Written by Carlos Hernandez, Partner and Global Lead, Travel and Transportation, Avasant LLC
Innovations in technology have the potential to reinvent airports across critical dimensions of passenger experience, operations efficiency, and revenue growth. However, between 75% to 90% of current technology spend is on sustaining existing technologies and operating models , with limited focus on transformation and innovation.
This lack of innovation in driven by challenges of current technology and service delivery models, with 60% to 70% of programs failing to meet their scope, cost or schedule objectives, over 30% of programs being cancelled before they are completed , less than 20% measuring whether any business benefits had been realized, and long implementation cycles of 24-36 months leading to initiatives which are obsolete when implemented.
Airports need to develop technology and service delivery models based on the principles of agility, low investment and rapid benefits, or face the prospect of a vicious cycle of an increasingly obsolete technology foundation which forms an increasingly greater barrier to innovation, where large capital deficits make even rudimentary improvements difficult.
This apparent contradiction between innovation and investment can be reconciled by way of three converging forces:
These three elements define Zero Cost Transformation, a business model which reduces or eliminates initial investments and links risk and benefit-sharing directly to business outcomes delivered by innovations, and provides:
These trends are already prevalent. 80%+ of transformation programs are based on hybrid cloud models, 50% of programs deliver tangible solutions in less than 6 months, and a quarter of all transformation relationships are based on Zero Cost Transformation. Critically, 60% of senior executives are exploring alternatives to traditional technology and service delivery models.
There are proven use cases for technology-driven transformation across airports and related industries across key parts of an airport value chain. These address critical improvements in the cost, reliability, effectiveness and sustainability of core airport operations, while impacting the entire ecosystem of airports, airlines and support services.
With Zero Cost Transformation, airports have a once in a generation opportunity to drive innovation into the core of operations, while addressing the barriers of high cost and inflexibility. Decisions made in the next one to three years will be critical to the future of airports as hubs of economic activity and engines of growth.
ACI Insights includes content provided by third parties including airports, members of ACI, World Business Partners, and others. The views expressed and/or presented by these third parties are their own and may not represent or reflect with the views of ACI, its management, Board, or members.