This is a viewpoint from Katherine Grass, Head of Innovation and Ventures at Amadeus.
The world of technology is vast. And with the rise of startup culture, there seem to be never-ending opportunities for entrepreneurial minds to grow ideas and build businesses. While not quite at the peak we saw in early 2015, venture capital funding remains hugely influential to the economy with more than $40 billion invested during Q2 of 2017.
With so many innovative ideas, products and services springing up it can be difficult to see which your organisation can really bring value to, and are worth investment. It is important for companies to ensure their investments don’t just look good on paper, but are in-line with their strategic goals and will deliver value to the customers they serve.
Faced with this challenge, Amadeus decided to start by identifying the key areas we felt would have a lasting impact on the travel industry in the years to come. Here are the six themes we came up with and the challenges we seek to address with each:
#1: Blockchain in travel
The impact of the blockchain in the finance industry is clear, but how can this distributed ledger be put to use in travel? What are the best use cases to test and bring to market first?
#2: Improved Conversion
In the age of Netflix and Amazon, how can we help airlines and travel sellers better personalise their offers with big data, artificial intelligence and other new technologies to improve their business and keep travellers happy?
#3: Extended Content
Travel planning doesn’t end with a flight, a hotel booking and a car rental. How can we help travel sellers offer concert tickets to music lovers, city tours to curious families, museum tickets to culture fans, and everything else that happens after a plane lands?
#4: Messaging Platforms
To offer improved service and more personalised offers, airlines and travel sellers need to get to know their customers better. How can chatbot technology improve communication with travellers and open up new points of sale?
#5: Operations and Performance
From the time we check-in to the time we take off, airports and airlines orchestrate hundreds of processes to make sure everything runs smoothly- from baggage handling, to security, airplane maintenance and more. How can we help airlines and airports do things faster, better and more simply to save time, save money, and keep travellers happy?
#6: Disruptive Forces
Self-driving cars, space travel, virtual reality – the stuff of science fiction isn’t so far out anymore. How will radical new technologies shaping our world today impact the travel industry tomorrow?
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Creating themes linked to the strategic goals of the company as a whole, has helped Amadeus Ventures, our internal venture capital arm, to guide its investments. These help us safe-guard against exciting but nebulous ideas distracting from our core business.
As they say: a door must close so another can open. At Amadeus, we believe that excelling in certain areas to drive forward real change for our customers is better than taking a broad-brush approach to innovation. Our goal is to deliver focused innovative solutions that can be brought to market in the near term.
We benefit from a wide-ranging network of customers and a huge wealth of data, which can allow the right startup to scale their technology rapidly and potentially bring their solution to a global audience much faster.
Looking externally -- and internally
So far, we have reviewed over 1,300 startups and invested in nine that we feel have real potential. For example,
a recent investment has been in Avuxi, a startup which ranks the popularity of every place on earth to provide travellers with an idea of where they can find the most popular area to stay. This investment sits within our Improved Conversion theme, as a traveller would be more likely to book a hotel, and potentially pay a higher price for their room, if they know it is the perfect location.
That said, when it comes to finding new ways of doing things, external companies are not the only source of inspiration. With a talented global workforce of 15,000 employees, we take lots of inspiration from within as well.
An example of this is Amadeus Video Solutions (formerly known as TravelCast) which uses interactive video to help travellers book flights, hotels or other travel content. For example, with United Airlines, we are exploring how travellers can book flights with live fares as they are watching destination videos.
With Lindner Hotels & Resorts we are using influencers to reach out to new audiences: while watching their videos, travellers can click to view live hotel and flight pricing details. These interactive videos also provide great data around audience engagement. For example, the Austrian Tourist Board could find out that Spaniards are most interested in their outdoor offerings while people from China are more likely to click on shopping destinations.
Working in a way that allows innovative solutions to enter the market rapidly is an important focus. However, Amadeus also ensures that its innovation programme leaves room for exploring long-term ideas, which are by nature more uncertain.
McKinsey’s paper ‘Three Horizons of Growth’ framework defines this approach clearly. It suggests keeping goals to three horizons; Horizon 1 maintains and defends the current core business; Horizon 2 nurtures emerging business and Horizon 3 goals create genuinely new elements to your business that don’t exist today.
To tackle these ambitious, exploratory Horizon 3 projects we have a dedicated department consisting of very different yet complementary innovation professionals. These range from psychologists and designers to technologists and intrapreneurs, focused on examining the potential of emerging technologies in the long-term.
Key questions to develop your company's innovation strategy
Ultimately, at Amadeus, we subscribe to the idea that in order to survive in this fast-paced world, innovation must embraced from within. However, in order to gain real value from investments and new projects, these must be carefully considered and approached with a strategic view.
So if you are interested in developing your own innovation strategy, perhaps a few initial questions are: what are you strengths, what are your weaknesses, and what do you want to achieve? Most importantly, what do your customers really need to succeed not just today, but in the future?
It is easy to become dazzled by the array of potential ideas in the market and from internal sources, but those who have a few key priorities to focus on, are most likely to drive real change for their customers.
This is a viewpoint from Katherine Grass, Head of Innovation and Ventures at Amadeus.