IBM: Business Transformation Is ‘Not Just About Technology’

Transcript

Bernard Meyerson:Well, one of the things that people are looking at extensively is lowering the barrier to travel internationally. There's a lot of talk about standardizing on how you handle identity. Right now, everybody's got their own identity system, and the problem is it becomes highly problematic if everybody's got a different passport, a different style, some are electric, some are not, some are on shared systems. The US and Canada share a system where you can go back and forth, but you can't use it to go other places. This is all problematic, and people will get that done. That's sort of mechanics. The other interesting thing about the travel industry, though, is because of the vast amount of data that is available, you actually are beginning to see some really transformational things. For instance, it has always been that you did maintenance on aircraft based on schedule. Scheduled maintenance, but the truth is planes break. They're like anything else. I mean, they don't fall out of the sky. They're highly reliable. The most dangerous thing you're going to do is drive to the airport. I mean, let's be honest. But what does happen is periodically the plane will have what they call a mechanical and it won't be available. The reality is we're getting so good at this in terms of collecting data from aircraft, you can actually tell in advance now many times what part is going to fail just by its behavior changing. And actually then upgrade before the failure occurs so that you don't have downtime. I mean, these are transformational things because if you really think about it, you're predicting the future so accurately you can change it. That sounds like science fiction, it's the reality. In terms of how one competes, it used to be that if you wanted to look at a new travel offering, you'd put it out there, wait a quarter or 2, see the financial results. Today, because most people, particularly millennials, are booking online or booking off their cell phone, You can basically just put out 10 different offers and very quickly hone in on the one that actually gets the best uptake, eliminate the others, and you've now very efficiently optimized your business without waiting a quarter, in fact without waiting a week. So the velocity of business is accelerating, and that's good for everybody, the traveler as well as, of course, the airline. The airline doesn't want to waste months doing something unsuccessful, and the traveler benefits because they get the offer they truly wanted without having to wait months for it. Well, the problem with personalization goes beyond that. There's a privacy issue, and that's where it gets really dicey. You know, we emphasize AI is a great thing, and that will let you drive personalization if you know enough about an individual. But there are rights to privacy, and you want to find that balance where somebody agrees that you can use my data but for this very specific purpose, so that I will get the right offer because you know that I prefer, in my particular case, a highly standardized set of travel offerings, please get me those in a package. Okay, so I'll offer that to you, but I have to know you want that, which requires me to know a fair amount about you, particularly your age, your travel preferences, your travel history. So there's a real building of trust that's going to be needed in this industry for that to work, and it's something that is coming. But again, you have to be incredibly conscious of it. Yeah. Because it will revolutionize in a positive way your experience while you travel, But you will give up some of your private data, not necessarily your privacy if it's done right, but you have to give up some of your private data for that to be achieved. So it's a very complex question, not as straightforward as how do I get you the best offer. Really, it's going to mobile. I mean, if you think about it, the idea of banner, you know, big banner advertisements and billboards and all that, the reality is right now People go through a clickstream, they can evaluate how you perform based on thousands, sometimes tens of thousands of reviews of fellow travelers, and very rapidly decide whether you're in the running or not in the running. Furthermore, it keeps you current because they can even sort through those ratings to see if the last 6 months have been just months from hell because of some disaster that occurred versus it was your greatest period ever and they should reward that. I mean, the velocity of business has accelerated dramatically. And those who fail to accelerate with that change basically are left behind. And that, that is just revolutionary and something that you ignore at your own peril.

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