Airline digital DNA and its role in digital technology adoption
Introduction
In this article we’ll be discussing the ability of airlines to adopt new systems and technology. Examples will be used which draw from over 10 years working with different airlines and MRO’s worldwide in numerous digital initiatives. Most of the examples will build on Engineering & Maintenance as this is still my own little biased interest as an aeronautical engineer, however, could just as easily apply to any other department in an airline.
What is meant by digital DNA?
We know from biology that DNA contains the instructions an organism needs to develop, function, and reproduce. It is formed at conception and does not change. However, the same DNA can express itself in different ways based on one’s environment. It’s the reason identical twins have different fingerprints. In this process, called “expression,” the instructions in the DNA are turned into proteins and other cellular products. To remain competitive in the digital era, organizations across all industries assess and build the digital capabilities needed to grow and exploit new business channels. However, digital transformation is not easy, irrespective of where you are on your digital journey.
The theory of digital DNA of organizations was embraced and further defined by Steve van Belleghem (2017) in his book ‘Customers the day after tomorrow’. He divides organizations in three DNA categories:
1. DNA type 1: Companies with an analogue DNA
These companies have been around for decades, long before there was any talk about digitalization. Mostly they have built their success on a good product, service or good sales organisation. Implementing digital solutions in these environments is challenging, both technically and human terms.
2. DNA type 2: Companies that started in the first or second phase of digitalization
These companies have a digital DNA, but many are 20 years or older; they are stuck in the early stage of the digital revolution and use technology that comes from 1998 and thus another century.
3. DNA type 3: Airlines that have started up in the third phase of digitalization
These companies are the youngest generation, in fact some even a response on the latest digital developments, and thus are fully up-to date.
These different DNA types reflect is the ability of the company to adopt new digital solutions.
Airline digital DNA types
The above-mentioned company DNA types can also be applied to airlines:
DNA Type 1 - Airlines have been around for decades, such as national flag carriers.
These airlines have tremendous amounts of legacy in both processes and data that needs to be cleaned up. This makes technology adoption in type 1 airlines very difficult. Both technically as well as in terms of the human element.
DNA Type 2 - Airlines typically are around 20 years old right now and established in the mid/late 90’s.
These airlines are an interesting group as they have digital in their DNA, however it is often based on technology dating to the late 90’s early 2000’s. Adopting new levels of technology such as automation, predictive maintenance and AI might prove a challenge.
DNA Type 3 - Airlines are those that have been established in recent years and have current digital possibilities as their starting bases.
These airlines will have no issue in adopting new technology as this is their reference starting point. They may however have difficulties in adoption industry legacy software’s that come from different digital times.
Importance to identify your airline’s DNA
As an airline head of engineering, head of maintenance or head of operations it is important to realize which digital DNA your airline has. This will determine how much effort it will take for your organization to successfully adopt a new system such as MRO software, Electronic Techlog, Electronic Flightbag, Flight Operations Systems, Fuel Management System, Analytics software, Robotic Process Automation or AI.
What is your digital airline DNA?
When trying to determine what kind of DNA type your airline has, you can ask yourself the following questions:
How long has my airline been around? Take into account any mergers, name changes or restarts of your airline
How is the age of your workforce distributed? Have they largely grown up with technology or did they need to learn how to use it? (below diagram might be helpful)
(PEW Research Centre, 2019)
How long will you be able to continue your operation once systems go down
Type 1 airline digital DNA. Now what?
So, what if you’re a type 1 analogue airline? Well, fear not, as a significant number of airlines fit in this category. By virtue of being around for such a long time there is a significant amount of process in heritage and data quality that needs to be considered here. It even can sometimes be on the level of “well we have always done it like this” or the mother of all evils “this is what makes us so unique and special”. Being an analogue airline does not mean that it becomes impossible to adopt new technology, it just means that it is increasingly important to be aware of the dynamics:
The organization changes slow. Agreeing on new processes, organization changes as a result of the new system or technology, even change in peoples job roles will not be easily accepted. Change management in a type 1 analogue airline is even more important than functionality of the new system. Typically, large project organisations with multiple levels will be required to ensure buy-in from all stakeholders affected. Newer systems will be deemed as a risk as it may not be used by many airlines yet. Trying to be an early adopter of new technology or systems will fail. You could consider setting up separate innovation business units to attract young professionals or partner with innovative companies. However, these will still be confronted with the same organization dynamics. It’s about accepting the pace at which your airline is able to adopt new technology and mitigate any risks as a consequence of that.
New systems or technologies are perceived in context of today’s challenges. As a result, questions need to be answered as to the cost, return on investment and efficiency gains that the new system or technology is expected to bring. The more tangible the numbers the more likely it will be adopted in your airline. The typical obstacle to overcome is the creation of a business-case document prior to being able to implement a new software.
Legacy data will need to be addressed. Most of the new system implementations will require a significant amount of aircraft data to be migrated. When putting this in an Engineering & Maintenance context we are often talking about the actual airworthiness data of the aircraft. This needs to be a well guided and systemized process in order to prevent potential larger issues once your new MRO/M&E system goes live (such as grounding aircraft).
These items of course do not mean that those type 1 airlines are not able to adopt new technology or systems. It just means that enough awareness most exist on different layers of the organization on the different dynamics that play a role in this and expectations to be managed accordingly.
Type 2 airline digital DNA. Balancing digital adoption and organization needs
As a type 2 digital DNA airline your likely to have been part of the first and second wave of digitalization. If your airline still remembers implementing an online application for ticket sales, you have definitely been around to witness the first wave of digitalization (birth of the internet and e-commerce). If this was there since the start of your airline, then your definitely part of the second wave of digitalization (mobile first). Here we can see two major challenges:
The tricky thing as a type 2 airline is that the organization is sufficiently technology oriented to understand its benefits however might struggle to adopt this as there is already a moderately historic presence of process debt and data quality issues that are buried underneath the surface. This puts you in a position that the organizations need for adopting new technology or systems is moving faster than the ability of that same organization to adopt and implement these kinds of systems. Typical examples include the selection of a new MRO/M&E software and then implementing this takes well over a year. Or the implementation of an Electronic Technical Logbook during which all of a sudden it seems everyone in the organization has an opinion and feels they are a stakeholder requiring to make decisions.
Most crucial for type 2 digital DNA airlines is to be sufficiently aware of this dynamic and to make sure suitable change management guidance is taking place. This however does not need to be of the same level as the previously discussed type 1 digital DNA airline. Most of the time a project manager with a small project team of business users which directly report to a project sponsor (preferably on executive level) is sufficient to drive a proper adoption of the new system or technology.
Type 3 digital DNA airline. Ideal world or biggest pitfall?
If your airline is of the type 3 kind, it’s likely that you have started operation in the last 10 years and or you have a workforce where the average age sits between mid-20 to early 30’s. Yes of course you have older and more senior staff, however they are mainly supported by a relatively young team. This scenario would sound like a dream haven for fast adoption of new systems and technologies. To a certain extend this is also true as you are working with an organization which is highly tec-savey and literally does not know a professional live (and to a large extend whole live) without the use of the latest of what digital tech has to offer. Potentially your airline already finds itself in the situation that if your MRO system is down for more than 30 minutes, aircraft cannot be released anymore by your engineers. Most certainly you are able to reap the benefits of an early adopter. However, you must be aware of the biggest possible of pitfalls when it comes to digital technology, which is:
“A new system or solution is the answer to any problem”
This technology bias (as I like to call it) is particularly risky as it leads to system implementations without proper care of supporting processes and organization impact which in its turn actually lead to a reduced adoption of the selected system and subsequent new systems implemented in the same way resulting in further misalignment. The most important thing for a type 3 digital DNA airline is to ensure its rapid adoption part of the DNA is kept and is complemented with enough guiding principles on how new systems or solutions are structurally embedded in the organization. Afterall it’s still aviation, and not a movie streaming service or social media platform where the risk of failure is only financial.
Change management 1:1 for systems and digital technology adoption by airlines
In the previous chapters we discussed the 3 different types of digital DNA an airline can have when it comes to adoption of new systems or digital technology. From this it became evident that change management place a crucial role for most of the airlines. As such we thought to shed some light on the most crucial aspect of change management, namely the matrix of effective change management approach.
The below picture shows this change management matrix:
The principle idea here being that you need all seven ingredients in order to properly implement a new system within your airline or MRO organization. Taking out on of the ingredients from this mix will result in the outcome as defined in the most righthand box of the diagram.
Over numerous different occasions we have seen both successful examples of good system adoption thru proper change management as well as seen some of the ingredients fail or degrade over time that led to a very troublesome system implementation. The most common pitfall that we have seen is the “sabotage” of the project by the organization itself by not providing sufficient time and attention i.e. resource to the project. This has always surprised us as dedicated time and attention seems the easiest of all the seven ingredients for a manager. It’s just about setting the priority and being ruthlessly clear about this. If you can dedicate sufficient time and attention of your team to the new MRO/M&E software implementation you should be honest to yourself in saying that it is then evidently just not one of the highest priorities for the organization right now and you should stop trying to see it as such. If you are still convinced that it is the highest priority, then it means you must make something else less important.
Conclusion
Digital technology adoption within airlines Maintenance & Engineering is highly dependent on the type or organization existing within the airline. This referred to as the type I, II and type III digital DNA airlines. Neither of these is types is better or worse than the other, however determine steps to take that will be successful and determine common pitfalls that existing in each of those organization types. Knowing the type of organization your airline is, will greatly help in the successful adoption of digital technology. Adoption of such digital technology will require you to view the implementation project as a change management project and as such requires you to ensure all required “ingredients” are in place in order to ensure a successful implementation of the new system or technology
How EXSYN can help you:
If you are currently undergoing a project to implement new technology in your airline or are considering to implement a new system, feel free to get in touch with us, we would be happy to discuss your digital transformation situation and how you best can approach it.