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Operational Fragmentation Between Entities And Cross-Industry Integration

What airlines, hotels, retailers and healthcare providers need to know

6Feb

Enterprises in a variety of industries confront a longstanding challenge of integrating disparate and discrete functional and operational silos. Finance departments struggle to share data with sales and marketing. Processes related to order fulfillment don’t properly link up with inventory systems. The issue is particularly onerous for businesses seeking to leverage data analytics to enhance the customer experience. How, for example, can a restaurant easily access a diner’s past orders to offer special menu items?

The problem is getting thornier, as companies must increasingly communicate and share data not only with other business units within their organizations, but with companies in other industries. Consider the airline value chain. The goal of a connected travel experience characterized by convenience, tailored offers of premium products and, personalized service. Delivering on the promise requires coordination and collaboration between airlines, travel authorities, retailers, rental car companies and hospitality firms.

The problem is, today these various entities manage data only at certain touch points on the customer's journey. Airlines own passenger reservations and frequent flyer data, airport authorities manage security and TSA data and retailers, hotels and rental car companies manage buyer and bonus point data. So part of the challenge lies in consolidating and managing data from these various sources. To complicate matters, there’s the issue of navigating the gray areas between where one entity’s responsibility ends and another’s begins. And when it comes to taking ownership of a problem that arises, the air travel value chain often resembles a game of hot potato.

Cross-industry integration is also assuming a higher profile for the healthcare and retail industries, specifically for pharmacies. The implications of the recent CVS/Aetna merger underscore an emerging trend of pharmacies taking on a more prominent role in the delivery of health services. In areas such as detecting undiagnosed conditions such as diabetes, they are providing referrals and helping patients manage the long-term use of medication. In this environment, retail strategies for pharmacies must address both health information management challenges as well as competitive imperatives for customer insight and personalization.

Whatever the sector, organizations pursuing cross-industry integration are pursuing multi-faceted digital strategies. These are aimed at delivering data integration and analytics, platform standardization, process optimization and a positive consumer experience. These digital strategies must address both underlying operations and infrastructure to integrate or replace legacy systems. They also need to enhance capabilities around front-end, customer-facing applications. Automation and cognitive technologies have a central role to play, in terms of driving cost savings and productivity improvements, easing the transition away from legacy environments and gleaning customer insights from massive volumes of data. Moreover, in addition to driving the transformation to the future state, the strategy must support digital governance to enable security, stability and continuous improvement and optimization.

Airlines, retailers, CPG firms, hotel chains, healthcare payers and providers and other firms are increasing their focus on expanding their operational ecosystems. The ability to identify and eliminate operational fragmentation between entities will emerge as a competitive imperative, and a key foundational element of a viable strategy of digital transformation.

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