iBODE: Technologies Maximizing Airline’s Revenue With Robust O&D Revenue Budgeting And Monitoring System
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Recent studies conducted by IATA indicate that the global airline industry is forecasted to become worth USD 28 billion in 2019, a much lower prediction than USD 35.5 billion envisioned in 2018. This dip in revenue could be a result of airlines succumbing to the pressure with slowdown in demand and dropping yields. A robust O&D revenue planning by airlines is believed to play a critical role in this scenario for a positive outcome. The airline industry is currently witnessing the evolution from legacy to modernized O&D revenue management systems as it is expected to increase bottom line by one to two percent.Making a similar transition to an O&D paradigm was one of the flagship carriers operating at over 100 destinations with its fleet of over 50 aircrafts. This airline launched a network wide initiative aimed at intricately examining its process of defining revenue budgets and monitoring performance right from an agency level upwards. Agency incentive programs for both performances linked bonus as well as tactical fares were also needed to be redefined based on the potential of the agency, creating transparency in the agency target setting process. Additionally, the existence of multiple disparate systems with different sets of data brought about a rift between the sales team and finance team when it came to paying commissions. Moreover, all performances were linked to revenue only and no opportunity existed to manage it by specific O&Ds. Lastly, the inability to manage additional incentives for premium cabin revenue posed as yet another challenge.
Holistic View of the Business
Coming to the fore and addressing these challenges, is Chennai headquartered iBODE Technologies with its novel and innovative offering RevenuePLUS - Revenue Budgeting and Sales Intelligence solutions. Once deployed, the solution enabled a holistic view of the business right from an agency level across various departments. It provided a single platform across the organization for deep insights using accumulated information from flown data and MIDT data as well as forward booking data. It seamlessly streamlined O&D revenue budgeting processes and delivered complete transparency of the entire management team leading to drastically improving the airline’s effectiveness of the sales team across key accounts. “Entirely a web-based application, RevenuePLUS was deployed as a unified single application on a single, global database. This helped in management of the cost of ownership with just two business users championing the roll out within the organization,” says Prajod Varma, a veteran in the travel industry with over 25 years of industry-rich experience and the Cofounder of iBODE Technologies.
Like every apprehensive customer on the lookout for a solution provider, the client conducted a rigorous selection process with a checklist of whether the solution meets the business requirements, ease of implementation, solution being easy-to-use for business users and deployed at an economical cost, and a high ROI. Meeting and exceeding client expectations, RevenuePLUS was selected to get on-board and was effectively implemented in just eight weeks. To make the transition even more effortless, trainings were conducted in headquarters as well as each region to familiarise the sales team with the application and processes. The application did not experience any downtime and functioned painlessly as more than 300 plus users simultaneously accessed the application across the network.
Ensuring Optimized Performance
Post introducing RevenuePLUS, the airline experienced the following productive impact on its sales team efficiency with agency productivity network wide:
• It successfully transformed to O&D revenue budgeting and performance management.
• The team now has access to a unified and scalable platform for sales targets and monitoring performance at various levels right from agency to network is now in place.
• All back-end data including flown data from revenue accounting, MIDT, forward booking data are processed by RevenuePLUS daily which are completely automated with alerts in case of any exceptions.
• All PLB and Tactical fare definitions are managed easily and monitored daily. For incentivised agents, RevenuePLUS estimates PLB tier level at the end of the year and commission pay out daily.
• PLB definitions are now done for multiple cabins with option to define additional pay out for premium cabin revenue.
• Using RevenuePLUS’s robust data collection and reporting capabilities, the entire organization has access to in-depth analysis and insights to sales.
Delivering Intelligence through Data
Having conducted a detailed analysis, the team of professionals at iBODE helped the airline deliver customized agent specific deals by leveraging actionable intelligence to derive PLB target for an agency based on several parameters such as previous flown data, QSI as a benchmark for optimal
performance, average business volume achieved by the airlines for each O&D as well as share of the agency’s business by each competitor airline which are done for economy and premium cabin separately.
This influx of information is amalgamated to build O&D wise ‘Share Shift Opportunity’ for the agency and estimate a revenue target based on it. These listed out objectives are then utilized as the base for sales staff to negotiate with the agency and agree on the target which is then put down as a signed contract. “Agent loyalty to airline is a thing in the past and with tight competition vying for the same pie, it is imperative that airlines constantly measure market share in comparison to competitors. Market information data such as MIDT or DDS helps in this analysis. RevenuePLUS delivers this analysis at each agent level, O&D level and a market level. Further, an agent’s performance is measured not just by airline share of the agent but also ‘share shift opportunity’ with an agent,” informs Prajod. “For tactical fares, other than revenue or passenger volume targets, increment in share of the agency business is also introduced as a measure. This ensured that the tactical fares did not dilute existing business but indeed gave incremental business from the agency,” he adds.
iBODE's other co-founder Dr.Pramod Varma, who helped architect some of the largest systems across the globe including Aadhar and UPI, goes on to add, "While designing RevenuePLUS, we wanted to put the focus on solving customer problems rather than the technology used. Hence it was a conscious decision to use open standards, platform neutral technology, and keep the entire system light weight which is highly scalable yet simple to manage."
Seamless Trade and Corporate Sales Management for Airline
Delving deeper into understanding the workings of iBODE’s core offering, Prajod goes on to explain how the RevenuePLUS Sales intelligence module has been designed and developed envisioning small and medium airlines harnessing its power to plan its sales. It is equipped with a broad range of tools that are used to analyze sales and agent performances based not just at route level but also at an O&D level. This is possible with the solution constructing O&D from revenue accounting coupon level data, based on trip breaking rules defined for each airline. “This enables airlines to create tactical offers to agents for O&Ds without diluting existing yield. Each tactical fare offered to agents is monitored by RevenuePLUS daily in terms of expected spike in the market share of the agent for specific O&Ds. This gives an accurate picture on the impact of the deal. It also enables airlines to pull out a deal from the market which is not working to cut the loss,” reveals Prajod.
”While designing RevenuePLUS, we wanted to put the focus on solving customer problems rather than technology used”
The feature-rich module compartmentalises various aspects of the market for further analysis and performance comparison. The solution compares the clients’ current target market with overall market segmentation for all other airlines for which a marketing strategy can be designed and yields can be improved. In essence, RevenuePLUS can estimate the average fare if the segmentation is altered in line with the overall market’s segment mix.
Gearing up for the Future
Having carved a niche for itself in the global airlines market, RevenuePLUS, since its launch, has already been used to plan over 100 billion US Dollars revenue by various airlines and have serviced a number of global airline customers located in Asia, Middle East and Europe. The company now envisions penetrating into newer markets including African market, which it believes holds significant potential, with its very first implementation of RevenuePLUS in this market. As the company aims to increase its global footprint, its team of certified product development engineers are working on continually improving its product functionalities. The company also envisages forging strong partnerships across the globe in order to expand the core engine of RevenuePLUS to other verticals such as cruise, scheduled coach/train operators, freight operators and the likes where there is a similar need to have an O&D revenue and passenger/freight planning. Prajod signs off telling us of the company’s progress in that vertical, “We have already created a RevenuePLUS – Cargo to help passenger airlines to plan revenue from cargo sales. Some of our existing customers have also opted for this.”
This influx of information is amalgamated to build O&D wise ‘Share Shift Opportunity’ for the agency and estimate a revenue target based on it. These listed out objectives are then utilized as the base for sales staff to negotiate with the agency and agree on the target which is then put down as a signed contract. “Agent loyalty to airline is a thing in the past and with tight competition vying for the same pie, it is imperative that airlines constantly measure market share in comparison to competitors. Market information data such as MIDT or DDS helps in this analysis. RevenuePLUS delivers this analysis at each agent level, O&D level and a market level. Further, an agent’s performance is measured not just by airline share of the agent but also ‘share shift opportunity’ with an agent,” informs Prajod. “For tactical fares, other than revenue or passenger volume targets, increment in share of the agency business is also introduced as a measure. This ensured that the tactical fares did not dilute existing business but indeed gave incremental business from the agency,” he adds.
Entirely a web based application, RevenuePLUS was deployed as a unified single application on a single, global database
iBODE's other co-founder Dr.Pramod Varma, who helped architect some of the largest systems across the globe including Aadhar and UPI, goes on to add, "While designing RevenuePLUS, we wanted to put the focus on solving customer problems rather than the technology used. Hence it was a conscious decision to use open standards, platform neutral technology, and keep the entire system light weight which is highly scalable yet simple to manage."
Seamless Trade and Corporate Sales Management for Airline
Delving deeper into understanding the workings of iBODE’s core offering, Prajod goes on to explain how the RevenuePLUS Sales intelligence module has been designed and developed envisioning small and medium airlines harnessing its power to plan its sales. It is equipped with a broad range of tools that are used to analyze sales and agent performances based not just at route level but also at an O&D level. This is possible with the solution constructing O&D from revenue accounting coupon level data, based on trip breaking rules defined for each airline. “This enables airlines to create tactical offers to agents for O&Ds without diluting existing yield. Each tactical fare offered to agents is monitored by RevenuePLUS daily in terms of expected spike in the market share of the agent for specific O&Ds. This gives an accurate picture on the impact of the deal. It also enables airlines to pull out a deal from the market which is not working to cut the loss,” reveals Prajod.
”While designing RevenuePLUS, we wanted to put the focus on solving customer problems rather than technology used”
The feature-rich module compartmentalises various aspects of the market for further analysis and performance comparison. The solution compares the clients’ current target market with overall market segmentation for all other airlines for which a marketing strategy can be designed and yields can be improved. In essence, RevenuePLUS can estimate the average fare if the segmentation is altered in line with the overall market’s segment mix.
Gearing up for the Future
Having carved a niche for itself in the global airlines market, RevenuePLUS, since its launch, has already been used to plan over 100 billion US Dollars revenue by various airlines and have serviced a number of global airline customers located in Asia, Middle East and Europe. The company now envisions penetrating into newer markets including African market, which it believes holds significant potential, with its very first implementation of RevenuePLUS in this market. As the company aims to increase its global footprint, its team of certified product development engineers are working on continually improving its product functionalities. The company also envisages forging strong partnerships across the globe in order to expand the core engine of RevenuePLUS to other verticals such as cruise, scheduled coach/train operators, freight operators and the likes where there is a similar need to have an O&D revenue and passenger/freight planning. Prajod signs off telling us of the company’s progress in that vertical, “We have already created a RevenuePLUS – Cargo to help passenger airlines to plan revenue from cargo sales. Some of our existing customers have also opted for this.”
