Month: June 2024

From DCS to Service Delivery

Panta Rhei, this is the name of the biggest excursion boat on lake Zurich. Sometimes, when we are in one of our shared workspaces downtown, we catch a view of this wonderful ship and think about the ship’s name: Panta Rhei, which means (according to Wikipedia, as none of our team members had ancient Greek at school): everything flows.

Panta Rhei also describes the status that parts of our industry are currently in: Airline distribution has started the next big evolutionary step. IT systems that have served the industry for decades are being replaced by modern technology that enables airline commercial operations to be focused on customer experience. Through this shift, airlines will be able to become retailers, replacing their legacy, trip-based system environments with modern offer and order management-based platforms. Under the stewardship of IATA, a lot of work on designing and defining the new world of commercial airline processes and airline IT has already been done. If we use the overall process of passenger, or rather customer experience from offer to order to delivery, we can also see that much more work has already been done on defining the “offer” and “order” parts compared to delivery. Delivery – some call it Service Delivery, others order delivery – covers the process and work that needs to be executed to deliver the services which were presented as offers and later ordered by the customer. In our airline industry, delivery mainly takes place in the airport environment. Numerous players, airlines, airports, ground handlers, security, customs, immigration, retail, etc. are stakeholders in an airport, leading to a great deal of complexity. Therefore, defining Service Delivery in the context of offer and order management is not an easy undertaking. At the same, time airports and their ecosystems need guidance from the airlines concerning the customer experience, otherwise the finger pointing between all parties may start (or in some cases continue) about why some strategic investment decisions have not been taken.

From an IT perspective, the Departure Control System (DCS) has traditionally played a pivotal role when it comes to passenger handling. As part of Service Delivery, the traditional check-in process becomes more of a back-office process, with the traditional boarding pass being replaced by a new format constantly synchronized with the actual order. This process is also designed to be supported by biometrics in the future. All information for serving and delivering to the customer is available in real-time to all involved parties at all touchpoints. The customer is consistently and continuously informed via mobile applications and the ground handler, or other airline airport staff have access to the order data with new and user-friendly front ends. This leads to a fundamental transformation of the legacy DCS to either operations management for aircraft handling and delivery orchestration or management of customer handling. For customer handling, the order remains constantly updated as a “single source of truth” and is integrated into all relevant airport processes, such as baggage management, waitlists, overbookings, etc. The order also feeds relevant parts of the airport and aircraft turnaround operations, such as fuelling or weight and balance operations. In addition, the customer shall receive relevant and personalized offers at touchpoints during the airport experience. Therefore, the future airport systems for customer handling must also be connected with the airline’s offer management system.

The (at least partial) substitution of DCS through Offer and Order Management systems (OOMS) leads to a call for action to DCS vendors. From a high-level technical perspective, vendors need to support passenger handling not only for order-based Service Delivery but also by providing the capability to offer relevant services to the customer at touchpoints at an airport. Overall, their future role can be summarized as the providers of the system that steers the passenger’s airline experience, by orchestrating and supporting the customer journey at the airport through interfacing into the relevant environment, especially the airlines OOMS and the relevant airport systems.

This requires an overall re-think of the vendor’s systems, integrations and capabilities:

  • The (ONE) Order message suite needs to be fully supported.
  • The system must be capable of working without legacy data formats such as PNL, ADL, PNR, e-tickets or EMDs, as they will no longer exist.
  • At the same time, the system needs to provide the ability to still access the aforementioned legacy components and artefacts, as airlines may partner with other airlines whose operations are still in a legacy environment.
  • In addition, an integration into the airline Offer Management System must be available to address retailing and ancillary opportunities at all customer touchpoints during the airport process, regardless of channel, such as a mobile app or airport service desk.

However, the roadmap for DCS might very well be an evolutionary one in which legacy DCS evolves over time to a Service Delivery system. With Order Delivery being at an early stage, DCS vendors have an opportunity to play a role in the new set up.

The legacy Passenger Service System (PSS) providers already have DCS in operations. With the evolution of their portfolio to cover OOMS capabilities, it can be assumed that they will also further evolve their current DCS to service delivery to meet the requirements of the future customer airport experience.

The market players that are not providing legacy PSS functionality have always been dependent on an underlying third-party PSS supporting their customer airlines’ operations. Thus, these vendors do not have a DCS and would have a significant gap to close if they were to develop all the required Service Delivery functionality. This product roadmap challenge is currently being addressed by numerous vendors separately. They have started looking at the market to evaluate potential partnership opportunities, either on an individual deal basis or as a strategic partnership.

Therefore, this offers a business opportunity for legacy DCS providers that are willing to evolve and become Service Delivery providers. Due to the overall modular design of OOMS in general, supported by defined APIs and business processes the system landscape is open enough to seamlessly integrate multi-vendor solutions. This modularity leads to new opportunities for Service Delivery vendors, as airlines are likely to be open to using a Service Delivery system from a vendor other than the one providing their OOMS, overcoming the usual monolithic design of legacy PSS.

This shows that the evolution within our industry offers opportunities for well-established providers, including DCS vendors. Embracing the change and being a front runner for Service Delivery may open new markets to be explored. We all know that the change needs to happen, as consumers expect airlines to digitally serve them as other industries have already been doing for quite some time: customer centric with relevant and personalized offerings at all customer touchpoints and the ability to deliver.

However, the Service Delivery part of the overall industry transformation will not be completely smooth and seamless. Hurdles will pop up that no one had on a risk sheet, timelines might be extended, but this is not unusual. When the MS Panta Rhei made her maiden voyage on Lake Zurich in 2007, the ship was floating in unfavourable positions and produced unusually heavy waves during the journey. As a result of this, some adjustments had to be made to the vessel to reduce the impact on other users of the lake. No one talks about these teething troubles any longer, as the ship is fully in service and the pride of the Lake Zurich fleet. We take this as a good omen for the transition in our industry.

Boris Padovan, Travel in Motion AG