Making Modularity Real: Interoperability and the Economics of Transition

[MUSIC] Hello and welcome to Tituarral Talks conference special edition. And today we are talking to one of our knowledge partners for the Tituarral Engage Conference and that is Accelia. And in the studio with me I have Barbara Marano, who is director of product marketing and I have Jonathan Newman, who is VP Global Business Development for Accelia. Hi Barbara, hi Jonathan. Hello Ian, thanks for having me today. Hi Jan. And today we're talking about modularity and interoperability. These are important concepts in the move that the industry is making towards modern retailing or OSD as we sometimes call it. And one of the values of modularity is that it should enable us to see value from the transition even before it's done because we expect the transition to modern retailing to take at least a decade and we need to be seeing value during that period as well as at the end of it. So let's get into it. Jonathan, how would you define interoperability and why does it matter? Well, gosh, it's a great place to start Ian. So interoperability to us can be defined to be defined as a way for airlines to be able to make fewer compromises. So today airlines have to make compromises because of their technology and those compromises then impact the way that they enact their commercial strategy. So with modularity airlines can now start to think less about the impacts on broader systems because of that interoperability. Why is it important? Well, firstly, airlines have valued interoperability and modularity for a very long time. The ability for an airline to be able to go and choose a vendor based on the quality of that product is something that has been intuitively valued by pretty much every airline since forever. But it's only now becoming much more of a given that airlines are going to, the airlines are going to now demand this of their vendors. Can I just like Ian before, like, right accidentally in Titorl engaged last year, we have one of these run tables and there was one of our customers, you know, was American Airlines. It was Debbie from American Airlines and she just brought up an analogy, which I just love it. And then obviously intertable was mainly men and when she brought up the analogy, she said, oh, I don't know if we will resonate with everyone in the table and she brought like a makeup back, okay. And then she was saying in the lines, okay, you have a makeup back, the makeup back obviously if you like Chanel LD or you can have all your makeup from Chanel. But she was challenged like any women will have all the makeup from the same brand. And you know, as soon as she was saying that one, I was like thinking of my eyeliner from Victoria Beckham, which there's not. And then any other eyeliner that can be Victoria Beckham. I was like, oh my goodness, that's so true. And then she was saying in the lines like, yes, you can buy Christian Dior all the sets of the makeup. But you may want to have like the blush from Christian Thorpe, you may want to have the eyeliner from Victoria Beckham. And I thought there was a very graphical way to explain why modularity matters and why to have the freedom to choose the provider you want for certain areas is really key. Yeah, I you know what, I never thought we would reference Victoria Beckham and Christian Dior in a brief podcast. So well done. And what I think we're saying here is it's the old conundrum of whether airlines are better served by going for a best of breed solution or buying a whole suite from a single vendor. In the days of PSS, the answer was almost always by the whole thing from one vendor. But I think we're seeing in the move to OSD or modern retailing, we seem much more emphasis on the value of best of breed solutions and the value that those can bring to an airline as it moves on this journey. Is that a fair assessment Jonathan? Certainly is. And this interoperability modularity was one of the founding tenants of this of modern airline retailing as it's described. And I think it comes back to and the value comes back to, especially in this transition, comes down to being able to select best of breed without having those those compromises. And if you think about coming back to as you say, this is going to be a decade long transformation, that being able to layer on top value that's going to come from different vendors is really important. And if you think about having to buy everything from one vendor, that means that potentially then an airline is handing over their horizon for innovation to somebody else. Whereas with with interoperability with with modularity, then the airline can take much greater control of their horizon for innovation and be able to go and enact their own commercial strategies. And do you know we say it with our customers? Yeah. And in the lines of like obviously you still like also last year in one of the events we made the announcement of we said we thought that accounting. So it's an airline that they've just chosen to do with us a little bit like what it's like to to rebound but then what is the financial with or that accounting. We have it with many other for airlines like for example, so like referring to the events this and last year we had a medical analyst that weren't the stage with us sharing something like that they're doing with us using Flex1Vision, which is the access and actually you did a paper on the solution and for us. So so I see that with with the customers how they want to have that freedom to do things with us what they feel you know we're bringing the value there or when do they prefer to go with other vendors. And Barbara this isn't a new idea for Accelia is it. I guess most of our listeners will be aware that Accelia has grown over the years and has acquired a number of other companies one of which was Fair Logix and Fair Logix contributed a great deal to to the products that you now have on offer. But Fair Logix 15, 20 years ago was actually providing if you like an upgrade to people's PSS to enable them to do some of the things they wanted to do in merchandising and retailing but the PSS at that time you couldn't support. So this is very much in in the DNA of Accelia as an organization. We can send it better ourselves Ian. Accelia or Fair Logix as it was has never had a PSS to protect. In order for Accelia to be able to deliver the kind of value that that you've just described we have to interact with with airlines core systems and another third parties. It's absolutely critical and to be able to to offer that innovation to be able to to be able to deliver on those values. And that if you like that strand of our DNA continues very much into the world of of offer and order. And I love how both you know like Jonathan and you and you said like DNA. You know because I think now when you look at kind of the marketing message I mean myself coming more from that angle it seems like now everyone is open and I remember when when a couple of I think it was like Glacier we were working with our CMO in terms of like what really differentiates us then you know and as a side we read always theme any by the say like open open and an interoperable but then for us we brought the open by nature because of what you were saying Ian and then you Jonathan is like because it's part of our DNA. At the end of the day you brought up Fair Logix and this was done with the whole concept of changing the industry or giving the airlines freedom giving the airlines control giving the airlines the opportunity to do the the the strategy they wanted to bring to life. No and at the end that's reflected in everything between Athelia is in our technology and architecture everything we do is with that mindset of openness and for us it doesn't mean we need to you know change what it was already there that we need to change our minds that we need to change our architecture because it's there already so so everything we do is just like in a way that that is not that that it's open to it for the airlines to integrate like any kind of partner friend or whatever they want so so I love when you say it's part of our DNA because it is. Very good all right let's move on to a slightly more difficult subject I think we're all agreed that modularity and interoperability is a very good thing it's a benefit of the transition that the industry is going through. But what's stopping it happening today? What are the barriers to achieving interoperability and modularity in your commercial stack? >> So, actually, let me just jump quickly. It's because last week, I was talking to someone that told me in the lines of like, it was really starting on NDC. He would say how the lines like, or that it was no work. And I was like, look, I think the problem in the indices, like there's a lot of misconception and a lot of like, really understanding what is really, you know, like how NDC, what is NDC? And at the NNDC, it was this foundation of modern retailing. I know in a way, it's like, that's what we really see. Now we have the foundation is like modern and like retailing. Now, why, you know, just say the barrier? So I think it's in a way, it's not just the technology. Is that the mindset? No, that needs to happen. The change of mindset. And I think I was also thinking the other day about like, when I myself haven't been in this industry a long time. And when I joined, I'm a, I was many, many years ago. The first day that we got when we were joining, I'm a, it was this like huge guide, huge book that was giving you the tips and the entries to look and do things in the, I'm a system in cryptic. Okay. So, and if you look at the book, the book was massive. So hard and to learn by heart. And then I'm, I just came up with, okay, it was no cryptic. Let's go to graphic and travel agents that were still using that book and with using cryptic. And you were thinking like, what the hell, you know, what do, sorry for my language. So it was like, why, why do they, you know, why do they keep on using that cryptic all, you know, like entries that are so hard to remember. I think it's that they change management. It's like also for every time we need to go for a change, we need to change the way we as like look at our architecture, we look at how we serve our customers, how, you know, it requires also, it's not just the technology, but it's a change of mindset and the change management needs to happen. So, so it's at least in part a cultural issue and an old habit's been ingrained. But I would put it to you that there are some actual technical issues as well. And one of them is the incomplete standards that exist within the industry. And I won't say there are no standards because there are, but I think they are still really incomplete. Would, would either of you like to comment on that? No, I, I, I let that to Jonathan. He loves the topic. Okay. Jonathan. Well, you're, you're, you're right in and those standards, or the lack of complete standards do do pose a barrier. If you think as an example about telemetry, right, about how airlines will be able to manage the performance of different vendors in one ecosystem, there's no, there's no industry governed way for an airline to be able to do that today. And so that's a huge barrier, especially when you're talking not just now about innovative new systems that sit on top of a PSS, but you're talking about core systems that require, you know, six, nine sort of uptime in order to, in order to serve the airlines customers. So we've worked very clearly with, with, with all of the, the major, all of the other major vendors in the, in the industry is part of our ongoing implementations and integrations with, with airlines, in, depending on scale and, well, at very different scales and sizes, whether that's American airlines, as, you know, 200 million PB, airline through to Eilink, five or six million PBs a year, both with very different ecosystems. And what we've been able to do with, with, with, with this experience in integration, is we've been able to abstract a lot of these integrations. And we've been mapping these abstracted integrations to, to the future to, to, to modern, to modern airline retailing. And this is now from, from, from Excel, it's perspective, this is becoming a standard. And it's one of the things that we're, we're really hoping that the industry will, will get behind and be able to, to be able to invest more time and effort in, in taking, whether it's these, Excel, virtual interfaces or others and start to, to, to build a comprehensive way for airlines to be able to take advantage of that, of one of those initial tenants of modern airline retailing, which is, which is modularity. And, and if I can maybe just add to, to what Barbara said earlier about this, this cultural change, yeah, airlines are very siloed businesses. And, and if you think about the last, the last couple of decades with, with airlines migrating for one PSS to another, it's a lot easier in fact, for an airline to do that, than it is, for them to change the way that they do business. And, and it's very, and, and if we think now about how, modern airline retailing is being positioned as, primarily of value driver, rather than a technology change, really we're seeing that smart airlines are starting to configure themselves and their organizations, much more around, around those commercial objectives and the customer journey, which then translates into the technology they need to buy. - Yeah, absolutely, I would just add something like, I'm also like for the people that are listening to us, if they plan to come to obviously Tituarily Engage, we plan to do a present case study that we're doing with one of our airlines, like we love to answer, but we already share already some insights. In terms of the benefits they are already seen with this transformation to modern airline retailing, Jonathan was saying is obviously, it's also just to see those benefits and they are already seeing it in terms of attachment rate of an seller services, and also actually three times bigger, and now like we would legacy technology and also in terms of savings for the travelers. So, so I think it's good, I mean, I think, no, it's really good when we see that how modern retailing is really bringing benefits to our customers, and to the airlines of their own. - Okay, so put yourselves in the mind of an airline executive who hasn't really started on the journey to modern retailing yet. What are the key things they should be thinking about as they contemplate that transformation? - That's a really great question, and I'm glad we can spend some time talking about it. Firstly, I'd say that airline executives should be thinking about the outcomes. So what are the commercial objectives that they have into the future rather than thinking about a system replacement? It's a lot easier to run an RFP and then consider responses in an objective way rather than thinking about how technology enables differentiated outcomes, but it is more intuitive for the airline to do it that way. Think about it as objectives, strategy, and tactics, and ultimately those tactics are what you are buying in what you're procuring in your technology. Secondly, I think about designing for a changing world. When we talk about strategies and objectives, they will change. If you think about the airline industry of July, 2026, it's very different even than the airline industry of January, 2026. So if you make an assumption that the world is going to change and your needs are going to change, that's a very good place to start. Lastly, I think about asking vendor's difficult questions in particular around modularity, which can't just be how modular are you? But it's really what happens when this component changes to another vendor, it's a must to be shown how the technology will deliver on those concepts to support your commercial strategy and also to understand the commercial impact of how future technology change will make. - Okay, so it's a universal rule as far as I'm concerned, and you've articulated it pretty well, Jonathan. First of all, think of the business outcomes you're trying to achieve before you start thinking about swapping in this system or swapping out that system. That would be to think of the technology first would be the wrong way around. - Absolutely. - And to think of the business first is the way to go. Okay, one last question about technology, and you did a little bit a moment ago to the fact that you've got a plan for a changing world. One of the big things that's changing is the prevalence of so-called artificial intelligence. I think the jury is still very much out on whether this is truly a world changing technology or whether it's a bubble. But I think Celia, I am sure you are incorporating some AI technologies into your products and you plan to go on doing that. - That's a really good way to frame it in. AI now is embedded in every major enterprise, software company, and Celia is no different. If I can maybe talk about it just from the lens of a gen tick. So one of the challenges that airlines are going through when they think about this transition to more than airline retailing is not just the technology and the cultural change that goes beyond it, but it's what happens to the work. So there's a lot of processes, there's a lot of utilizations of technology, the utilization of the technology, which will change. Our perspective is that airlines should be thinking about how this work gets done at the same time as they're thinking about this technology change. We've been working very closely with the Vista Agentech factory to work on a number of different POCs in different areas of the airline business today, which will help airlines now to be able to rethink some of these processes. Why is it important that this is done hand in hand with Bodneyline Returning? Well, there's a lot that could be achieved with Agentech on top of a PSS. However, the unified data structure of offers and orders provide a much better foundation for airlines to be able to rethink some of these processes and think now about how artificial intelligence can do that work on their behalf. And that's very much in line with what our friend Claude Muller from IATA published in a long blog piece a couple of months ago. And certainly there will be many in the industry who very much agree with you on that. This is an interesting conversation. We could go on for a lot longer, but we're not going to because this is a conference preview if you like. The discussion will continue at T2RL Engage in September. It's only two months away now. My usual reminder that if you're an airline manager, executive person and you are interested to attend T2RL Engage, there is no charge for airline attendees at the conference. And we very much hope to see you in London in September. And of course we will see Jonathan and Barbara at T2RL Engage in the Shadow of St. Paul's Cathedral in London. So for right now, thank you Jonathan, thank you Barbara for this conversation. And as always, thank you to you for listening. And I look forward to talking to you in the next edition of T2RL Talks. Thanks Ian. Thanks for having us today. Thank you all. Thank you to Terrell. Thank you for having us. Thank you for listening. [MUSIC]