Most of you are probably familiar with the Travel and Transportation (T&T) industries. You have probably shipped or received packages. You likely are no stranger to airplanes—you’ve dashed through more than your share of airports to make a flight. If you have traveled between urban centers, you may have found it more convenient to travel by train. When you get to your destination, you’ve probably rented a car and stayed in a hotel. If you have been to Las Vegas for a convention, you have at least walked through the casinos. Hopefully you left with more money than you brought in!
In all of these examples, you are interacting with a T&T business.
T&T and outsourcing
Information management is not, with some notable exceptions, a core T&T competence. As a result, T&T has, to a greater degree than most industries, outsourced its IT functions to so-called strategic outsourcing companies, including IBM. Outsourcing, however, is facing seismic shifts due to the trend toward cloud computing. I’ll discuss cloud in more detail below.
Reservations-driven businesses—like airlines, hotels and rental cars—require robust systems capable of handling thousands of reservations per second. IBM is the dominant player in this market, with Transaction Processing Facility (TPF) running on a large mainframe. The reliability, availability and scaling required for reservations processing are so demanding that few T&T companies can run on an alternative platform. TPF provides the foundation for a reservations system only; the customer is responsible for company- and industry-specific functions, such as journey planning, booking, inventory and pricing. My intent in noting these characteristics is to demonstrate the complexity and outsized impact that reservations processing has on the systems architecture of T&T companies.
T&T in the cloud
Like all industries, T&T is struggling with the migration to the cloud. Managed service providers (MSPs)—software and services companies that sell such solutions as cargo management, shipping optimization, supply chain management or warehouse management—are offering rapid solution provisioning and pricing directly related to business demand. Rather than buy a computer, install it, configure it, build an application to run on it and maintain it, MSPs sell their solution by the number of reservations, number of warehouses managed, inventory size and the like. Information management is rapidly becoming an operating expense rather than a capital expense. This migration is having a seismic impact on T&T companies and their traditional vendors alike.
Analytics are driving the need for high performance computing. T&T companies want to form closer (striving for one-to-one) relationships with their customers. They are interested in integrating data from their own reservation information, purchase information, text, emails and tweets.
Freight and logistics companies also have complex analytics requirements. Shippers want to have detailed information so they can report back to the recipient. Ocean freight shipping companies need to optimize the location of their ships, both empty and in use, to minimize their cost of operations. Rail companies in the US and Europe are subject to “positive train control” regulations to minimize incidents of running into one another and hitting vehicles at traffic crossings. All logistics companies, especially trucking, want to know the location of their vehicles.
Hence T&T companies need infrastructure that can process computationally complex algorithms and can ingest, store and analyze big data. In many cases, the response needs to be nearly instantaneous; otherwise the customer could move on to the next website for a reservation or a shipping request.
Historically, data has been fragmented and lacked structure. But as the T&T industries realize the importance of customer-centricity to attracting and retaining new business, it has become vital for them to work with all types of data, including both structured and unstructured data, including logs, alerts, emails, tweets, and social media.
To drive revenue and achieve competitive advantages based on data retention and retrieval, T&T needs integrated systems and storage technologies that include:
- Near real-time data compression to reduce the storage footprint required for explosive account growth and storage of regulatory reports
- Automated information tiers to eliminate manual restructuring of data
- Storage virtualization to reduce data access time and enable data sharing across systems during peak transaction times
- Solid-state disks to reduce data access time for the analytical queries required to create and save regulatory reports
T&T companies can now encrypt customer information at the disk level, so if a disk drive is stolen, the resident data remains encrypted. This level of encryption allows the company to achieve Payment Card Industry (PCI) compliance and safeguard sensitive information. Online travel companies can offer customers services and access to data confident that the interactions are secure.
T&T industries are “asset intensive,” meaning that they own a large number of expensive assets—airplanes, airports, trains, tracks, auto fleets, hotels and casinos. These assets are costly and their maintenance is vital to customer safety and corporate profitability. T&T companies employ sophisticated asset management and predictive maintenance systems to ensure that maximum value and safety are derived from these assets.
IBM is active in all of these areas and has cloud-enabled solutions with integrated infrastructure, software and services. Due to the high degree of integration before the solution is sold to a customer, IBM can deliver and set up the solution quickly, enabling the customer to realize the business benefits as soon as possible. Leave a comment or connect with me on Twitter if you are interested in learning more.
Bill McCrosky is a Solution Architect and Consultant on the STG Industry CTO team, responsible for the Travel and Transportation (T&T) industry. He has 35 years of experience in the IT industry. Since joining IBM in 1998, he has been a project manager and solution architect on numerous business analytics and optimization projects. You can reach him on Twitter @BillMcCrosky
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