IATA NDC - Simlify the Systems

No, I am not a NDC expert and I am not a NDC consultant. But I have been following the evolvement of NDC over the last couple of months and spent hours reading documentation and news about NDC. In fact, anyone who is interested in NDC and wants to learn more about it will find very valuable information about it on the internet. I have found the IATA website to be by far the best source.

IATA has also spent quite some time of making very useful presentation and even video clips which they posted on youtube under https://goo.gl/FcZCl5. These videos are really great and easy to understand. I think they are of better value than hiring external consultants just to explain you what NDC is. Most of these consultants actually learned their knowhow from watching these videos. The videos I like most are those of Yanik Hoyles, Director, New Distribution Capability (NDC) Program at IATA.

Don’t get me wrong, I don’t make any money by saying good things about NDC. I have just realised that NDC is in fact the right track and the future of how suppliers in the industry offer and sell their products. There is no way around NDC. It’s the best thing that ever happened to IATA members and the industry.

However, and here comes my BUT, you are not going to save any money by introducing NDC. Well, not right away and it will certainly take some time until the fairytale becomes true. So whatever your consultant has told you, at the end of the day you’re not saving a single cent, at least not for now, but you can make more money, as you can, in theory, sell more – and more easily.

How’s that possible? Well, by introducing NDC you open yourself to new sales channels and upcoming sales platforms and aggregators. More systems will be able to distribute your product and you can pass richer and better customised offerings to your prospect customers. Just imagine what would happen if Google builds an interface to NDC – or facebook starts to dynamically advertise your product through your NDC channels. If you don’t offer a NDC compliant, or better certified, API, then you will be left out and no one will know about your product and no one will be able to book it, unless they follow the old sales channels like GDS.

So you can sell more through NDC and you can sell more customized offerings to your passengers as you can control what and how you sell.

However, NDC has its cost and complexity. You have to implement the interface, you have to operate and maintain the system and most importantly, you have to maintain and optimise your product offerings. These are additional expenses you will have and by introducing NDC the other distribution channels, such as GDS, OTA and others will not disappear or become obsolete. You will still have your GDS expenses as travel agents will continue to use GDS, unless there’s a comparable NDC aggregator platform available. You will still keep your existing interline and codeshare interfaces and you will still have to run a callcenter.

But the more you sell on NDC, the lower your average cost per booking will be. It has to be in your interest to push sales through channels which are cheaper for you. Remember the EUR 16 GDS surcharge Lufthansa introduced? The better you can control your distribution, the lower your cost will be. GDS will be around for the next 20 years, but with NDC you can offer a much cheaper alternative and at the end that’s what lowers your cost – not tomorrow, but over time.
The other issue with your cost is how your system provider implements and runs NDC APIs. They simply put NDC on top of your existing system. As such, in addition to the cost of your current PSS you will also have to pay for NDC. Problem is that these systems are not made for modern distribution channels. Lewis Hamilton wouldn’t win a single formula 1 race in a 40 years old car with a new steering wheel. And by maintaining the car only and giving it a fresh paint he would still be outperformed. The good thing for you is the fact that all of the current PSS providers run on old cars as well and some have promised to add a new steering wheel. So in terms of competitive advantage you’re not better or worse than all the others.

In order to really benefit of IATA’s initiative there needs to be a new breed of systems. IATA calls this “Simplify the Business”. But how can you introduce simplicity when you run on complexity. If you don’t get rid of complexity then simplicity is just a dream. My statement for today:

current systems are too complex to support simplicity

You can only benefit fully from IATA’s NDC and One Order with systems that are built from ground up to support the vision. Don’t believe your provider or consultants if they tell you that the world is too complex and cannot be changed. Providers don’t want change cause they made significant investments into their current platforms. Consultants don’t want to see change because they can only get business in a complex world. They want to scare you and so far they do a good job – and they can do that as long as there is no real alternative.

I don’t think that selling airline tickets is more complex than for Amazon selling their products. We all want to sell like Amazon but we can’t accept that Amazon is not using processes and architectures from a time when computers filled large datacenters and transistors produced more heat than your open fireplace at home.

So let’s just accept that the airline (rail, ferry, bus) industry is years behind the retail industry with eCommerce. But that doesn’t mean it has to be like that forever. If we want to support IATA’s simplify the business then we have to accept change, a massive change. It will happen, because it will lower the cost and because we need to make a big step forward. And thanks to IATA we know which direction to go.

Simplify the Business - Simplify the Systems

What if Amadeus buys IATA

Some of you have learned from my previous posts that I tend to be very direct and open and like to challenge the status quo.

So here’s my next challenge to the readership: Amadeus made some headlines recently due to the acquisition of other players – most notably Navitaire.

But what if Amadeus buys IATA?

In recent posts on various websites Amadeus challenged IATA standards. Standards, which help the airline industry and the consumers – offering new and optimized business processes for the future at a fraction of the cost of existing outdated processes and implemented on old legacy systems.

Wouldn’t it be convenient for Amadeus if they could set the standards themselves and implement whatever they think is best for their shareholders with a touch of “we do what’s best for the airline and consumers”? New standards like NDC and COT go against how GDS operate and how Amadeus (and other GDS) squeeze airlines. GDS don’t like to become obsolete. It is in their very own interest to delay the adaption of open standards such as NDC. Just imagine how much revenue all these GDS would lose if airline bookings bypass their big datacenters. Ohhh and btw stop arguing how important GDS are coz otherwise we wouldn’t be able to book HNL-KIX-MNL-HKG-TPE-SIN-KUL-PEK.
The overhead to keep GDS alive to book such itineraries every 15 years is just not justified.

In a recent post available on the internet Amadeus claimed that NDC is a failure because it was defined by IATA (and its member airlines) and that Amadeus would know better what airlines and consumers want. Or in other words – Amadeus does not want open standards they can’t control – or open standards which would offer airlines better choices, more flexibility and lower distribution cost.

What Amadeus wants is an Amadeus centric distribution world where Amadeus can control the business and due to its near-monopoly keep its shareholders happy and the airlines locked into a closed environment – sort of the Roman Empire of the airline industry. But we all know what happened 1539 years ago!

Alea Iacta Est

Yesterday it popped into my mind – out of a sudden – after mimicking George Clooney drinking a cup of Nespresso coffee. I’m going to build a new passenger services management system. First thing you noticed by now that my preferred drug is coffee and that I do not call the system a passenger reservation or a passenger services system. But I’ll elaborate about that a little bit further down.

Actually building a new system isn’t all that difficult – others did it as well or are still doing it. Some are successful, some fail. So my decision here is that I will not fail – and it’s all about making sure you’re intention is followed properly.

I have not given it a lot of thoughts, but so did they guys that started Uber or Facebook. And I don’t think Steve Jobs did think a lot when he broke into the Xerox Labs to copy the mouse and the graphical user interface. So let’s keep these guys in mind. Be open, think out of the box and copy good things from others but make it better.

So what does it take to build a new passenger services management system, in short … hmmmm … where’s a cool name? Maybe that’s the first thing I struggle with. All good projects start with a good name – a name representing your idea and a name which sounds good enough so it stays in everybody’s head. There was a company which called their system FACE, but they never got it to BOOK. Important is, that I don’t angry any nation and religion and it has to be politically correct. And the name should sound the same when used with any language. Since I have no idea at this point I simply call it “OOPS”. Worked with Britney Spears, so why shouldn’t it work for me.

Important first steps to make OOPS a success is to have a big and expensive corporate headquarter, lots of people, advisors, project managers and plenty of expensive giveaways, which somehow land in the pockets of the employees rather than with potential customers. Overhead and fancy parties are important as much as free food and offices that look like Google, and it shows – look at the current big providers. They are so expensive that some airlines have to add booking surcharges – but that would be another topic for a blog.

So let’s get real – I need a clear vision, a few smart people, uncommon ideas and a fresh approach. And to my advantage, I can learn from mistakes I have made building other systems – cause no one would ever do the same mistake again <g>

Seriously, building a new system is not that difficult, unless you make it difficult or you take it as difficult. “Ohhhh, this is so difficult and we will all fail” is probably the wrong approach to start anything like that. But then, and in reference to a previous blog of mine “Ohhhh, this is so easy, let’s buy 20 servers and get all the new cool technology” won’t bring you forward either. I’m not scared doing this and I have good and skilled friends available. So I’m pretty optimistic that it can be done. Not sure how long it will take as IATA is still working on defining all the new stuff under the Simplify the Business umbrella – and in fact any new system is all about that, besides making it more affordable and more fun to use and book.

I know I made you excited and you all want to know more about OOPS. Wherever and whoever you are, if you think you want to follow me or even participate in the next thing to come, then send me an email. Mind you that all mails such as “we are a professional outsource development company” or “dear beloved in the name of god I have to transfer US$ 8.5mio out of Nigeria, will you help me” mails will land in my junk mail folder.

I think I better get started, right after another cup of coffee.

Recipe for failure

I don’t know how it is with you guys, but when my wife asks me to go shopping for her, I usually end up buying all sorts of things, but not what she actually asked for. Ok, sometimes I do get a list of everything I have to buy, but even then do I think I need to buy additional stuff, things I like, things I regard as cool and of course all the new stuff – just to give it a try. Sounds familiar? Well, not sure if this is a man thing or because we tend to lose focus on what our wives actually asked us to do? Ending up with useless stuff and overspending the budget?
If you say – yes, I’ve seen that, then you most probably either worked as an IT solution provider or you’re a burned customer.

I spent my last 30 years in IT departments and IT companies and I’ve seen the same pattern over and over again – as soon these people here the word “new project with budget”, they go out and buy the latest servers, cool gadgets and fanciest development tools - of course including training for the whole team – and spend all day long thinking about how to overcomplicate the architecture for a simple business process. If it’s not complex, then it’s not sexy. The more complex you architecture a system, the less likely you can be replaced and the more likely they send you for another round of training just to understand yourself what you’ve actually architected.

I’ve seen projects where they started off by buying servers – without even knowing what the actual customer requirements are. But it was all about systems, systems and systems. Isn’t it a good feeling when walking through a datacenter and looking at all your servers blinking?
Unfortunately, most of the projects I’ve seen using such an approach failed – either they run out of budget – or they got so complex that they never managed to finish the development of the system – over time, over budget – not meeting customer requirements. At the end all they had to find is an innocent scapegoat – how about the cleaning lady?

So my advice to all the poor customers out there: keep the IT guys out until you have a clear view and detailed documentation of what you want. Focus on business processes, functionality and user interaction. Once you use the system you don’t really care if the server is blue or black, blinking orange or green – but the application has to do what you want. These days technology is commodity and as such should never ever – I repeat – never ever – be the driver of a system design, but an enabler only. Lock your doors, keep guys running around with J2EE polo shirts or jumping around full of Hadoop-joy out of your sight. Let them in once the dinner is ready – and make sure they behave well.

For the IT guys – and I’m one of them – if you present a solution using 20 slides and 18 of them are about the architecture and cool stuff of the system, then go back to the drawing board. No one cares about your libraries and beans except you, coz all you have to do is to translate the requirements into machine code – nothing else. And don’t expect that anyone will applaud you once you’re done. Coz even pilots nowadays don’t get that any longer for a safe landing. Programming was an achievement 30 years ago when every bit counted twice. Nowadays it’s about imagination and delivering systems that match or even exceed the requirements – on time and below budget.

The raise of the Order

Space, the final Frontier, we write the year 1988 as the by Captain William T. Riker commanded Federation Starship Titan …. Well, time is running. 27 years ago some of us got beamed up by Scotty to the new Fokker building in Amsterdam. We were on a secret mission called ‘Galileo’ and our assignment was to build a global distribution system, in short ‘GDS’. While I was there representing Swissair we also had members from Alitalia, KLM, United Airlines, Olympic Airways, Austrian Airlines, British Airways, TAP, IBM and Covia (United Airlines’ IT company). I might have forgotten to name some of the airlines – please forgive me.

Anyhow, it was the time when we were supposed to discover space, the unknown frontier of distribution systems. We all were full of energy, excitement and enthusiasm to achieve the unachievable. Hans Eisele, Walti Schärer, Urs Leimgruber, Stefan Märki, Peter Maurer, Anselmo Mazzoleni and others represented the crème de la crème of Swissair IT. I can’t remember what my initial assignment was but I was with a small team squeezed into a small office using IBM PCs running DW4 (IBM’s text system display write 4). In a later stage I was moved to the transaction manager design team led by Novak Niketic, a real expert and a person I learned a lot from.

My colleague, Walti Schärer, was assigned to a team that was supposed to look into the future of passenger name records (PNR) as some of the people believed that using PNRs was outdated and not flexible enough. That team had to come up with something completely different, sort of a key-differentiator to other existing systems and to add more flexibility to the way products and services are sold and to improve customer recognition. In the beginning this all sounded confusing to me as I was raised as a PNR-follower and I couldn’t really imagine life without a PNR. However, their task was really interesting and they all worked hard to invent a flexible and future-oriented solution.

After almost four months of design work they came up with something called “The Order”. Not a passenger name record, not a booking file but an order management solution, in short “OMS”. OMS offered a completely different structure without the hierarchy, limitations and inflexibility of a PNR. Products and services managed under an order where called order items or order positions and passengers became participants. The OMS was so flexible that it could handle dynamic packaging, tour operator products, non-air products and any other type of services. It was really impressive and the result was something the team could be really proud of.

Unfortunately, most of the ideas never made it into the Galileo System. The board decided to use the Apollo system as a core due to time-to-market and cost issues and only alter certain areas to turn a US-domestic CRS into an international GDS. Guess the pressure they had to launch a system was driven by the competition they had from Amadeus. Besides all the hard work, documents produced, data flow diagrams designed and the experience to build something completely new there was not much left. Some of us moved to lovely Swindon – I did - and others went back to their jobs back home.

27 years later, IATA, as part of its StB initiative, has started an initiative which will replace the PNR with something new, more flexible and more future oriented. The raise of “The Order”. While the initiative seems to come rather late, it is an important step into the right direction. It has to be seen if IT providers are able to transform their existing legacy systems and replace PNRs with Orders. Sounds easy, but of course there’s a lot more than just replacing one data structure with another one. Maybe it requires a more drastic approach and build new generation airline systems from ground up.

Some StB team members worked with me at Galileo. I hope they managed to keep the floppy disks.

OOPS - I did it again

As an engineer I’m not used to write public posts often, but I thought I want to share my views with the readership this time.

Anyhow, during the last two years I made approximate 100 flight bookings using one of the big passenger reservation systems. Whenever I made a booking the system stored my passenger and contact data as part of the booking. While I understand that contact information can change over time, the chances that I rename myself are rather low and throughout my 50 years of existence I have never changed my date of birth. So over time the system which I’m not going to name, as all the others do exactly the same, saved my data 100 times. Needless to say that with such a redundancy tracking individual information or getting decent marketing information out of it is almost impossible.

In order for the poor airline to track my preferences, feedback, complaints and travel history they have to invest in a frequent flier system. So all my personal information and the contact data can be saved in a central database, without redundancy. But even then, when I create new bookings all my information is copied over into the booking again and again … They would have thousands of HELLER/ROLAND MR somewhere in the database if they would not purge bookings out of the system after one year – mainly due to the limited disk space – funny, isn’t it.

Yet with all the information available and with, what they call, a ‘customer centric’ approach they still do not really know who I am and what I really like and dislike – except that I dislike having my name stored thousands of times.

On the other hand there is Facebook (and Google+, Instagram, Twitter, etc.). I have never made a booking on Facebook nor did I give them any money to fly me from A to B, yet they do know more than the airlines. Well, don’t think they know too much about me as I’m reluctant to be too transparent, but a lot of us upload their holiday pictures, hotel reviews and trip details and Facebook makes more money with all the data than the airlines we use to fly. Facebook has a big advantage: they don’t create a new profile for every picture and status I post, but they link everything back to a single profile. That of course gives them clear advantages and we all know how good they are in making use of it.

So why is it possible that Facebook can do what airlines cannot do? How can Facebook keep a single profile with cross-linked information but airlines need to have all the information copied into all bookings and then have to invest in Loyalty Systems, Data Warehouses or just stay blind. Why can’t airlines do the same? Why haven’t their systems evolved?

My only conclusion is that “we’ve done it like that for the last 40 years and this is how the airline industry works”. And the interesting aspect is that there are companies developing new systems, but they change the technology only and drag 40 years of legacy processes with them. Because people involved cannot break free and cannot think out of the box. Yet they spend millions in new technology – only the latest is the best. And they will always tell us why it has to be like that. Paper-based thinking in a digital world.

However, all these systems stick with their cores – “oh no we can’t change the core as it would generate too many issues”. So they simple take old processes, move them onto new servers, call these open systems, enterprise architecture, shiny mainframes, distributed computing – and keep on saving HELLER/ROLAND MR hundreds of times, but only for a year due to disk-space issues.

One year ago, when I retired and wrote my last line of commercial source code I said to myself that I will never ever develop a system again. But James Bond was right: “Never say never!”. Don’t get me wrong, the world does not need yet another airline reservation system – we have enough of them and some aren’t too bad – except for keeping my name – you already now.

So what I’m thinking of; if Facebook (and the others) can do what they do - why can’t a reservation system be like Facebook where people are identified once, can make bookings, buy services, contribute with information and participate in a more social experience – and even better – provide the airlines with an integrated view of their business and most importantly their passengers.

Welcome to “OOPS – I did it again”