. What about those of your clients? How ancillary services and bundled fares would feature in; > > Enquiry s to clients > > Booking confirmations > > Invoice procedures > > Management Information How you will manage and enhance traveller profiles to facilitate personalised offers and how you will get the enhanced data from travellers ensuring that data laws can be adhered to International Air Transport Association. All rights reserved.

33 5 Steps to NDC Readiness - The TMC Will the process for making ticketing changes alter at all once reservations have been made? How you can support the corporate buyer by auditing the personalisation effect on fares and build Personalised Fare Audit reports and processes. If you are proceeding to NDC Readiness, decide if you wish or need to review any suppliers/technology partners which are not preparing for NDC Readiness. Assess the impact on your present payment solutions and those of your customers. Will ancillary services go through BSP? Do you have the capability to track ancillary bookings for your customers and for financial incentives with airlines? Assess the business opportunity with other supplier types in creating bundles and in the up-selling of ancillary services. Consider the need for an ATOL license to financially protect your business and the clients for packaged services. Assess how your present revenue structure might change as a result of potential changes to airline overrides and/ or distribution technology agreements? Will you be incentivised to sell ancillary services will it contribute to Sales & marketing Agreement (SMA) targets or be on commission or fee basis? How will your support for preferred airlines change? How will it affect airline sales team visits into your offices to meet with reservations consultants? Can you devise a streamlined product update process so that your teams know about and can offer new products quicker? STEP 3 Communicate, Communicate, Communicate. Now that you have assessed the opportunity and impact on your clients and processes and you understand the financial and business process implications, it s time to communicate the move to NDC Readiness. As the key corporate travel manager partner this part of the process is vital to success. This means defining in an articulate way the benefits & challenges of NDC adoption to; 2015 International Air Transport Association. All rights reserved.

34 5 Steps to NDC Readiness - The TMC Your staff Your customers, and Your suppliers The broader industry (and potential customers especially) In particular identify some of your corporate clients who are willing to support your development and potentially act as pilots. Identify areas for pilots with each of the customers Build a pilot working group (PWG) to help gain consensus and to develop communication to your other customers. Consider the role your corporate booking platform partner might play in such a group. Communicate to your customer base about the developments and the experience of the PWG. Bring customers into a client forum/conference to help them understand NDC and what you re doing. Consider the implications to broad and specific client travel policies and the associated processes. In all your communications; State clearly what NDC is and how it will impact your clients programmes and your business. State why it is important to change and highlight the potential benefits. Be clear about timelines and next steps. Create a plan which shows what you intend to achieve, by when and what the dependencies are e.g. a particular airline going live with NDC by X date. STEP 4 Develop An Outline for NDC Servicing Pilots NDC offers the opportunity to create new services to support the corporate travel manager. The next step is to outline which of these services is attractive to your customers and their willingness to pay. Build a pilot programme and consider the opportunity and challenges of each in detail. It is also important to define what the Return on Investment might be of these Servicing Pilots to build a business case for NDC Readiness International Air Transport Association. All rights reserved.

35 5 Steps to NDC Readiness - The TMC NDC SERVICING PILOT SCOPE PROPOSED PILOT OUTLINE FINANCIAL RETURN TO BUSINESS Traveller Segmentation Support Leverage traveller type knowledge and provide research and marketing guidance on traveller needs Identify package types Support with negotiation of bundled packages with major airlines Implement bundles into chosen distribution channel 1. Increase in service KPIs leads to higher service value and fees of x% 2. Fees of $x from segmentation Exercise support 3. Fees of $x from negotiation and fare loading support Develop Traveller Profile Capability Consider need of customer and benefit Support analysis of price differential triggers (loyalty cards, social media, status etc.) Develop more detailed traveller profile platform Ensure Data Privacy & safe housing of profiles Source enhanced data from travellers Ensure distribution channel(s) link to housed profiles Monitor price differentials versus anonymous offers 1. Savings Incentive Scheme revenue of $x through reduced offers versus standard offers 2. Increased efficiency in fare search time = greater margin or reduced headcount and a saving of $x 3. Personalised v anonymous fare audit income of $x Review Data Flow To Track Ancillary & Bundled Sales Negotiate deals with airlines on ancillary and bundled sales based on customer base Identify areas for review in existing financial tracking and Management Information (MI) systems Identify different types of bundles and ancillaries to track and test tracking in pilot 1. Tracking systems in place results in better SMA deals of $x 2. Maximise financial deals once set in place x% efficiency 2015 International Air Transport Association. All rights reserved.

36 5 Steps to NDC Readiness - The TMC NDC SERVICING PILOT SCOPE PROPOSED PILOT OUTLINE FINANCIAL RETURN TO BUSINESS Develop Other Revenue Opportunities Meet with other primary suppliers, such as hotel partners, with whom you believe there may be a bundling opportunity and lay the ground-work for the introduction of dynamic packaging with your technology providers 1. Opportunity for $x commission and/or incentives or increased revenue through fees earned from increased sales to clients Develop Enhanced Communications Platform Identify appetite for enhanced communication by clients and set out business case for them (drive sales of bundled products, increase compliance & traveller satisfaction) Review products which will allow enhanced communication to travellers. Devise pricing model incl tiered levels (standard communications on traveller messaging, enhanced communications plan, fully customised & white label) 1. Revenue of $x from fees to Corporation for communications support 2. Revenue of $x from shared savings scheme or increased compliance KPI s STEP 5 Develop an Outline Implementation Plan & Team with the Right Partner(s). Review Pilot results with clients and leadership through Pilot Working Group (PWG). Identify desirable service enhancements. Review Pilot results and PWG feedback with related partners (such as Corporate Booking Platform) Finalise the details of the implementation plan for enhancements. Include revenue goals, investment, leadership, staffing, roll-out, timescales, sales training, and pricing model. Continue to communicate with your stakeholders (Refer to step 3) International Air Transport Association. All rights reserved.

37 Getting Ready The Concierge Service If you wish to become NDC Ready why not take the first step by contacting IATA s NDC Corporate Envoy. The NDC Corporate Envoy is ready to talk to you and help you define what your next steps should be and to ensure you are connected to the right people at IATA s NDC Project Team. Contact [email protected] 2015 International Air Transport Association. All rights reserved.

38 Further Reading There s plenty to read about NDC as the subject has been central to much debate over the last 3 years, but we have tried to produce a list of further reading as part of your next steps which will focus on the facts and the real opportunity & challenges rather than hyperbole. Dawn of Quality Based Travel Sourcing Scott Gillespie Blog IdeaWorks Report on Airline Ancillary Sales Skift.com Feature on IdeaWorks Report on Airline Ancillary Sales NDC WebPage Resources Resources Papers, reports and Case Studies on NDC Video # 1 Introducing NDC, Why NDC? Video # 2 Introducing NDC, What is NDC (Part 1) Video # 3 Introducing NDC, What is NDC (Part 2) Video # 4 Introducing NDC, Who will benefit and how? Video # 5 Understanding NDC, Shopping & Ordering Video # 6 Understanding NDC, Interlining Video # 7 Understanding NDC, Operations Video # 8 Understanding NDC, Industry Settlement Video # 9 Self Booking Tool Demonstrator Global Travel Manager Perspective & NDC NDC: Travel Agencies Enabler to Success NDC Perspectives Self Booking Tool Demonstrator Gap Analysis & Opportunities NDC WebPage 2014 Pilot Report Company Dime Podcast Traveller Centricity The NDC schema a description All above links are available on the online version of the NDC Change Readiness Guide on International Air Transport Association. All rights reserved.

39 Conclusion Like all journeys, it takes a first step to start making your way. But before you take that step it s important to understand what NDC is and what it can do for your business. These three Change Readiness Guides have been specifically designed for each of the stakeholders in the Indirect Channel for the business travel sector. They may not encompass all of the things you need to consider in order to take advantage of an NDC world, but we hope that they give you some clear direction on the pros and cons of going down an NDC Readiness route and some of the really important things you need to be thinking about. What each of you and your companies do next will vary and that s the beauty of a free business market. The same, of course, applies to those who conceived of the NDC standard in the first place the airlines. And that s why, you ll notice, the importance of dialogue with your major airline partners and other key supply chain components features heavily in each of the Change Readiness Guides. Understanding business model changes and strategy of those with whom you trade and those of whom you service is vital in order to develop opportunities. The authors of this paper, who have had the luxury of independent dialogue with all the stakeholders concerned with NDC, believe that those opportunities exist and are ready to be taken advantage of. Whether you take the decision to go on the journey is down to you. The IATA NDC Change Readiness Guide for the Business Travel Industry was written and produced by Festive Road. Paul Tilstone, Founder & CEO Aurelie Krau, Associate International Air Transport Association. All rights reserved.

40 November 2015