As the Head of the Cargo Business Unit, have you challenged your team with the question, “Are you fully prepared to master this new tool/software?”
This, especially when it involves not just automation but a completely different way of doing business. I am alluding to airlines that want to embark on the journey of Revenue Management (RM) and Dynamic Pricing (DP) solutions for cargo. The main reason revenue management or dynamic pricing implementation fails is because the airline is not ready for implementing it from one or more aspects: people, organization, data, process, and technology.
There may not be buy-in from folks that will use the software, or the executive (s) may not have vested interest in this project. The organizational set up – the hierarchy and linkage between Pricing, RM, and other groups – may not be aligned to support the RM process. The types of skills needed in some key positions may be absent.
There may be challenges with availability, timeliness, and accuracy of data needed to support various models and algorithms. There may be business process changes needed to support a RM software. Or, in some cases minor modifications to the software may be needed to support the current process (a less preferred approach or one that should be avoided). Interfaces to other third-party software and the type of IT environment from both hardware and support standpoint may not be sufficient to host it on premise.
Identifying Readiness to Adapt and Adopt
It is important to assess the readiness of an airline to implement a RM/DP software even before issuing an RFP (Request for Proposal) to various vendors. The reason is that the RFP may have a lot of requirements that a vendor’s software may meet but the airline may not be able to provide the required data or have a process organization to make it successful. Doing a readiness assessment will help to avoid listing those requirements if an airline cannot be ready in those areas in time for implementing the software or provide a roadmap to bridge any gaps and fill them up before the start of the project.
Why do Projects Fail?
The world of revenue management and dynamic pricing has seen several scenarios of failed implementations. RFP was never issued as airlines had no knowledge of what was needed, or the budget was not approved.
RFP was issued but no vendor was selected as during vendor presentations airlines realized that they are not ready for it. Vendor selected but implementation never completed as gaps were not identified and/or never bridged the gaps either before or during implementation. Successfully completed implementation from a technology standpoint but users would not use the system and so on. The bottom line is not doing a readiness assessment essentially delays the start of an implementation at best and at worst kills the project from starting. In cases where implementation starts, they almost result in failure either in terms of not going live or going live but end users not using it.
What can we do for You?
At RTS, we bring into practice a combined industry experience of over two hundred years working with over fifty airlines of different sizes and from different parts of the world. One of the things we recommend with any of our prospects is to go through a readiness assessment either internally or with us or any of the vendors. Some large airlines have the expertise and experience across various departments to understand how ready they are and what and what are the things needed to be ready.
However, many airlines may not have that expertise in house. So, we recommend that you conduct a readiness assessment study with a consulting company or a solution provider. The key objectives of a readiness assessment study are to determine the extent of readiness of to implement RM/DP practices and systems, identify strengths/areas where ready and gaps/areas where not ready, provide recommendations to address gaps, create a technical/context diagram, and to provide a roadmap for implementation of RM system. The study generally covers the following areas: employees’ understanding of the basic concepts and framework of RM/DP, data availability and quality, current/to-be revenue management processes, business landscape in terms of supply, demand, and customers, organization in terms of set up and skills, architecture of existing systems, and integration and ability to interface with solutions from external RM and DP vendors.
Net Result
The roadmap prepared after readiness assessment helps alleviate the major challenges and roadblocks before, during, and after implementation and significantly increases the success rate of going live as well as users continuing to use the system.