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The Splinternet: A Global Business Challenge

One of the biggest challenges we face in travel IT comes from the diversity of products and tools in the market -- what is now referred to as the “Splinternet.”

By nature, the travel industry is reliant on the complex network of varied Global Distribution Systems (GDS). A global delivery system, such as Amadeus or Sabre, allows for selling tickets from multiple airlines and booking multiple hotels. But these GDS solutions can be very market-specific, allowing for one system to predominate in the United States and Canada, another in the U.K., and yet another in Asia-Pacific. It therefore is very difficult for a company with global implementation to work with common standards. Instead, you wind up building technology silos in different markets and different locations. That, without a doubt, makes it an expensive proposition.

Stay Flexible to Meet Global IT Needs
NIIT works within these challenges with a global delivery team, and we have an online forum where they all converge across time zones and technology silos. We are constantly trying to create synergies and have them build systems that would work across geographies, but we keep encountering markets like Japan or the European Union that have very specific challenges and need specialized answers.

The Splinternet Challenge Grows Tougher
The solution would be to use common standards across the industry, and some major GDS companies have tried to move in that direction by generalizing their products to cater to global markets. So far, they’ve had limited success. In fact, the situation is getting worse.

American Airlines created a furor with its recent declaration that it will work through its own distribution channel and likely circumvent established GDS systems, since most of them charge a fee. Expedia, for one, can no longer sell tickets for American flights. If and when other airlines make the same move when their agreements come up for renewal over the next two years, it will be a paradigm shift away from the industry’s traditional distribution methods. That will make life a little more complicated for IT on both sides of the fence.

Plan Carefully for Global Business
There’s not much IT can do about the Splinternet. Your only defense is to build forward -- thinking out new systems very carefully, and to plan for all the different adaptations, standards and moves that are likely to arise in the industry if your business touches global boundaries.

I will go a step further and caution business leaders that they must consider these strategic issues even before deciding which markets to enter. The general industry practice on the ground is for business to take each scenario as it comes and then throw it across the fence for IT to deal with by finding a solution that works. Sometimes these decisions are made before anyone understands the technological challenges they will create. It’s better to identify those technology challenges before making the decision rather than the other way around.

I believe that, going forward, some business leaders may change their minds about entering new global markets once they fully understand the technological implications of what seems rational to business.

Copyright (c) 2011 Studio One Networks. All rights reserved.


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