Data & Analytics: The top 5 opportunities for the Travel Industry
We have all travelled via bus, coach, train, plane, automobile, boat, camel (well some of us)! This has been accomplished by booking online, been drawn to the right deal by an aggregator, walking into a travel agency and booking with a desk agent (boy I can’t remember the last time I did that!), or booking through a call centre to get the special deal of the day and on it goes. The one thing that is a constant in all of those instances (apart from the camel unless it was digital), is the amount of data that is offered, generated, consumed, collected and so on.
The travel industry like many others have amassed an inordinate amount of data on their consumers, flights, hotels, experiences, loyalty programmes, complaints etc.
So what are the current challenges that the travel industry like most other industries have?
Too much data
A lot of data in old (legacy), and the newly purchased systems the data typically sits in separate (or siloed) systems that don’t speak to each other, and in some cases are difficult to extract data from. This throws up a lot of issues with chucking cash at suppliers to provide data sets that can come at a premium particularly with the legacy systems. Or spending inordinate amounts of time in-house to create platforms instead of buying them to extract and transform this data, or taking small incremental csv extracts and attempting to couple these with other data, which can become a manual intervention where people are tied up undertaking these challenges instead of doing their day jobs. The list goes on and on and it’s not the first industry to come up against these issues. Inevitably, any which way you look at it, this will lead to even greater challenges with getting IT architectural consistency and ensure that the old and new systems are efficient.
Little or no Data Governance
On the back off the last point another challenge with data is the lack of standards and governance applied across organisations to data and its integrity. If data isn’t standardised in the right format for consumption and usage across analytics applications, let alone the running of algorithms, then the output will be corrupted and the wrong decisions will be made. This mish mash (an extremely technical term) of data if it isn’t set-up in the right manner and not cleansed will be inadmissible in court – defunct and will essentially affect the decisions that are made. Not only will it be bad data, but, when the company realises that something needs to be done about the data, the exercise becomes too costly and in most cases no one wants to undertake an expensive and laborious data cleansing exercise.
Who can help me – is that a unicorn I see?
Data and analytics skills and the pending shortage of the right people to do the job is becoming more and more expensive. Many people are attempting to find unicorns that essentially don’t exist (the only one I know is in the Dora the explorer cartoons – the benefit of having children!). It is very difficult to find the right person who has the business awareness, the statistical and maths background, the ability to interpret the data, to communicate by telling the story in the data – the list is endless.
Get me the technology – now!
A lot of companies will know this one. It’s called “chucking technology at the problem” – typically bought on by the fact that the latest and greatest technology fad will fix the problem. This will always be the one thing that can be a constant when a new concept like Big Data or analytics comes to the fore. Every industry is laden with this issue and we have seen this countless times with ERP, CRM etc. The effect is BIG – a lot of companies become sceptical and won’t embark on projects that will bring them value. What tends to happen is more and more technology is bought to address the issues and at the end of the day, nothing or very little gets used due to the complexities behind such systems and it takes years to embark on another project. Competitive advantage may have been missed, scepticism kicks in and another technology is bought as it’s the latest and greatest. One very large company did this and ended up with almost fifty different analytics solutions across their business – a lot of vanity and a lot of consolidation efforts!
Too many questions!
How can data & analytics help transform the travel industry. What do companies do with all of this data? Are they creating better customer experiences for their consumers (debatable), are they creating a more efficient operation, making and taking better decisions, enhancing margin / financial performance, creating better (wanted) products – perhaps some, all or none of the above. Is the deluge of data too overwhelming? How do they make this data insightful / useful / actionable and all the other buzz words we in the industry love to use!
We’ve talked about the main issues and challenges facing the industry, what are the opportunities that exist to ensure the industry can go from knowing that data and analytics is a “must have” and ensuring that they can move from opportunity to implementation.
Here are my 5 top thoughts:
Create a Data & Analytics Strategy
One of the most obvious elements that needs to be taken care of before anyone should embark on thinking about purchasing any technology stack or software product! A lot of companies out there don’t start with a data strategy and are typically lost in the fog of technology. The benefits of having a data and analytics strategy is that there is something to steer the ship with, the business is asked where and what they would like to do with the data and what the priority areas are, there is a roadmap laid out that provides the yellow brick road to ensuring the right areas are focused on, using the right data, answering the business questions that aren’t being answered and looking at what and where technology needs to be utilised – whether re-using or buying from scratch.
Don’t forget to change your internal processes
Gaining competitive advantage by implementing data and analytics technologies won’t work if you don’t fundamentally change and adapt your internal business processes. One company we are working with had very old and established operational processes, and while implementing a new analytics tool, we uncovered that the processes underpinning the business needed to change. The data was telling us that people weren’t undertaking the new operational procedures, as “that’s not the way that things were done”, and with the data we could pinpoint where and when they were defaulting back to old ways. It had a profound impact not only on the internal processes and inefficiencies, but also customer complaints started going up and this had an adverse effect on the business. Luckily, the data was able to tell us where the issues were, and the business was able to adapt very quickly. Just a small tweak can have a massive impact to the overall business, and while change is difficult to implement, if done by scanning and using data it can uncover opportunities for operational success and competitive advantage.
Know and love your data
Sun Tzu in the Art of War wrote that “one must know their terrain to be successful in war” – just one of the components. Knowing the lay of the land, the contours, the hidden areas can help an army and provide them the advantage for a surprise attack. If companies don’t know and love their data, they won’t know what to do with it. If they don’t know who manages the data internally, in which systems the data is collected, what the quality of the data is and how much of it is actually collected – then they don’t know their terrain. One of the biggest issues we see in businesses is the lack of governance and standards around data. Getting your strategy right is one thing, but if you don’t know in what state and where the data is, then it becomes more difficult to ensure the success of your data and analytics project. Uncovering this will outline the terrain that will allow for a successful project outcome. Knowing which data is mature and can be utilised by analytical tools, and which needs to be carefully cleansed or enriched to ensure it can be adopted to answer more and more business questions, will allow you to strike that competitive advantage. “Ad victoriam” albeit a Roman war cry!
Find the right people
As mentioned before many companies are looking for the perfect person who has all the technical, business and inter-personal skills to help them with their data and analytics initiatives. Unfortunately, there isn’t such people or “unicorns” that are going to provide this. With one of our current projects, we have assembled a team that has individuals who are technicians, people who can interpret data (typically from the business), people who can communicate business problems, data experts that can mine the data and provide the relevant insights. The team works together to get, mine, understand, interpret and take action where necessary so that the business can move forward. A blended team that has all the component parts of the unicorn, that makes the whole and is comprised of internal and external consulting resources. At the same time, we are working with our client to look at the people internally, to identify the right people that will take our place as a partner and ensure that the team continues to work efficiently and effectively as a whole. It is important to source individuals internally as they know the business and there are many data evangelists in your business.
Invest smartly in technology – not just for the sake of it!
Without the right understanding of where and what you want to do with technology – don’t invest in data & analytics technology just because it’s the new fad! Being a kid in a sweet shop (or candy store) is fun, but once you eat all those sweets you feel pretty awful and sick! Don’t buy all the sweets, work through your data and analytics strategy to uncover those technology investments already made that can be fruitful, and those unfortunately that need to be discarded as they don’t do what’s required, and invest in others that make sense strategically for your business. Tough as it may sound, there are just some sweets that have been lying on the shelf for too long that have become stale and need to be discarded.
Despite some of the challenges mentioned, one thing is clear, with the right strategic intent, people and technology, data and analytics has the potential to revolutionise the travel industry.
What are your thoughts? What are the biggest challenges you are facing right now with data and analytics?
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