One-on-One: Conley Takes World View
<B> One-on-One: Conley Takes World View</B>
<i>Greg Conley was promoted from general manager for North America to global general manager of IBM's Travel and Transportation Industry unit on Jan. 1. Last month, he shared his unique perspective on travel technology with BTN executive managing editor Cheryl Rosen.</i>
BTN: What do you see as the major themes for the industry in 1998?
Conley: I see at least three trends that are going to shape 1998. One is a continuation of e-business, which includes direct Internet booking to travel suppliers, pilot activities on direct corporate travel products like BTS or AXI, smart card initiatives, a fair amount of self-service kiosk initiatives and electronic ticketing. In '98, we're really going to see not only the maturing of these initiatives but integration taking place among them into end-to-end business solutions. The second is really the Year 2000 problem, which is breathing down the necks of suppliers in the travel industry and forcing them to make choices about whether they want to run their own systems or shift to other people's applications, or whether they want to move to a multi-host environment, to mitigate Year 2000 expenditures. And the third thing that will shape 1998 is the airline alliances, like the Star Alliance, KLM/Northwest and American and BA, that I think will leave their fingerprints on the year.
BTN: How about automated booking systems for the corporate market--some people say the products aren't yet ready for market, and some say the market isn't ready for them. What's your opinion?
Conley: I think it's some of each. There's been significant progress on the product front for direct corporate tools this year and I think corporations are beginning to look at the economic model that is driving them toward this type of tool and figuring out what kind of changes are required in their own businesses to make them enthusiastic about these kinds of products. Both sides have some maturing to do but I think maturation took place in 1997 and we'll see some real momentum behind these products in '98. I think we'll begin to see a natural selection among them, where two or three players emerge. But I believe these corporate products have more potential to impact the mix of how travel reservations are made than anything else, because direct consumer online providers rely on picking up users one at a time--but these corporate products, once they begin to take root, are going to move large chunks of users from one method of doing business to another method.
BTN: Do you think that a direct connection between corporations and suppliers is a viable channel?
Conley: We'll see a model of multiple distribution channels from vendors to the marketplace, some direct connections with consumers, some through the traditional channel and some through direct corporate travel products. If you're a travel vendor, your strategy ought to be to enable all those channels and then begin to incentivize the user to use whichever channel you want them to use. The secret is to get each of those multiple channels enabled and then begin to understand how to maximize each of them.
BTN: Do you see travel agencies being the ones to put in direct links for corporate customers?
Conley: I think there's certainly an opportunity for that to happen. Travel agents are becoming agents for the corporation and I think successful players are going to adjust their businesses to fit that model. Since every corporation is going to use multiple travel vendors, there may be a place for a technology company to put a front end on something that looks at the traveler's request and moves it directly to the internal res system of the supplier. We could come pretty close to that with some of the multi-host tools we have today. Nobody has approached us on this direct point, but I've kicked around ideas like this with some of the airlines and something may take hold.
BTN: How about your own division at IBM--what did your travel industry customers buy in 1997 and what are you investing in for 1998?
Conley: We're not supposed to break down numbers, but we are focusing on almost all the things we've been talking about. We sell services to people who are selling corporate travel products--services to develop those products, integrate them into the corporate environment and operate them through a service bureau or Web hosting model. We are in the self-service kiosk business, which is booming, and we're working with United to roll out the United e-ticket solution. The TPF operating system is a major business for us and we're also working on bringing TPF into the future with technologies like Java and Tivoli.
BTN: What kinds of things could a Java application of TPF do?
Conley: Many applications for airport checkin, for example, are very well suited to Java applications delivered through a network computer pipe, and there is potentially a large demand for network computers at travel agencies and in airports. We'll see that model roll out in '98. You'll see this industry as one of the initial users of the network computer at the airport, at the agency, at airline internal res offices.
BTN: What new technologies will we see in 1998?
Conley: We're looking at journey management, where we are trying to model a typical journey, figuring out how to help airlines optimize the processes that go on at the airport by figuring out how many people they need where, and where technology can help. Clearly some of this stuff is going on now but as we begin to implement technology in this industry, which is no stranger to big piles of data, the key will be to try to understand all that information and then adjust your business to go after specific areas of customers with different customized offerings.
BTN: You mentioned the Year 2000 problem. Is the travel industry ready?
Conley: Some companies are done already, some will be done in a timely manner but others will be scratching and clawing and whether they make it is yet to be determined, and some haven't got a prayer--and there are some in every category in each sector.
BTN: Among all these technologies, which ones do you think travel managers ought to be pushing for their own companies?
Conley: Almost every one you mentioned. Certainly they ought to be active in direct corporate travel tools like (American Express') AXI and (Sabre's) BTS, in pushing for the capability of e-tickets on those tools, and for smart cards for charging travel as well as for data repositories. I'd focus on the direct end-to-end model and make sure things are built and deployed in a way that minimizes my implementation costs. Don't be a passive customer--get in there and try to drive the development of the tools you want at the pace you want. Don't wait around to see what IBM or Sabre or United or Amex hands you. Step back and ask, what are your problem areas? Where do you spend the most money? Where can you have better customer service? You can have a significant impact on what investments are made by people like us.
BTN: How about the traditional travel technology, the GDS? Do you think it's a dying breed?
Conley: Definitely not. There is going to be consolidation on a global basis and then temptation by governments to regulate more. But there is no more powerful example of what electronic commerce can do than what the GDSs have been doing every day for the last two decades or more. And many of them are aggressively embracing some of these new distribution channels and positioning their business to process transactions from wherever they come. Put me in the bullish column.
BTN: How do you see the role of the travel manager changing in the year 2000 and what should travel managers be doing to keep themselves in the right channel as we move into the future?
Conley: If I'm a corporate travel manager, I'm really excited by all the tools I see out there and on the other hand I'm panicked because I'm not really sure which of these things is going to produce the kind of bottom line benefits that I get judged on. You've got to find your way through that mixture of panic and excitement. I think corporate travel managers are really focused on cost reduction and better service and they've got to judge each of the new offerings against those criteria. I would focus on indirect corporate products like BTS or AXI as the number-one item on my radar screen.