Presentation on theme: "Tourism Cloud – Enabled Business Model Innovation"— Presentation transcript:
1 Tourism Cloud – Enabled Business Model Innovation Jen-Yao ChungIBM T. J. Watson Research Center
2 AgendaIntroduction and Industry TrendTourism EcosystemWhat is Cloud, Why Cloud – Rethink IT / Reinvent BusinessEnterprise Cloud ApproachCloud Adoption Patterns - Business Cloud ServicesInnovative Business Model for CloudSummary
3 The World Wide Tourist Market WTTC’s latest Economic Impact Research shows that world Travel & Tourism continues to grow in spite of continuing economic challenges.Despite progressive downgrades to growth forecasts through 2011, the industry grew by 3% over the course of the year (in terms of Travel & Tourism’s contribution to GDP).Tourism’s direct contribution to GDP in 2011 was US$2 trillion and the industry generated 98 million jobs.Taking account of its direct, indirect and induced impacts, Travel & Tourism’s total contribution in 2011 was US$6.3 trillion in GDP, 255 million jobs, US$743 billion in investment and US$1.2 trillion in exports. This contribution represented 9% of GDP, 1 in 12 jobs, 5% of investment and 5% of exports.Growth forecasts for 2012, although lower than anticipated a year ago, are still positive at 2.8% in terms of the industry’s contribution to GDP.Longer-term prospects are even more positive with annual growth forecast to be 4.2% over the ten years to 2022.Source: World Travel & Tourism Council (WTTC)
4 Tourist Industry Trend Internet continues impact on tourismStrong efforts in standardization and interoperabilityIncreasing importance of mobile devices and geographical information systemsAlways onIntegrated circuits (RFID) enter tourism industryMarket segmentation will become more sophisticated and specificIndividualization/personalization as an ongoing trendTravel agents reinvent themselves for personalized servicePromote customer centricityPersonalize with precisionDemographic changes and consequencesElderly people is increasing rapidlyFurther decrease in the average number of persons per householdExtend the experiencethe experience doesn’t begin at departure or end upon completion (e.g. virtual experience)Sustainable tourismGlobal catastrophes as facts of daily life
5 Barriers to e-business adoption The small size of the companyCosts of e-business technologiesComplexity of e-business technologiesLacking compatibility of technologiesSecurity risks and concerns about privacy issuesPerceived unsolved legal issuesThe difficulty to find reliable IT suppliers.
6 AgendaIntroduction and Industry TrendTourism EcosystemWhat is Cloud, Why Cloud – Rethink IT / Reinvent BusinessEnterprise Cloud ApproachCloud Adoption Patterns - Business Cloud ServicesInnovative Business Model for CloudSummary
7 The Travel Ecosystem Providers Air Hotel Car Other Global Dist Systems TraditionalOtherDistributorsTA/OTAOtherTravelers
8 Evolution of travel distributions “Push”“Pull”“Swarm”TravelerSocial NetworksTravel ProvidersMedia & AdvertisingTravel ProvidersTravelerDistribution NetworksMultiple IntermediariesOnline ForumsIntermediariesOn/offline AgenciesBrick & Mortar AgenciesDistribution NetworksShifting paradigms in travel distribution…Suppliers once controlled data and used this to their advantage, but as customers gained access to the same data they became adept at meeting their own needsThe continued flood of information is too complex and is adding to customer dissatisfaction with travel distributionTravelerTravel Providers
9 Hot Issues and Key Questions to Focus Hot issues in travel technology:exponential transaction growth / look to book ratiosexplosive distribution channel growthsingle view of customer / systems integrationcloud computingmobilegreen compliance / sustainability strategysocial networking / social mediadynamic packagingdescriptive/rich visual contentFor the tourism industry service providers, these are the key questions to focus:Which distribution channels are most / least effective?How does your travel distribution website compare to best-in-class websites?How do customers view travel distribution and fulfillment?Do current segmentation schemes match current and future needs?How can partner data be used to formulate a more robust view of customers?What capability gaps can partners fulfill more effectively?
10 To enable seamless travel: information aggregation and partner coordination must become top priorities in the travel industryThe journey toward seamless travelWill travelers be willing to pay for this service?Will the resulting analysis prove useful?Can customers interact with the information?Can the data be shared?Can the data be analyzed for travelers?Can it be delivered efficiently?Does the necessary data exist?Has it been stored for reuse?Can it be integrated with other data?Can the analysis be packaged?
11 AgendaIntroduction and Industry TrendTourism EcosystemWhat is Cloud, Why Cloud – Rethink IT / Reinvent BusinessEnterprise Cloud ApproachCloud Adoption Patterns - Business Cloud ServicesInnovative Business Model for CloudSummary
12 Cloud Computing – A Business Value Cloud computing is a model for enabling cost effective business outcomes through the use of shared application and computing services. The value …. if possible …. is better economics in the execution of business processes.UsageTrackingWeb 2.0SOACloud computing is a new consumption and delivery model inspired by consumer internet services.Key characteristics:On-demand self-serviceUbiquitous network accessLocation independent resource poolingRapid elasticityFlexible pricing modelsBusiness ServicesIT ServicesEnd User FocusedServiceAutomationVirtualization
13 Infrastructure Services Cloud: A Model for Shared ServicesCloud Computing is a model of shared network-delivered services, both public and private, in which the user sees only the service, and need not worry about the implementation or infrastructureConsumable web-delivered services requiring no installation, minimal setupPeople ServicesStandard Internet technologiesImportant roles for both public and private clouds.Business ServicesRapid provisioningApplication ServicesService layers separated by clean APIs, enabling composition.Flexible pricingPlatform ServicesBuilt on radically scalable, manageable, virtualized IT resourcesElastic scalingInfrastructure ServicesAdvanced virtualization131313
14 Infrastructure Services Clouds will be used at each layer, and stacked to easily create new solutionsCloud technologies offer operational expense reductions at all layersAgentsEnd UsersSupportCommunityPeople ServicesCrowdsourcingRetail BankingTrade & SC FinanceSingle Euro PaymentsMobile BankingFront Office OptimizationBusiness ServicesCustomer CarePaymentsInt. Risk Mgmt.Data Mgmt.VirtualizationWorkload MgmtSLA & CapacityProvisioningSecurityMonitoringDynamic ProvisioningProcess & Policy Mgmt.Problem & Change Mgmt.Service Cloud Business & Operations SupportFulfillmentAssuranceBillingMashup ServerUser ManagerService/Software CatalogsOpen SOA Foundation (WS Framework, Service Bus)CiC Design SpaceB2B PartnershipsManagement.ExperienceIndustry Frameworks & Information FoundationDistributed Cloud Computing ServicesApplication ServicesPlatform ServicesInfrastructure Services141414
15 Economics of Computing are Changing Business and IT are attracted to cloud for different reasonsRethink ITRapidly deliver servicesIntegrate services across cloud environmentsIncrease efficiency55%of business executives believe cloud enables business transformation and leaner, faster, more agile processes60%TransformationEfficiencyof CIOs plan to use cloud (up from 33% 2 years ago)Initiate new revenue streamsFaster time to market for new servicesFocus on differentiated processesMeet changing customer expectationsReinvent BusinessEconomics of Computing are Changing15
16 Businesses are seeing significant results Reduce IT labor cost by 50% in configuration, operations, management and monitoring.Improve capital utilization by 75%, significantly reducing license costs.Reduce provisioning from weeks to minutes and improve cycle timesEliminate 30% of software defects and improve quality.Reduce IT support costs by up to 40% for end users.16
17 Cloud perception is evolving EnablingThings are possible which were not possible beforeCreate new business modelsTriggers competitive advantageDisruptiveSpeedingSpeed of transformationLower barriers to innovateReduce risksIncrease productivityTransformationalAPIsNew servicesApplications built for CloudBrokeringOptimizingCost SavingsTime to marketCapEx to OpExReduced TCOPrivate CloudsCloud ManagementFurther AutomationEfficientIaaS20062007200820092010201120121717
18 AgendaIntroduction and Industry TrendTourism EcosystemWhat is Cloud, Why Cloud – Rethink IT / Reinvent BusinessEnterprise Cloud ApproachCloud Adoption Patterns - Business Cloud ServicesInnovative Business Model for CloudSummary
19 Enterprise Cloud Approach …workload optimizationDevelopment and Test; Desktop; Collaboration; Analytics; ComputeRapid return-on-investment and productivity gain…deployment choicesPublic, private, hybrid…integrated service managementService delivery, service request, service monitoringLowers operational costs, drives efficiency, enhances security19
20 Traditional On-Premises Key Consideration 1: What workloads to move to cloud and what application delivery model is best for that workload?Traditional On-PremisesInfrastructureas a ServicePlatformas a ServiceSoftwareas a ServiceApplicationsApplicationsApplicationsApplicationsDataDataDataDataRuntimeRuntimeRuntimeRuntimeMiddlewareMiddlewareMiddlewareMiddlewareO/SO/SO/SO/SVirtualizationVirtualizationVirtualizationVirtualizationServersServersServersServersStorageStorageStorageStorageNetworkingNetworkingNetworkingNetworkingStandardization; OPEX savings; faster time to valueVendor Manages in CloudClient Manages*Capex: Capital Expenses, *Opex: Operating Expenses
21 Workloads Matter: Cloud adoption is driven by workloads Readyfor CloudNew Industry workloadsCollaborative CareAnalyticsInfrastructure StorageMedical ImagingInformation intensiveIndustry ApplicationsFinancial RiskIsolated workloadsSensitive DataCollaborationEnergy ManagementHighly customizedMature workloadsWorkplace, Desktop & DevicesNot yet virtualized 3rd party SWBusiness ProcessesPre-production systemsComplex processes & transactionsDevelopment & TestMay not yetbe ready for Cloud …Infrastructure ComputeRegulation sensitiveBatch processing21
22 Enterprise Data Center Enterprise Data Center Third-party hosted and Key Consideration 2: What deployment model is best for a given workload?Private CloudManagedPrivate CloudHostedPrivate CloudShared Cloud ServicesPublic Cloud ServicesEnterprise Data CenterEnterprise Data CenterEnterpriseEnterprisesUsersThird-party hosted andoperatedFreeRegisterCredit CardClick to contractThird-party operatedPrivatePublicIT capabilities are provided “as a service,” over an intranet, within the enterprise and behind the firewallIT activities / functions are provided “as a service,” over the InternetInternal and external service delivery methods are integratedHybrid60% of CIOs plan to use cloud up from 33% two years ago…the majority being hybrid clouds
23 An evolutionary transformation to cloud is typical for enterprises and provides unique challenges In the enterprise cloud is an evolution, revolution and game changerEnterprise Cloud adoptionpresents unique challengesIntegration of cloud and traditional ITMigration over timeSecurity and compliance issuesGlobal business process transformationCloudShared ResourcesAutomateStandardizeVirtualizeTraditional IT
24 Transforming application development – end to end - for the cloud Defect AnalysisALM ToolsApplication VirtualizationRequirementsCloud Deployment Topology &Security ModelingImage/ & ServicesMgnt/MonitoringBilling &MeteringServices OptimizationsCloud Brokering / DeploymentProject InitiationRequirements AnalysisDesignDevelopmentTestDeploymentProductionIntegration : Cloud-to-Cloud ;Cloud-to-EnterprisexCloud TestingData SecurityMaintainCode Analysis & Reporting.Performance Testing ServicesWebsite & Mobile Application Performance
25 AgendaIntroduction and Industry TrendTourism EcosystemWhat is Cloud, Why Cloud – Rethink IT / Reinvent BusinessEnterprise Cloud ApproachCloud Adoption Patterns - Business Cloud ServicesInnovative Business Model for CloudSummary
26 Questions to ask the Cloud Service Provider at every layer All clouds will not be the same …Does your people cloud use knowledge-enablement and social computing to create increased value?Does your business cloud have deep industry capability that lets me benefit from the increasing returns of sharing (e.g., information)?Can your application cloud easily function as a component in my application?‘People’ ServicesBusiness ServicesDo you have platform and management technologies to overcome the potential complexities/downsides of multiple clouds.Application ServicesService Cloud LayersPlatform ServicesCan your cloud technologies to help solve “out-of-space, out-of-power” and lower costs? Quality of service?Infrastructure Services200020062012Static, dedicated, outsourcedNetwork-delivered, off-premisesShared, automated, dynamic2626
27 New Cloud Computing Architecture and delivery models are already changing the application and business services ecosystemKey Future technologies:Extreme AutomationHighly differentiated platform as a serviceFine grained cloud securitySeamless secure operations across private and public cloudDESKTOP AND DEVICESStoring files and applicationsremotely and pushing them toclients in real time.ANALYTICSTurning data into insight toanticipate businessconditions, avoid risks andcapture new opportunities.COLLABORATIONSimplifying and improvingdaily business interactionswith customers, partnersand colleagues.STORAGEPutting rapidly increasingvolumes of data in a locationthat is scalable and accessiblefrom anywhere.DEVELOPMENT AND TESTDeploying virtualenvironments for theconstruction of softwareapplications.
28 Cloud services Business Desktop Development and Test Reduce the cost of desktop hardware and managementSafeguard data and applicationsIncrease business flexibilityReduce complexity and energy consumptionDevelopment and TestAccess a security-rich, standardized test and development environmentReduce operational costs and large amounts of capital outlays,Improve cycle times for faster time-to-marketImprove collaboration and qualityVPN or dedicated circuitApplications and dataSystems (AD, DHCP, DNS)PCsThin clientsVirtual machinesConnection BrokerManaged Backup CloudProvide remote data protection with a managed, offsite data backup and recovery solution that is automatic, secure and reliableReduce backup windows with automated, de-duplicated technologies.Shift to a pay-as-you-use pricing model that enables predictable monthly costs and requires no up-front capital investment.Real-Time CollaborationWork beyond the boundaries of an organizationShare information more easily with customers, suppliers and Business PartnersLower upfront investment and operating costsReduce/eliminate IT staff for implementationAcquire services extremely easilyProvide work-ready integrated business applicationsRemote Recovery SiteCustomer Location(s)Wide Area Network (WAN)Web conferencingCollaborationMessagingServer and PC DataOffsite Data ProtectionRemote Data Protection Service Platforms
29 Business Process as a Service Software as a service coupled with deep industry insights, business process skills and analyticsE-Commerce on CloudHelping companies transform how they buy, market, sell and service goods and services with customers and suppliersHelping companies accelerate their ability to turn information into insightsIntegrate the collective knowledge of people-centric networks to accelerate decision-making, strengthen business processes, and increase innovationHelping cities of all sizes leverage information, anticipate problems and coordinate resources to deliver exceptional service to their citizensCloud SolutionsSoftware and Business Process as a ServiceSocial Business on CloudBusiness Analytics & Optimization on CloudBusiness Process as a ServiceSoftware as a ServiceBusiness Analyticsand OptimizationSocial BusinessCommerceSmarter CitiesSmarter Cities on Cloud29
30 AgendaIntroduction and Industry TrendTourism EcosystemWhat is Cloud, Why Cloud – Rethink IT / Reinvent BusinessEnterprise Cloud ApproachCloud Adoption Patterns - Business Cloud ServicesInnovative Business Model for CloudSummary
31 Major Technology Trends driving Business Change Mobile revolutionConnectivity, access and participation are growing rapidlySmart devices are becoming the primary route to get connectedDevices are getting smarter as they are increasingly enriched by mobile appsSocial media explosionSocial media is quickly becoming the primary communication and collaboration format“digital natives” use of technology and social media platforms is accelerating adoptionEnterprises are adopting social media but are struggling to realize the value and manage riskHyper digitizationDigital content is produced and accessed more quickly than ever beforeInternet traffic is growing globally driven by consumer use of video, mobile data, interconnectednessAn increasing number of connected devices and sensors is further driving growthThe power of analyticsNew capabilities for real time analysis, predictive analytics and micro-segmentation are emergingTop performing companies use analytics to drive action and business valueAnalytics are making information “consumable” and is transforming all parts of the organization, from customer intimacy to supply chain management
32 “Game Changing” Cloud Business Enablers Business Scalability2Provides limitless, cost-effective computing capacity to support growthCost Flexibility1Shifts fixed to variable costPay as and when neededMarket AdaptabilityFaster time to marketSupports experimentation3Ecosystem Connectivity6New value netsPotential new businessesMasked Complexity4Expands product sophisticationSimpler for customers/usersContext-driven Variability5User defined experiencesIncreases relevanceSource: IBV Analysis
33 Example: An online marketplace company Cloud enables businesses to reduce fixed IT costs and shift to a more variable, “pay-as-you-go” cost structureExample: An online marketplace company1Cost FlexibilityAn online marketplace company provides service to buy and sell travel-related goods. In addition to bringing buyers and sellers together, the marketplace offers product recommendations based on analysis of buyer preferences.The marketplace company uses cloud based analytics capabilities for its targeted marketing approach by renting hundreds of computers every night to analyze data from a billion views of its website.Cost flexibility of the cloud allows the marketplace company access to tools and compute power that only large retailers could afford.CharacteristicsShifts CapEx to OpEx, when and as neededShifts cost from fixed to variableGenerates faster payback and higher ROIThe cloud frees up capital by significantly reducing the need for IT investment
34 Example: An internet media company Cloud enables businesses to grow efficiently, expanding the range of business optionsExample: An internet media company2Business ScalabilityAn internet media company streams movies on-demand with large surges of capacity required at peak times.The company can use cloud to rapidly scale up its business without having to buy, support and operate infrastructure and resources to meet its growth requirements.CharacteristicsRapid / elastic provisioning of resourcesNo scale limitationsBenefit from scale economics without achieving large volumes on your ownCloud’s ubiquitous and nearly unlimited computing power drives scale economics and enables self-provisioning and peak/non-peak responsiveness
35 Example: An open application platform for TV Cloud enables businesses to rapidly adjust processes, products and services to meet the changing needs of the marketExample: An open application platform for TV3Market AdaptabilityAn open application platform for TV allows content providers and distributors to react immediately to changing consumer demands and deliver what the consumers want.Cable, IP and Satellite TV providers can create and deliver interactive, on-demand content dynamically to consumers on any device.Content providers, TV programmers and web content developers can create or change an application – for entertainment, commerce, advertising, social media, gaming or news and sports – and deploy it all-at-once for all end-users.CharacteristicsFacilitates prototypingSpeeds time to marketSupports rapid prototyping and innovationCloud-enabled services can be tuned for market dynamics and demand and then rapidly updated, revamped and deployed via web services
36 Example: the Mobile Print platform Cloud enables businesses to attract a broader range of consumers with elegantly simple solutionsExample: the Mobile Print platform4Masked ComplexityThe Mobile Print platform uses tools via a cloud to convert and process print requests from any mobile device (e.g. tablet, smart phone) to a printer.It can remove complexity for users – no need to understand / install / maintain printer device drivers for their mobile devices or targeted printers.It will reduce cost and management of supporting diverse end-user mobile devices, content-producing applications, network configurations and printer types.CharacteristicsExpands feasible range of sophistication in products and servicesMinimizes requirements of user to understand how product works or how to maintain itCloud-enabled services leave the complexity to the experts, delivering only outcomes to the end-user
37 Example: A cloud-based, natural language assistant Cloud enables businesses to create personal experiences that adapt to subtle changes in user-defined contextExample: A cloud-based, natural language assistant5Context-driven VariabilityThis is to support user defined preferences. Cloud can be used to store information about user preferences and enable the customization of product or service which is being delivered.A cloud-based, natural language “intelligent personal assistant and knowledge navigator” that relies on context to create a more personal, intimate interaction. Leveraging the computing capabilities and capacity of the cloud, the application “understands a wide variety of ways to ask a question, grasps the context and returns useful information in a friendly way, either audibly or by displaying results.CharacteristicsSupports context-driven, user-centric experiences (preferences, movements, behaviors)The computing power and capacity of cloud enables individualized, context-relevant customer experiences
38 Example: tourism value chain Facilitating engagement, alignment and innovation, cloud enables external collaboration with partners and customersExample: tourism value chain6Ecosystem ConnectivityNew value nets can be created including subject matter experts (SMEs), shared infrastructure and services from cloud service providers. Productivity can be enhanced through customer and partner interactions.In tourism value chain, cloud based platforms can support sharing of resources, processes and workforce between companies, hence it can also enable joint marketing and collaboration. The ecosystem connectivity enables efficiencies required in an emerging market to deliver quality tourism at low cost.CharacteristicsFacilitates new value nets of partners, customers and other external playersMore and more, companies are relying on collaborative ecosystems to provide the input for innovation that will drive their growth
39 Using cloud’s business enablers to optimize, innovate and disrupt business models …that are fuelling innovations across enterprise value chains and customer value propositions……empowering organizations to optimize, innovate or disrupt business modelsCloud offers six “game changing” business enablers …Cloud’s Business EnablersDisruptorsCreateBusiness Scalability2Cost Flexibility1Market Adaptability3Value ChainCloud Enablement FrameworkValue ChainInnovatorsTransformEcosystem Connectivity6Masked Complexity4OptimizersImproveCustomer Value PropositionContext-driven Variability5EnhanceExtendInventCustomer Value PropositionOrganizations need to assess themselves using the Cloud Enablement Framework and examine the potential to innovate by leveraging the cloud’s business enablers
40 AgendaIntroduction and Industry TrendTourism EcosystemWhat is Cloud, Why Cloud – Rethink IT / Reinvent BusinessEnterprise Cloud ApproachCloud Adoption Patterns - Business Cloud ServicesInnovative Business Model for CloudSummary
41 Six Steps to Getting Started with Cloud 1Develop the Strategic DirectionAnalyze Workloads, CollaborationSoftwareDevelopmentTest and Pre-ProductionDataIntensiveProcessingDatabaseERP2Determine DeliveryModelsEnterprisePrivatePublicHybridTradIT34Define the Architectural ModelServiceDefinitionToolsPublishingFulfillment &Config ToolsReporting &AnalyticsService PlanningRoleBased AccessOSSBSSInfrastructurePlatformSoftwareEndUsers, OperatorsCatalogOperationalConsoleCloudServicesCloud PlatformBuild the Business Case56Implement the Roadmap
42 Business Cloud Summary Cloud Computing is a model of shared network-delivered services, both public and private, in which the user sees only the service, and need not worry about the implementation or infrastructureThe Cloud has 5 distinct layers and value propositions. Very significant opportunities exist above the infrastructure level, where much of the cloud discussion has been focused previously.The Cloud model can be truly disruptive if it can reduce the IT operational expenses of enterprises: development, management, integration, and energy consumption.By reducing expenses and increasing efficiency and flexibility, the Cloud model of services can improve the way we manage travel, transport, airline, finance, mobile information, and more.In the long run, development of an enterprise will depend on composable web-delivered services on flexible infrastructure: that is, the Cloud.Moving to higher value business services with focus on “data”, “analytics” and “people”.
43 SummaryTravel industry was expected to be among the greatest beneficiaries of new, low-cost, information-rich distribution opportunities.More than a decade later, however, online channels have mostly focus on price.Now the new internet and cloud computing technologies and business models can offer the potential for online differentiation and the provision of value-added services and features for which tourists will pay for the services.To capitalize on these developments, enhance the tourists travel experience and create opportunities for improved financial performance,the tourism ecosystem must learn to use the new cloud computing to “play well” with all the others in the ecosystem.
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