Mary Ellen George On NDC And Why We Need To Focus On The Plumbing

From The FieldAs the managed travel community gets a better grasp on what NDC is and why airlines are gung-ho about it, the focus turns to enabling. For travel management companies, the linchpin for corporate travel programs, there’s much to consider. Mary Ellen George of Tramada Systems lays out the different ways TMCs are approaching NDC development and suggests questions buyers should be asking.


If you’ve ever renovated or built a home, one of the last things you are likely excited to spend money on is the plumbing. It’s hidden behind the walls. No one stands in your home admiring it. Plumbing is not sexy.

Ask any homeowner who has had a major issue, however, and they’ll quickly tell you about the vital importance plumbing plays in the successful functioning of a home. “Down time” is painful and repairs can be costly and take a while. Depending on the situation, it may require full-scale replacement of a pipe or entire section of plumbing.

What does this have to do with corporate travel?

If we view the “plumbing” as the TMC infrastructure, including back-office systems, we start to see the parallels. It’s not the most exciting thing for TMCs to spend money on. Most users don’t even know it’s there until there’s an issue. Sometimes it has been adapted so many times – cobbled together to suit different needs – that it might be better to replace it altogether.

With the introduction of IATA’s New Distribution Capability, the importance of solid plumbing has come to the forefront. NDC is a subject of much confusion and misinformation among corporate buyers; recent research released by the Association of Corporate Travel Executives indicates that 81 percent of travel managers are either “not at all” or only “somewhat” confident in their understanding of NDC and what it means for their programs.

Adding to the uncertainty is unclear direction from some TMCs and online booking tools on their strategy for accommodating NDC bookings. A recent IATA white paper identified three strategies suppliers are taking:

1. GDS-based IT. Those suppliers using this approach are waiting for existing provider readiness. They are the slowest movers of the three because of large and complex IT, and an entrenched incentive model.

2. Other third party-based IT. Suppliers in this camp have a sense of urgency due to content differentiation and see an opportunity to take market share from those in the group above.

3. Insourced IT. Those building their own platforms internally are the fastest movers, best able to capitalize on NDC opportunities.

Tramada Systems North America head Mary Ellen George

The insourced IT solution seems the most preferable; however, apart from the very largest and most sophisticated players, it becomes cost-prohibitive for many TMCs.

The bottom line is travel managers want the best content, and right now they feel like they’re not getting it. Getting direct content in an efficient way is difficult for many TMCs; it’s a manual process reliant on legacy technology.

NDC is not the end all, be all. Developments and changes happen every day. If TMCs don’t have the ability to “plug and play” new developments on their platforms, they will be stuck waiting on another provider or undergoing the painful process of propping up legacy technology with human (i.e., expensive) resources.

Corporations today have little patience for suppliers that cannot be nimble and adapt to their needs. How long can they be expected to put up with that in corporate travel?

If TMCs do not focus on their plumbing, they risk obsolescence as technology allows new players to build their own plumbing to circumvent the TMC entirely. New travel management companies unhindered by legacy technology are already making an impact in the small- to medium-size program space. As pressure mounts for more agile responses from legacy providers, these new TMCs could potentially grab market share from larger corporates as well.

In the meantime, what questions should you be asking your TMC and/or online booking tool provider? Here are the top five topics to address:

1. How do you plan to handle NDC bookings? Walk me through an example of how a booking will occur and can be serviced. What is your timeframe to have this enabled?

2. Can your platform connect directly to airlines for NDC content as well as via GDSs? How do you ensure all traveller itineraries include a mix of booking sources (direct NDC and GDS)?

3. Does your platform provide post booking automation (applying service fees, invoicing, sending itineraries) for both NDC direct booking as well as GDS-sourced content?

4. What is the process for implementing new tech providers (such as Corporate Booking Tools) into my program? How long does it take and how much does it cost?

5. How will you handle the next planned development, IATA One Order bookings?


Related
• Pedro Ceron On Creating The 21st Century Managed Travel Platform
• Jeff Klee On The Industry Fiddling With NDC While Rome Burns
• GBTA Convention Highlights Push For ‘Omni-Channel’ Airline Distribution
• Mike Premo On What NDC Means For Corporate Travel Managers

Author: Mary Ellen George

Mary Ellen George is a highly regarded travel industry leader with a proven track record in building and launching profitable travel enterprises for Fortune Global 500 companies. As head of North America for Tramada, Mary Ellen is leading this Australian software company in the United States. Her past experience includes time on HRG's North America executive committee leading the region's commercial team; with American Express Global Business Travel in a global business development role; and with BCD Travel's global management board in general management, consulting and sales leadership roles. Connect with Mary Ellen on LinkedIn.

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Pedro Ceron
Advisor

Very nice Mary Ellen! Your categorization of supplier strategies are well laid-out, and your specific challenge questions are crisp and on-point. Thank you!

Ron DiLeo
Advisor

Mary Ellen makes some great points, all of which I agree with. To me, the NDC topic is a lot like teen-age sex… everyone talks about it, no one really understands how to do it, everyone thinks everyone else is doing it, so everyone says they’re doing it! What no one seems to be talking about, however, is the revenue impact on a TMC. If there’s one thing I learned quickly from my years in the TMC world, it’s that you need to be paid at least three times for any given task in order to be profitable. Clients need… Read more »

Mick Lee
Subscriber

Thank you Mary Ellen! You have long been a leader I have learned from and admired – appreciate your perspective here!

Michael Jacques
Advisor

Well done, Mary Ellen. The plumbing is finally changing and it’s time (overdue, actually) GDS-centric models evolve. There are two opportunities in play here as far as true innovation is concerned; the first is NDC making the old (GDS-type bookings) better and the next is making the old obsolete!