Mat Orrego On Approaching And Solving Problems In The Travel Industry, Part 1

By | February 21, 2018

Today’s advisor is Mat Orrego, CEO and founder of Cornerstone Information Systems. This is the first installment of his two-part series on approaching and solving problems in the travel industry. One of his key takeaways is that this industry doesn’t necessarily have the constraints that many think it does.


Part 1: How you approach problems could be(come) the problem.

“If you want to build a ship, don’t drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.” — Antoine de Saint-Exupéry.

I love the travel industry because of its depth and wealth of problems. It seems strange to love something because of its many problems, but I am a problem solver like many of my industry colleagues. Often this innate drive leads to the discovery of more problems. Problems are the fuel that drives technology companies like Cornerstone. How can we use our technology or develop new technology to solve the problems facing our industry today?

The tools (products) we use today are part of the much larger world of platforms and functionality that extend well beyond traditional tool sets. We are now more connected outside our traditional environments than ever before. I am referring to the world beyond web service calls and APIs — the world of Amazon Web Services, Microsoft Azure and many new commerce platforms. These deliver capabilities beyond those of the traditional GDS, self-booking and expense management tools.

These new platforms allow us to solve problems at scale, while trading capital costs for variable costs, and deploying information in minutes. They offer a broad set of global, cloud-based products including computing, storage, databases, analytics, networking, mobile, developer tools, management tools, security and enterprise applications, and connectedness for everyone and everything.

Success for our customers and the whole travel industry has long been defined by realizing efficient operations and implementing successful travel programs — all through products purchased from vendors. But now that world is opening up. The walls are coming down.

Mat Orrego, Cornerstone

Mat Orrego, CEO and founder of Cornerstone Information Systems

While the travel industry has done amazing things, it tends to solve the same problems over and over. Very little effort is invested to truly break through to a better solution. We continue to patch existing systems or build a small extension into something else and call it “innovation.”

We have an opening to advance the travel industry beyond the traditional framework of solving problems and instead invest in the process of exploring and creating opportunities. We can improve beyond the solutions we depend on today. This requires our industry to create a culture that sees opportunities instead of constraints and stops focusing on the problems.

For example, I see the traditional back-office system as a constraint. Why does this antiquated system and its processes continue to be a consideration in how we move the industry forward? Most of its functionality and processes will be replaced via cloud solutions that can centralize data, reporting and analytical solutions.

When we eliminate the constraint we can truly change how we operate. I applaud Delta Air Lines and others that are breaking out from their traditional technology stacks and looking for ways to interact outside the confines of the traditional PNR. I think about getting rid of agency-based ticketing and letting the airlines issue their own tickets. That would eliminate settlement at the agency level and, if done correctly, help define a data service that meets all the stakeholders’ requirements. It frees agencies and agent workflows to focus on what they do best: servicing customers and leveraging expertise.

While NDC holds the hope of a breakthrough, its platforms are too invested in traditional frameworks. NDC is adding complexity to an antiquated system and calling it innovation. We are focused on using more modern connections between old systems when we should be focused on breaking down the constraints of those old systems and creating opportunities for growth. There are many problems in our industry that are ripe for breakthrough thinking. The tools that can enable opportunistic thinking are both available and affordable.

What would we do if we didn’t have the constraints we think we do? Because we don’t. I call out my fellow problem solvers to stop solving the same problems and start creating opportunities.

My second installment will focus on organizations that have innovated and solved meaningful problems in the travel industry, their experiences and rules of engagement.

Mat Orrego
Author: Mat Orrego

Mat Orrego has worked in the software and travel industry for 20 years as CEO of Cornerstone Information Systems. A graduate of Indiana University Kelly School of Business, Mat co-founded the application and data management company. He is also an avid investor in a variety of enterprises including technology, manufacturing and services businesses. In 2012 Mat co-founded Runuplabs.com, a technology accelerator for the travel industry. He has invested in and advised startup companies such as trekkable.com, peopleocity.com and Desti.com. Mat lives in Bloomington, Ind., with his wife Beverly. Connect on LinkedIn with Mat and Cornerstone Information Systems.

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jeff klee
Subscriber
jeff klee

Great post, Mat. I couldn’t agree more. One of the biggest constraints on innovation in travel distribution has been GDS PNRs, and the outsized role our industry has granted them. When we ask, “How can we make this new thing fit into our back- or mid-office?” we are asking entirely the wrong question. We need to completely re-imagine the data structures, storage mechanisms and process flows that we employ because the limitations and inefficiencies of what we have are stifling. If a back-office system uses a GDS PNR as the primary conduit for the exchange of data, there is no… Read more »

Jennie Robertson
Subscriber
Jennie Robertson

Agree wholeheartedly! All the slick new “innovations” are built atop a crumbling infrastructure. And in this environment, it’s so easy to blame someone else when something doesn’t work. “Oh, that’s a GDS problem … there’s nothing we can do about that.” Hoping to see some real innovation – in my lifetime! 🙂

Erik Mueller
Subscriber

Well said Matt! With emerging technologies, this could easily become a reality for our industry in the next five years. We as a community need to be ready to take a very big leap. I think we will find this type of discussion appearing at the forefront of industry events this year.

Erika Moore
Advisor
Erika Moore

The first step to “stop solving problems and start creating opportunities” is transforming your organizational culture by encouraging and supporting a sense of entrepreneurship. Give people the power and the freedom to innovative. The ability to experiment and to fail. And the support they need to learn from their failures and their successes. The goal of every great entrepreneur, whether Henry Ford or Steve Jobs, is to solve for the needs of customers today while creating solutions that help customers grow and be better positioned for the opportunities of tomorrow.

Mary Ellen George
Advisor
Mary Ellen George

You bring up a really good point, Mat, on the legacy back-office systems being a constraint. I agree, these antiquated processes will be replaced with cloud-based solutions. The good news is there are modern and affordable platforms available now, so it’s time to move forward!

Wade Warren
Subscriber

I’m with you Mat. Thanks for the challenge. I’ll take it and bring forth a platform that will enable a TMC to bring all these patchy systems together. It’s absolutely time for that. I think it’s been difficult for our industry to get to that place because, like you’ve said, we’ve tended to focus on specific needs rather than a platform that could handle all the needs. It’s a sticky wicket because we can’t expect some new magical system to stand up and take over and ask TMCs to do an about-face. Rather a transition to the way it should… Read more »