02 September 2009

Open For Business Initiative - Right Time?

Farelogix seems to have done it again - lit the blue touch paper and retired to watch the resulting fireworks. This time in the Business Travel market.

This time - their focus is an area that has seen a rise of both the cost and the frustration of the user community.

The business adoption of Online should have been an easy proposition. All business users are essentially connected via their corporate web nets. However the complications imposed by both the financial controls and the GDS based environment resulted in a set of complex products that were cumbersome and difficult to deploy and administer. However with the general move away from Office Admin staff to self service activity within the corporation - the human support of the business traveller dwindled over time. Thus self service became the only game in town.

For the TMC intermediaries there was a nice pot of gold in this move. They were able to charge a fee for both automated (Touchless) and serviced (Touched) bookings. Normal figures are at the $25/50 cost per transaction level respectively.

Thus the TMCs were happy to let the user community pay in return they got to keep all the "bennies" that would have normally accrued to an agency.

This is great if the self service technology resulted in both ease of use and more importantly speed of use. However the current crop of tools remain complex and unnecessarily time consuming. One has to wonder if there really was a benefit to the corporation in this process. Today you have a chap who costs about $250-$500 per hour fully loaded making a reservation and typically taking about an hour or usually more to make his reservation. This replaced the $25/hour clerical level agent who previously did the job in half the time. Perhaps not the most efficient use of time and resources.

The level of frustration by the Corporations in the deployment of these tools (what I would call 1.0 products) has a litany that could and does fill volumes. The leading players are Concur with their CliqBook Suite and Sabre's now venerable GetThere product. Despite the development of online corporate tools from the big 3 OTAs their share of the revenue of the players has been minimal despite a fairly mature product. Smaller players have come up with niche products like Booking Builder - and who can forget Portaga - one of the best ideas that never saw the light of day.

Enter Farelogix who has once again caught the wave of the sentiment that the current tools are not up to the job and they are proposing (not a product as yet). They are proposing an open source tool that can be customized by the corporation and used to connect to the traditional GDS infrastructure or any supply chain host that the company wants to do business with - both indirect and direct.

While I am not a huge fan of Open Source I am definitely a fan of unbundling the totalitarian complex reservations and distribution systems into components aka Open Architecture. This to my mind is where Farelogix shines. Providing a platform that can be applied with local smarts to meet the needs of the specific user community. Appropriate use of technology without the need to change everything seems to be a key ingredient. But perhaps the most important feature is that the user community in the Corporations (as embodied in membership in NBTA) now has the ability to take control of their own environment and their own bilateral business relationships with suppliers and/or intermediaries. Note I say seems to be - because this is a vision not a product as yet. However as they have shown with their Hawkeye Open Source solution Farelogix can finally crack open an independent access into the GDS world. And they are developing a good track record of delivering. While this might seem to be heresy to the GDS model, they (the GDSs) clearly seem to agree with Farelogix as can be seen with their initiatives ranging from the new off-core Profiles to Travelport's Open Desktop initiative and Amadeus's ONE product.

As many readers will recall I am oft to comment that today the vast majority of PNRs created in a GDS are now touched by a third party system. This capability today is funded by the agency community themselves or increasingly by the corporations. Farelogix initiatives such as Open for Business and its encouragement by NBTA is not starting a new trend - it is actually continuing the evolution of the distribution model.

So this seems to be the right product at the right time. Let's wish them well in executing it. This is not a sector for the feint hearted. Having developed several corporate products since the mid 1980s, I can attest to the difficulty in getting them ready for market and then deploying them.

Best of luck chaps.


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