Electronic Ticketing Developing the Business

Electronic Ticketing

Developing the Business Case

An electronic ticket or e-ticket, as the name suggests, is the use of the electronic media usually, the internet, to book or purchase airline tickets. E-ticketing can also be done via the telephone but is not as popular as the booking of tickets through the internet. The use of e-ticketing has become so popular and feasible that it has now become a mandatory for all IATA members from June 2008. The e-tickets are stored in the airline's digital database and the customers can normally take a printout for their own recognition purposes. The advantages that most aviation companies provide with the e-ticketing process include the aspects of early check-in, getting confirmation outside of the airport premises with computerized payment and refund processes (IATA, 2009).

As of now, most airlines providing e-ticketing surfaces can only do so a total of 16 segments that comprise of the surface segments as well, as authorized by the IATA obligations. However, in recent months, under the Simplifying the Business program run by IATA, this is being switched to a 100% e-ticketing structure for airline bookings. According to stats, this change has resulted in the aviation industry saving up to a total of U.S.$3 billion ((IATA, 2009)).

Some of the most beneficial factors of E-Ticketing include the overall cost savings on the printing, mailing and postage of tickets, finance re-allocation, financial saving on the hired employees for the printing or delivering of tickets, barcode validation resulting in higher security, eliminating chance of loss of ticket as all the records are digitally stored, immediate delivery through simple printouts of details, the added information about destinations being visited like maps and places to go etc. And the opportunity to gain finances through providing space for online advertisements (Holtzman, 1999).

The phenomenon of Electronic Ticketing has fast established itself as a necessary means of booking airline tickets. The airport very rarely shows sights of anxious who search rigorously through their carry-on or bag to locate the ticket. Electronic tickets, according to an examination conducted by International Air Transport Association, a trade association that encompassed a total of 94% of global air travel responsibilities, projected that more then 92% of the tickets for air travel were purchased through the electronic ticketing system by the end of 2007 (IATA, 2009).

The same survey also shows that an approximate of 97% of ticket purchase was done through the electronic ticketing system by the end of 2007 in the United States alones. Most airlines all over the world are now turning to the phenomenon of electronic ticketing and aiming to gain a 100% ticket trade through that system in order to not only cut back on employee expenses but also paper wastage as will be explained a little further in this case (IATA, 2009).

The main aim of this paper is to develop and present a business case for the adoption of the electronic ticketing system in our airline, Efficient Airline, as a means to improve the overall cost benefit ratio in the company as well as improve overall efficiency of service, competitive edge and long-term profitability within the airline industry. Efficient Airline is a fast expanding airline in the aviation industry with an annual approximation of air travelers amounting to more than 8 million and visiting destinations totaling to 20 worldwide. The total number of ticket offices that Efficient Airline runs including the one that functions in the airport and the town office are 35 with the average segments/ticket coupons per passenger are normally at 3 segments/3 coupons; the total strength of sales and ticketing employees in the Efficient Airline company amount up to 200. More details of the Efficient Airline and its expansion to adopt the electronic ticketing system will be given in the Profile and Scope section later in the paper.

This paper will look at all the possible project management angles that will need to work efficiently in order to successfully establish the electronic ticketing system within the Efficient Airline company as well as justify this move by explaining the phenomenon of Electronic Ticketing, the potential changes in the structure that might occur with its implementation as well as recommend the appropriate risk management plan that could be adopted with the integration of the new system.

Project management

Project management is very simply a macro-managed effort to guide an idea towards completion and implementation within a specified frame of time. According to the guidelines given in the book "A Guide to the Project Management Body of Knowledge," there are five primary aspects that any and every project manager must keep in mind for efficiency and success (Project Management Institute, 2004). These five aspects are:

1. Initiating,

2. Planning,

3. Executing,

4. Controlling and

5. Monitoring, and Closing

Each and every stage in this particular aspect of project management bears its own importance and significance for the successful completion of an efficient and sustainable electronic ticketing structure. Initiating a completely new idea within a company structure can pose its own share of risks but in this case, the advantage was that the idea of electronic ticketing has already been practically tested and is proving to be more feasible in the aviation industry with the passage of time. There are many aspects that Project Managers (PMs) need to keep in mind in this first stage in order to define clear goals and objectives. One of the most important of these aspects are defining the knowledge areas that the entire team as well as the manager on a personal level need to be completely aware of in order to move forward with the implementation of a new electronic ticketing system (Project Management Institute, 2004).

According to the book "A Guide to the Project Management Body of Knowledge," the eight main knowledge areas, which are:

1. "Project Integration Management,

2. Project Scope Management,

3. Project Time Management,

4. Project Cost Management,

5. Project Quality Management,

6. Project Human Resource Management,

7. Project Communications Management,

8. Project Risk Management (Project Management Institute, 2004).

The first knowledge area, as the name suggests, involves the proper incorporation of a new program within an already established business structure. In this stage, it is very important to clearly define how the addition will help the performance of the system and why it was a necessary integration. Furthermore, strategies need to be developed that will help everyone, from the stakeholders, to the employees, to the clients, understand the functioning and utilization of the new process in the system. The second stage is directly related to the first stage. The scope management strategies are mainly designed to help sell the additional technology to the people who will use it. Scope dimensions help everyone understand how significantly the new technology will help the existing system and what could the impact of its incorporation in the long run. The third and fourth stages co-exist in many instances. Usually time management is associated with the completion of the project and then associated with the cost management in terms of how much financial costs are cut back due to the new technology or how much profit is made because of its integration. Cost management is also an important part of any project management structure as it deals with the overall budget allocation of the integration process (Project Management Institute, 2004).

Quality management is a very important knowledge area that needs to be mastered in any project management structure. Quality assurance is one of the guarantees that stakeholders and clients expect from their service providers and if the new project does not guarantee an enhanced level of quality with its integration then the chances of its adoption decrease significantly. Human resource and communications management are also interlinked in the domain of project management. The human resource, as the name suggests, is the employees that are hired for the completion of the integration as well as it sustainability. The availability of a strong and relevant human resource is very important for the integrity of a project as their work ethic will design the pattern for project ethics and their input will basically be the determining factor of the project's timely success and sustainability. Similarly, communications is an integral part of a project as effective communication can very easily take a moderate idea to success (Project Management Institute, 2004). However, the opposite also stands true, a great idea could be very poorly executed and fail if the communication between the entities involved is not lucid and at the level that it needs to be. Interpersonal skills are very important here as well as the development of good team dynamics. Hence keeping this in mind, for this particular business case, a simple communication model could be as seen in figure 1 below:

To modify this model according to the communication needed for the integration in the electronic ticketing system, the following model can be implemented:

Another aspect that can be incorporated in the above model after the re-evaluation section is the risk analysis section as risk evaluation is a very important aspect for any project launch. In the case of electronic ticketing, while the overall risk of the actual process of electronic ticketing has proven to be minimal for implementation, it is still very important that we run risk evaluation tests in order to see if the integration of the model of electronic ticketing will gel into out company structure as well as it has for other business structures.

Each of these eight areas is established throughout the process of any project management. In the very first stage of initiation, keeping in mind the phenomenon of electronic ticketing and its history, it will be very important to establish an integration program and a scope dimension in order to make clear the overall implementation process of the new technology across the company. Developing a business case here will therefore serve the purpose of defining the integration strategies and the overall potential scope of the technology within the Efficient Airline business structure.

In this business case, we will also give special attention to how the overall cost-benefit ratio will help the integration process. Another important aspect that we will pay special attention to in the first two stages is the overall risk factor that comes with the implementation of a new program. In this business case, we will thus highlight some of the risks that could potentially appear during the implementation process or after it and will also give recommendations on possible solutions.

Cost benefit model

The main purpose of providing the cost benefit model here in the business case is to give a clear idea of the overall savings and cost cuts that the company could potentially experience with the implementation of the electronic ticketing system. The table below will give an evaluation of the client services department that is mainly responsible for the reservation, ticketing and delivery issues and will analyze the effects on overall costs for Efficient Airlines when analyzing the ticket printing costs, ticket distribution and fulfillment expenses, human resource expenses and others.

AIRLINE COST BENEFIT MODEL

Effect of decrease in Costs

Department of Distribution -- including Reservation, Ticketing & Delivery

Driver

Direct Sales

Agent Sales

Impact

Electronic

Ticketing

Ticket Printing Costs:

1. STD Printing

X

X

Cost Cut

2. STD Wallets

X

X

Cost Cut

3. STD Printers -- depreciation, maintenance &cost of capital

X

X

Cost Cut

Ticket Distribution and Fulfillment Costs:

1. BSP and ARC

X

X

Cost Cut

2. Safe Custody and secure transport

X

X

Cost Cut

3. Envelopes

X

X

Cost Cut

4. Postage & courier

X

X

Cost Cut

5. Real estate: Ticket Offices, Call Centers & Airport Counters

X

X

Cost

Reduced

Radically

Manpower:

1. Managing safe custody and security of X

X

Cost Cut paper tickets/STDs

2. Issuance of STDs

X

X

Cost

Reduced

Radically

3. c. Lost tickets

X

X

Cost Cut

4. d. Exchanges and other post-fulfillment services

X

X

Cost

Reduced

Other Distribution costs:

1. Conversion to Direct, Web-sales

X

X

Asset

Cost

falls and Cash

inflow

Rises

2. Interline Sales Data purchasing from GDS

X

X

Cost Cut

In the table below, we analyze the direct impact that the use of a 100% electronic ticketing system will have on the overall client services patterns as they exist in the company now:

Driver

Impact

Electronic

Ticketing

Greater use of Self-Service Check-in:

a. Check-in Counters/Real Estate at Airports

Cost

Reduced

b. Boarding Card Printers -- depreciation, maintenance and cost of capital

Cost

Reduced

Customer Service:

a. No "Ticket on Departure"

Faster

Client

Processing

b. Standard, electronic record of ticket higher customer

Empowerment

c. Electronic Interline endorsement

Higher

Satisfaction

d. Voluntary and Involuntary Re-routing

On-time flight

Departure

g. Ticketing and Customer Service counters/Real Estate at Airports

Higher overall fleet utilization

Manpower

a. Managing Check-in

Cost

Reduced

b. Managing Ticketing and Customer service counters

Cost

Reduced

Significantly

c. Managing Post-flight reconciliation and ticket coupon sorting

Cost Cut

* Cost cut denotes the elimination of the driver and 100% cost saving

* Cost reduced denotes a major change in the driver's process of function with a cost saving percentage between 60%-80%

* cost reduced significantly denotes that major changes have occurred but major functionalities of the original process are still retained as support for the new structure and the overall cost saving percentages range between 30%-60%.

Project planning tools and techniques

The project planning tools and techniques which were necessary for the appropriate implementation of the e-ticketing integration in the Efficient Airline business structure; the first thing that was absolutely necessary was building a strong team. As discussed above, the human resource employed in any project is one of the main determinants of its success and failure. Hence the very first objective was to hire the personnel who were familiar with the e-ticketing structure and understood its advantages and disadvantages. This will hence be an in-house project (Heerkens, 2007). Understanding team dynamics will hence be also an important facet for the success of this integration. And one of the most important dynamics is the use of reward and punishment matrix, i.e. rewarding and acknowledging good team efforts and inputs and checking/modifying the efforts that are bringing down the overall process or the team.

The nest step is to analyze the need for e-ticketing within the current company structure. The business case that has been developed in this paper has highlighted the need for e-ticketing as an integral part of the company structure. The paper has also presented a financial breakdown of the cost-benefit analysis so to numerically support the advantages of e-ticketing that had been previously mentioned. Another important project technique that will be used in this process is the use and implementation of a modified communication process because that will allow us to perform re-evaluations and reality checks on the structure and it implementation. This particular aspect is important so that with the passage of time the unworthy and unnecessary aspects of the project can be eliminated and the appropriate aspects can be thoroughly implemented (Heerkens, 2007).

Another important too of Project management that will be incorporated during the six months of execution will be the use of appropriate communication channels that follow the model that has been exhibited earlier. That model will help apply an effective top-down and communication structure that will also work effectively the other way round. One of the other aspects that will be kept in mind while the project is in the process of completion will be to avoid and prevent all the post-project concerns, doubts or issues. This could be done through tactical planning or the use of various success metrics that are available for application from the business world and the aviation industry (Heerkens, 2007).

Project brief/scope (30)

The scope of electronic ticketing in today's era is huge. Everything is now technologically driven and e-tickets have made it a lot easier for passengers to purchase their flight tickets and confirmations without having to hustle to the airport and stand in line while still facing the off-chance that they won't be able to get on the flight that they want because by the tie their turn comes, the flight is full. In other words, it is more proficient and suitable for them. In addition to that, once the e-ticket ahs been booked, it will always be in the airline's database hence you can't loose your ticket. Furthermore, the scope of e-tickets is also vast because the customers can make changes in their itineraries without having to purchase new tickets with the changes.

In terms of the scope of e-tickets and their benefits within the firm, e-tickets reduce costs significantly as already shown in earlier tables. Furthermore, e-tickets pose an environment-friendly as saving the paper used up in printing paper tickets will save up to "the equivalent of 50,000 mature trees per year or about 5 square kilometers or 2 square miles of forest."

Efficient Airline aims to establish the kind of footing in the e-ticketing industry that the clients and customers want to be associated with because of its human and business values. Hence the overall brief of the e-ticketing structure within the Efficient Airline business structure will present the following aspects:

Mission Statement:

Nothing is more common than the wish to be remarkable (William Shakespeare). And our wish to be remarkable expands to the global front through effective communication and easy access to flight reservations and booking.

We believe so strongly in our e-ticketing services that we feel we will be depriving you of a great resource if we didn't do everything in our power to get the word out.

Objectives:

1. Involve all senses

See what hasn't been seen

Hear what hasn't been heard

Feel what hasn't been felt

Project what hasn't been imagined

We aim to involve our passengers in the overall services packages of the Airline by advertising and marketing on the e-tickets and the websites that provide the booking and reservation information.

2. Improve overall clientele base both in the corporate and social world.

We aim to improve the expanse of the airline in terms of the annual passengers as well as the total destinations through utilizing the costs saved from not printing paper tickets and relaying on electronic ticketing.

3. Adopt the Problem-solver approach

This simply means that "efficient airlines" will serve as a research engine also. The agency will invest time in analyzing consumer trends and the factors that pose a problem in e-ticketing work and projects and through quarterly publications provide solutions and alternatives.

Vision:

1. Ensure quality and efficiency in work and projects, e-ticketing and otherwise

Positioning:

Engage a percentage of savings from the e-ticketing process in charity or pro bono works across the country

Fund the activities of charity organizations and advertise their work for free based on the findings from the problem-solver approach on the e-ticketing booking sites. This will also pose a community development stance of the company, one that hadn't existed before but was now doable because of the savings and cost cuts experienced with the integration of the e-ticketing system. Furthermore, the e-ticketing site will also have a link to guide the visitors to a page where they can donate money from a minimum of $5 to a maximum of $1,000 for charity organizations that will be affiliated to the Airline Company.

Product Brief -- Efficient Airlines "E-ticketing" structure

1. Target consumer

Segmentation

North America -- USA (change if location different)

Demographics

Three primary target audiences: one) the business organizations and customers; two) the international organizations; 3) those who have access to the internet and are inclined towards purchasing tickets online

Secondary: organizations that need image rebuilding or crises management advertising on online sites

Psychographics

Those who appreciate

- Quality over quantity

- Sense and sensibility

- Researched e-ticketing solutions

- Effective and noise-free communication from the booking/reservation to the boarding

2. Rational/emotional benefits

Rational

timely booking and reservation security of tickets easy 24-hour access easy itinerary updates

Emotional

Can conduct purchase and booking in the comfort of their homes

No worries on missing a flight

The opportunity to invest in human spirit through pro bono activities

3. Competitive context

Analysis of competition

List

4. Benefits offered by competitors

- Long-term experience in the e-ticketing industry

- Established Networking

- Established equity or image for stakeholders, clients and masses

5. Brand Equity

Purchasing tickets would no longer be just about going one place to another but will also be a way to improve and enhance one's way of life

Vision - what we want it to stand for a modern, diverse, professional and ethically sound e-ticketing structure that offers premium services and extended quality to the customers

Perspective -- what we want to add to its equity standing in the long run

A recognized, trusting, legally sound and clientele based airline company

6. Product news

The e-ticketing structure in "Efficient Airline" will be an efficient and convenient portal for customers to purchase and book tickets as well as get involved in community development.

Strategy for the implementation of change at the completion of the project

According to the obligations of IATA, the company integrating a new system, like the e-ticketing structure, can make use of running campaigns on print, electronic, outdoor and digital media to make their clientele base aware of the new change and how they can use it. They can update links on their websites or use the much preferred IATA strategy of "StB's preferred partner program" through which a group of companies helps in spreading awareness through affiliations. According to the StB standards, it is also important to offer professional training to all employees being hired in the e-ticketing department, as well as regularly and appropriate updating their clients and stakeholders about the project and its progress (IATA, 2009). The following diagram shows the different ways in which IATA under the StB program supports the implementation of change within a system to go over smoothly with the clients, the stakeholders as well as within the company.

Hence, keeping the above standards in mind, we will need to make sure that the in-house teams run campaigns internally to continuously engage all the employees of the company in the new process and brings in outside services when needed to promote the campaigns on a much more extensive level. Furthermore, we will also need to stay in professional contact with those companies and organizations that have utilized the e-ticketing structures as well as consult business professionals who could help plan project management strategies in a much more comprehensive and foolproof manner. Furthermore, we will also study the general recommendation that have been given regarding the integration of e-ticketing processes over the years.