Six questions every executive in

Airlines, Freight and Travel Services

should ask about cloud computing
Airline, Freight and Travel Services executives need to evaluate what cloud
computing can do for their business. Asking the right questions is the place
to start.
By Robert Zippel, Christian Tueffers and Alan Healey
2
Given the momentum behind cloud computing across so many
industries, it is not surprising that Airline, Freight & Travel Services
companies are beginning to evaluate its potential and to capitalize
on the benefits it offers. When assessing what cloud can do for
their businesses, Airline, Freight and Travel Services leaders need to
take into account the distinct and rapidly-evolving challenges that
their sector faces today, as an era of restricted access to capital and
volatile energy prices coincides with sharply-rising expectations on
the part of customers.
While the airline industry is expanding with traffic driven from a
multi polar world, it also faces a need to adopt multiple and more
complex business models while improving cost and profitability.
The freight and logistics sector is increasingly driven by customers
demand for higher speed and lower cost. And travel services
companies face a pressing need to expand their reach and become
more customer-centric.
Against this background, Airline, Freight & Travel Services companies
need to rethink the way they manage their operations, workforces
and relationships. For example, airlines are facing a dramatic
widening in their circle of contact, as they try to manage a huge
number of direct touchpoints with their customers. Similarly, travel
service providers like hotels and casinos are facing the challenges of
selling more offerings direct to customers while handling peaks and
troughs in demand. And, in an era of high fuel prices, freight and
logistics companies are wrestling with how to make their overall cost
base lower and more variable.
Cloud computing solutions could undoubtedly help Airline, Freight
& Travel Services companies to address these challenges, as well
as opening up opportunities to work in new ways, align IT more
effectively with business need, and reduce operating costs. But
questions remain about issues such as the security of customer data
and the reliability of cloud offerings. Also, while cloud computing
promises to deliver a wide and powerful range of capabilities,
this emerging technologys relative lack of settled infrastructures,
operating models and service providers makes it hard to evaluate its
longer-term costs and risks.
What is clear is that, in the years to come, cloud will reshape how
computing strategies are developed and managed, how information
is controlled, and how the economics of business technology
are applied in the Airline, Freight & Travel Services. Experience
shows that the effects of the cloud vary widely between different
industries, and even different companies in the same industry.
Faced with such uncertainty, it is all too easy for decision makers
to succumb to analysis paralysis or to leave all decisions to the IT
department. Cloud computing is too important for such a hands-off
approach.
3
The Airline, Freight & Travel Services
sector is a diverse global industry that
is currently facing widely differing
market conditions, pressures and
opportunities in its various markets.
Here are four pressing issues for each
sector of the industry.
Airlines
1. A rapidly-expanding circle of
contact
With broadband penetration rising,
airlines are facing a shift towards
conducting their entire value chain
over the Internet not just selling
tickets direct to customers over
the web, but also taking additional
service elements online such as
check-in, loyalty programs and real
time flight information. In turn, this
move to online channels is driving
rapid expansion in airlines circle of
contact with customerswho are
also becoming increasingly savvy and
demanding. As Figure 1 shows, airlines
are now more likely to cite improving
passenger operations as their top IT
investment priority, ahead of other IT
investments such as flight and aircraft
operations.
2. Intensifying competition
Across all markets, low-cost carriers
(LCCs) have proved that lower fares
universally stimulate air travel growth.
Particularly in Europe, the rise of
the LCCs is just one element of an
increasingly competitive landscape,
with high-speed trains and video
conferencing also challenging for
travel spend. The competitive pressure
has already led to a number of airline
mergers and code-sharing alliances.
3. Margin pressures
High and volatile fuel prices are
creating pressure and uncertainty
around airlines cost bases and
margins, driving them to target
auxiliary revenue streams such
as booking fees and selling goods
on board. In the future, additional
revenues will come from an expanded
range of on-board activities and
communication services.
4. Security risks and regulation
Security risks and regulation are on
the rise globally, imposing overheads
such as new safety reporting
requirements, longer processing times,
bio-metric screening and advanced
scanners at gates.
Figure 1. Airlines IT investment priority areas
Source: SITA Airline IT Trends Survey 2010
1
Priority 5 Priority 4
Passenger operations
Flight operations
Aircraft operations
Passenger security
Distribution & CRM
IT Infrastructure Upgrades
Employee security
Business support functions
44 35
37 46
35 41
33 35
27 41
21 34
21 33
15 31
4
Freight and logistics
1. Advancing globalization and
customer demands drive integrated
models
Since the 1980s, ongoing globalization
and rising customer expectations
have seen the freight and logistics
industrys offering advance from
contract distribution via logistics
outsourcing to todays integrated
supply chain management. Companies
now need to follow their customers
and expand their skills base and
geographic footprint, leveraging value-
added services and increasingly global
coverage to drive growth.
2. Ongoing consolidation into one-
stop shops
Customers growing preference for
one-stop integrated logistics service
providers offering supply chain
integration has played to the major
3PL providers economies of scale, and
is driving significant M&A activity.
3. Technology renewal is imperative
The average age of core systems in the
freight and logistics sector has been
on a steady upward path, and is now
approaching 20 years in many cases.
As a result, there is an increasingly
urgent need to modernize and renew
core systems. Howeverother than
in the passenger-facing areas of
the businessthere is also a lack
of established packaged IT service
providers on a par with the likes of
Amadeus and Sabre. Freight and
logistics companies need to upgrade
and renew their IT to expand core
processing power, capitalize on web
enablement, and harness distributed
technology tools such as RFID and
GPS.
4. Fuel prices and economic cycles
demand lower and more variable
costs
Freight and logistics providers margins
are being squeezed between rising
fuel prices and customers demand
for more cost-effective logistics
solutions. Also, business volumes in
freight and logistics closely reflect
economic cycles, meaning the industry
experiences pronounced peaks
and troughs. These factors mean
companies need to move away from
high fixed costs to a more variable
cost base.
G
l
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b
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1985-1995 1995-2000 2000+
Integrated Supply Chain
Management
Contract Transportation/
Distribution
Logistics Outsourcing
Single function
Transactional
Asset heavy, process execution
Local, regional
Integrated multi-functions
Strategic partnerships
Information/knowledge focus,
integrated IT solutions
Global, door-to-door coverage
Figure 2. Evolution of freight and logistics services, 1985-present
Source: Accenture analysis
5
Current Future
Level of Integration with Suppliers
Business Model
Not Integrated Integrated Packaged Offers Flexible and Dynamic Packaging
Customer-Centric
Transaction Based
Traditional
Tour Operator
Integrated Tour
Operator
Flexible
Customer-Centric
Tour Operator
Figure 3. Travel companies increasing customer-centricity
Source: Accenture analysis
Travel services
1. Disintermediation drives the direct
circle of contact and dynamic
packaging
Like airlines, travel companies are
experiencing a dramatic widening
in their circle of contact, as the
boom in direct online sales drives
disintermediation and creates more
direct interaction with more and
more consumers. Consumers are also
demanding accurate, unbiased and
personalized information, and want
dynamic, personalized packaging that
enables them to choose the service
elements from multiple providers. In
response, the industry is moving from
the traditional transaction-based
model to become truly customer-
centric, more closely integrated with
suppliers and in direct contact with
customers (see Figure 4).
2. Increasing distribution complexity
Travel service companies direct
contact with customers is taking place
via an ever-widening array of channels
including smartphones and tablets,
driving a need for effective multi-
channel management. Combined with
customers rising expectations, this
trend is also increasing the scope of
services that travel services companies
must provide, including location-based,
just-in-time and mobile services. And
they are facing a dramatic increase in
volume search and pricing activity.
3. Moving from knowing your
inventory to knowing your
customer
All these trends mean travel service
companies are shifting from a position
where their core differentiation lies in
knowing their inventory, to one where
it is based on knowing their customers.
This demands the ability to capture
and analyze massive volumes of data
across a fragmented customer base,
and to shift from transaction-based
models (based on booking/reference
number) to client centric models
(based on a unique customer reference
number).
4. Standardized IT solutions gain
traction
The travel services industrys need
for lower and more variable costs is
accelerating companies migration
to standardized, off-the-shelf
applications. These are increasingly
being accessed and used on a
cloud-style software-as-a-service
(SaaS) basis, a trend reinforced by
the increasing maturity of the SaaS
offerings available to the industry.
Six key questions
As with most technologies, the
significance of cloud computing differs
widely from industry to industry.
Accenture has identified six key
questions that Airline, Freight & Travel
Services decision makers should ask
about this still-new phenomenon.
By focusing on these questions,
executives can narrow their inquiries
and start to identify opportunities
and risks that will impact their own
companies. We will now examine each
of these questions in turn.
6
While each of the three segments of
Airline, Freight and Travel Services face
distinct challenges, there are several
common themes. Cloud computings
characteristics in terms of lower cost,
higher flexibility and speed could help
companies across all segments to
address many major industry issues:
1. Increasing circle of contact The
flexibility, interconnectivity and
effectively unlimited processing power
offered by cloud computing could
make it ideally suited to managing
and optimizing the interactions with
this widening circle of contact across
multiple platforms.
2. Globalization and the shift to the
East As Airline, Freight and Travel
Services companies shift their activities
towards new and emerging markets,
cloud could support the operational
flexibility, agility and fast integration
needed to create and incorporate new
operations and offerings.
3. Enhanced customer focus and
responsiveness Clouds scalability
and flexibility can help to provide
companies with a cost-effective way
to source and manage the storage,
processing and analytics capacity
needed to segment and target
customers more effectively, while
dialing the service up and down with
their business needs.
4. More competitive cost base
Cloud can enable and support the
blend of low and more variable costs,
innovation and rapid responsiveness to
customer needs required for all Airline,
Freight and Travel Services companies
to differentiate themselves in an
increasingly competitive environment.
5. Greater integration throughout
supply chains Clouds embedded
interoperability and use of web
interfaces facilitates integration and
data sharing with business partners
and customers, supporting closer
integration and better visibility along
Airline, Freight and Travel Services
supply chains.
6. Consolidation Similarly, cloud
computings embedded interoperability
and use of web interfaces can make
post-merger integration and the
creation of strategic alliances quicker
and less costly.
7. Tapping into new and auxiliary
revenue streams Clouds flexibility
and faster development time for new
applications could help Airline, Freight
and Travel Services companies reconcile
the conflicting pressures to achieve
lower and more variable costs while
managing an increasingly complex and
expanding range of revenue streams.
8. Security and regulation These
issues create a need for accurate,
distributed tracking and monitoring
combined with robust centralized
reporting and analytics, playing to the
strengths of cloud computing.
How cloud could help Airline, Freight & Travel
Services companies address their industry
issues
7
8
At its most basic level, cloud
computing allows users to obtain
computing capabilities through the
Internet, regardless of their physical
location. Computing clouds are in
essence online, supersized data centers
containing hundreds of thousands
of servers hosting web applications.
Cloud services from raw infrastructure
to complete business processes can be
purchased through web interfaces and
turned on and off as they are needed.
The characteristics of cloud services
include:
Little or no capital investment
Variable pricing based on
consumption; buyers pay per use
Rapid acquisition and deployment
Infinitely scalable
Lower ongoing operating costs
For businesspeople, cloud computing
can seem too good to be true: plenty
of computing power, no expensive IT
infrastructure. Cloud computing lets
organizations bypass the expense
and lead time of buying, installing,
operating, maintaining and upgrading
the networks and computers found
in data centers. Instead of licensing
software, users tap into a service when
its needed for as long as its needed.
All that is required is a broadband
Internet connection and a mobile
device or personal computer with a
browser to access and activate the
cloud service. As with most utilities,
organizations pay by the kind and
amount of services used, plus any
additional fees.
Different forms of cloud
The basic technologies that underpin
cloud computing are well established
and can be duplicated by any
organization. This makes it possible for
companies to potentially build private
clouds restricted infrastructure that
uses cloud computing technologies
but is only shared by approved
organizations. Private clouds can
be used within single companies or
possibly be shared with business
partners. Public clouds the size of
those run by Microsoft, Amazon and
Google require additional technologies
so they can support many millions
of users around the world without
becoming sluggish.
2

Both public and private clouds can be
broadly categorized into four levels.
At the infrastructure level, companies
are sourcing raw computing resources,
processing power, network bandwidth
and storage from the outside on an
on-demand basis. These resources
are also known as infrastructure-as-
a-service, or IaaS. At the platform
level, cloud-based platform-as-a-
service (PaaS) environments provide
application developers with similar
functionalities to those available in
traditional desktop, including tools
for development, testing, deployment,
runtime libraries, and hosting.
At the application level, cloud-based
application-as-a-service offerings,
also known as software-as-a-service
or SaaS, are available via standard
browsers, supporting device
independence and anywhere access.
And at the business process level,
cloud-based solutions, also known
platform-based business process
outsourcing (BPO), offer an Internet-
enabled, externally provisioned service
for managing an entire business
process. This differs from application
clouds in that it provides end-to-end
process support, covering not just
software but also people processes
such as contact centers.
1. What is cloud computing, and how does it
work?
Figure 4. Initial opportunities for using clouds
9
The three top benefits of cloud
computing talked about today are
cost, flexibility and speed to market.
However, forward-looking companies
are thinking about how cloud
technologies will change the face of
their operations (see question 5).
Cost
Low prices on cloud services are a big
part of their allure. For example, a major
pharmaceuticals group was reported
to have paid Amazon Web Services
only $89 to analyze data on a drug
under development a job that would
have required its researchers to buy 25
servers to perform in-house.
3
Add the
savings from eliminating the cost of
servers, software licenses, maintenance
fees, data center space, electricity and
IT labor, and the benefits of replacing
a large up-front capital expense with a
low, pay-for-use operating expense, and
the financial appeal of cloud computing
is obvious. These cost benefits can
extend to companies own business
processes, since cloud computing
offerings can be used to optimize
processes both for quality and cost.
Flexibility
Clouds offer extraordinarily flexible
resources because of their technical
design. Clouds can be summoned
quickly when needed, grow by
assigning more servers to a job, then
shrink or disappear when no longer
needed. That makes clouds well suited
for sporadic, seasonal or temporary
work, for finishing tasks at lightning
speed and processing vast amounts of
data, and for software development
and testing projects. Clouds can also
supplement conventional systems
when demand for computing exceeds
supply. And since they are an
operational expense, cloud services
can often bypass the capital-expense
approval process, and thus be quicker
to procure than conventional systems.
In the case of the pharmaceuticals
company mentioned above, using
clouds shaved three months off the IT
budget and approval process, resulting
in faster time to market and $1 billion
in opportunity costs avoided. Also,
cloud will facilitate the move from the
current generally fixed cost base of IT,
to more variable costs that are more
closely aligned with the day-to-day
needs of the business.
Speed
Cloud technology has the potential to
empower a programmer to create a
software service using free or low-
cost development tools, and quickly
make it available to allthus bringing
innovations to market faster and at
lower cost. This capability can help
organizations to become more agile and
responsive, and to deliver innovative
business approaches such as offering
their key capabilities as a service,
as well as increasing their ability to
impose a standard set of applications
or processes enterprise-wide. For those
applications that require a great deal of
IT infrastructure (servers and storage),
cloud can significantly shorten the lead
time to procure, deliver, and install the
service. Overall, a properly implemented
cloud architecture can mean the time
and costs of provisioning an innovative
IT service have never been lower.
2. What benefits can cloud bring to my
company?
Business Continuity
(Storage)
Extensive storage
Backup and recovery
Legacy
Specific existing infrastructure
Complex legacy systems
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I
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Value to the Enterprise
Batch and Data Intensive Applications
One-off applications that dont rely on real-time response
Data and high performance intensive applications (financial
risk modeling, simulation, data compression, graphics rendering)
New back-office applications
Software Development and Testing
Software development and testing environment
Performance Testing
Non production projects
R&D activities
Reduced time to market
Peak Load Demands
New business activities
Applications w/ peak-loads
Seasonal websites
Applications with scalability needs
Hard
Easy
Sensitive Applications
Regulation-protected data (HIPAA, SOX, PCI)
Desktop Productivity
Web 2.0 applications
Workgroup applications
Office suites
Email and calendaring
High Value
New Businesses
Provide IT support for new ventures
Geographic Expansion
Replicate standard processes in new
locations and branches.
Source: Accenture Technology Labs
10
Alongside the potential benefits
around cost, flexibility and seed,
cloud computing has the potential
to help address specific issues within
each segment of Airline, Freight &
Travel Services. As well as enabling
more effective interaction direct
with a wider circle of contact, clouds
power, flexibility and scalability make
it ideally suited to act as a service
innovator engine for testing out and
implementing new, higher-value
services quickly and efficiently. It
will also improve companies ability
to integrate and capitalize on new
technologies as they emerge. And
clouds ability to scale IT capacity
up and down with business need will
lower costs and limit unnecessary
emissions from IT, thereby reducing
environmental impacts.
Challenges in the airline
sector
For airlines, cloud computings most
significant impact may be in enabling
them serve and interact with their new
and wider circle of contact quickly
and cost-effectively across a variety
of platforms, while also enabling
companies to flex capacity and
costs in line with peaks and troughs
in activity. Many industry loyalty
programs are already being outsourced
or transferred into a separate entity to
shift them from being a cost center to
a profit centerand these analytics-
heavy applications would be a natural
fit for cloud solutions. The reach and
power of cloud can also facilitate the
collection and analysis of detailed
aircraft performance and operations
data, as well as a mass of personal
biometric information, for regulatory
and security purposes.
Challenges in freight and
logistics
The tendency for business activity
in freight and logistics to follow
economic cycles means the ability
to dial cloud solutions up and down
flexibly is ideally suited to this sector.
Cloud services can also act as an
enabler for industry consolidation,
by making it quicker and easier to
integrate acquisitions. It could also
help companies meet the widespread
requirement to renew existing
technology assets, at the same time as
lowering their cost base and making
it more variable. Freight and logistics
companies move to integrated supply
chain management models demands
a higher degree of collaboration
and integration with suppliers and
customers, which could be facilitated
by the flexible power and connectivity
of cloud services. And a vast array of
fixed and mobile devices and sensors
can be connected to the cloud-enabled
platform to drive service insight and
sophisticated analytics, optimizing
both service to customers and
revenues.
Challenges in travel
services
As travel services companies circle
of contact expands, cloud computing
can help them bypass traditional
intermediaries in the supply chain and
interact directly with the customer
via multiple channels, including Web
2.0 and mobile. The demands of
the industrys increasingly dynamic
packaging and complex supply chain
can be met by using cloud computing
to source and integrate a wide range
of services, which can be dialed up
and down flexibly on an elastic basis
to service peaks and troughs. The
scale, capacity and power of cloud
services make them ideally suited
for supporting the data collection,
storage and analytics capabilities that
travel companies need to build deep
customer understanding. With its
growing usage of standardized SaaS
applications, the industry is already
moving towards a cloud-type model
for many of its computing needs.
3. How can cloud computing help address the
specific challenges my company faces?
KLM airline picks Google Apps
for crew
4

KLM Royal Dutch Airlines has
moved 11,200 of their crew
members to Gmail as part of
their Google Apps Premier Edition
deployment. KLM crew members
will now be able to send and
receive email effectively from any
location and using any Internet
connected device, including
personal laptops, shared computers,
BlackBerry devices, mobile phones,
or PDA devices. The adoption of
Gmail marks KLM's move to cloud
computing. With 25 GB of storage
per account, Gmail provides them
with a powerful, intuitive and
efficient messaging platform with
integrated IM (Google Talk) and a
series of additional features that
facilitate communication.
Caspio Announces Enterprise
Agreement with U.S. Postal
Service
5

Caspio Incannounced an
enterprise customer relationship
with the United States Postal
Service (R). The federal agency
joins a long list of other notable
government agencies, Fortune-500,
education, and media organizations
that utilize Caspio's platform-as-
a-service (PaaS) cloud computing
technology. Leveraging Caspio's
proven "no-programming"
approach to building database-
driven web applications, tech-savvy
business users and IT professionals
improve time-to-market while
simultaneously reducing IT costs
and project backlogs. The platform
incorporates a built-in database,
point-and-click tools, and a highly
scalable hosted infrastructure.
11
CIOs say they are finding real savings
from cloud computing. Accenture
estimates its own IT organization could
save up to 50 percent of its hosting
costs annually by transferring most
of its applications to infrastructure
clouds.
6
Bechtels CIO benchmarked
the companys internal data center
and storage against those of Google,
Amazon and Salesforce.com, concluding
he could greatly reduce his companys
per unit costs by creating an internal
cloud.
7

Clearly, executives should not take
the promises and projections of cloud
savings at face value. The articles about
companies that have saved money
rarely explain how these savings were
calculated, and several apparently
rigorous analyses of cloud savings have
been attacked as unrealistic.
8
In our
experience, even where US-based firms
move their internal applications to the
cloud, they usually decide to retain a
number of services in-house, because
the costs of hosting a server internally
whether in an optimized data center
located in the US or in a captive facility
offshoreare lower than that of an
external cloud service.
Executives therefore need to look
closely into the costs of cloud
computing for their organizations. They
should seek rigorous ROI case studies
based on actual cloud usage, rather
than estimates of anticipated savings.
Hardware, after all, is a relatively
small component of data center costs.
They need to uncover the hidden
management, transition, and usage
costs that reveal themselves only when
organizations start to work with the
technology. They need to evaluate the
pricing models of different kinds of
cloud services, as well as the potential
costs of moving services back into the
company or into another cloud. And
they need to work with the finance
department to develop a consistent and
acceptable approach to measuring the
costs and return from clouds. Only then
can they reliably estimate the savings.
This approach should apply in any
industry. In addition, for Airline,
Freight & Travel Services businesses,
the following factors will be critical
to realizing the greatest possible
cost benefits from adopting cloud
technologies:
Adopting common standards that
make sharing of knowledge and
services easier
Using standard, fit for purpose, and
clearly-defined service levels as much
as possible, geared to requirements of
the specific service
Applying standard security and data
privacy restrictions appropriately,
taking into account the fact that most
services offered by cloud providers
today are managed and provisioned on
a cross-border rather than in-country
basis
Overcoming any departmental
ownership issues so as much work
can be moved to the shared cloud as
possible
Taking care to maintain flexibility
around procurement and not get too
tied into specific suppliers.
4. Can I depend on clouds to save my
organization money?
EasyJet flies into the clouds
with Azure
9

In July 2009, budget airline
EasyJet became one of the early
adopters of Microsofts Azure cloud
computing platform. Azure offers a
solution to a question EasyJet had
been asking, said EasyJet enterprise
architect Bert Craven - How do
we make our on-premises services
available publicly but securely, and
in a rich and flexible way?. In
later iterations of EasyJets new
departure control system (DCS)
Halo, Craven said that the airline
might consider moving more of its
back-end data into an SQL Azure
cloud database.
At the moment, were still keeping
a very centralized DCS and just
exposing that publicly. (Does this
make sense ?) Once were happy
that the overall process in the
airport works, well look at that,
said Craven. If you look at our
network of airports they are all
over Europe with the information
stored in UK databases. It would
make much more sense for that
data to reside in the cloud, and be
modified in the cloud.
12
Companies that have built massive
clouds are already transforming the
nature of competition across various
industries. Googles advertising-
supported search engine, workplace,
collaboration and internet application
tools, and Amazons online retail
operations are all made possible by
the vast computing clouds created
by those companies. And cloud-
based consumer applications such
as Facebook and cloud-enabled
iPhone apps are driving innovation in
unpredictable ways.
In the future, we expect cloud to
enable Airline, Freight & Travel
Services companies to approach and
operate many parts of their business
in a radically different way. The areas
where cloud computing is likely to
have the greatest impact on industry
operating models include:
Dynamic, personalized packaging
will become more viable. By helping to
integrate, automate and support the
individual steps, cloud will empower
companies to manage the dynamic
aggregation of individual components
in line with individual customer
requirements.
Service management and
collaboration across multiple partners
in the Airline, Freight & Travel Services
value chain will become more efficient,
collaborative and flexible, further
helping companies to meet customers
growing demand for customized and
personalized offerings.
The need to develop and deliver
service innovation will be supported
and accelerated by cloud, enabling
Airline, Freight & Travel Services
companies to offer comprehensive,
customized solutions supported by
effective, efficient, and continuous
processes.
More effective and responsive
interactions direct with customers will
be enabled and supported by clouds
combination of unrivalled distributed
processing power, strong connectivity
and effectively unlimited analytics
potential.
Boosting the value contribution from
IT has been a long-standing challenge
for Airline, Freight & Travel Services
companies. Cloud will help them
realize higher value than ever before
from IT, by optimizing IT investments,
reducing costs, and increasing process
efficiency. Applications will be
developed quickly and flexibly using
pre-approved, cloud-based platforms
and development toolkits, with
hardware, security and other services
built in as standard.
5. How will clouds affect the way my
organization operates in the future?
IBS makes a mark in Russia
10

S7 Cargo acting on behalf of
S7 Airlines and GLOBUS airline,
based in Russia, has signed up
for iCargo, IBS new-generation
cargo management solution. S7
Cargo has chosen iCargoNet, the
SaaS offering of iCargo that will
be hosted from IBS state-of-the-
art data canters. The IBS solution
was selected by S7 Cargo for
its strong customer service and
proven ability to help cargo carriers
in significantly increasing both
operational and cost efficiencies.
iCargoNet, the hosted version
of iCargo lowers the total cost
of ownership and facilitates
transaction-based pricing, whilst
bringing new benefits such as ease
of global distribution and ability
to add new modules and system
features as the business needs of
airlines grow and change.
IBS officials said iCargo, developed
by the company in association
with six leading global airlines, had
within a few years grown to be
a leading air cargo management
solution, with 19 customers
including All Nippon Airways,
Austrian Airlines, Qantas and Tokyo
International Air Cargo Terminal
using the solution.
We decided to make social media
an important component of our
overall KLM customer service
strategy after handling stranded
customers via Facebook during
the volcanic ash cloud that struck
Europe in May, 2010. Leveraging
the Service Cloud 3 is going to
enable us to recognize patterns,
handle cases via social media
throughout different teams, and
discover commercial opportunities.
We believe this will allow us to pro-
actively build a strong and loyal
relationship with our customers
and fans and enhance our service
to them, said Martijn van der Zee,
vice president, E-Commerce of
KLM Royal Dutch Airlines.
13
Various surveys tell us that security and
data privacy remain prime concerns for
cloud implementers in all industries.
CIOs are concerned that their data
could be stolen or compromised by
hackers, mixed with data from their
cloud providers other customers, or
released by mistake.
That said, many companies already face
specific challenges in security and data
privacy, compounded by a fragmented
landscape of different approaches and
policies across different departments.
This in turn carries a lot of risk and
cost. In such cases, the move to cloud
computing may provide opportunities to
drive more consistency and automation
in data security and privacy while also
reducing costs, through an approach
that reflects each data items inherent
sensitivity.
For example data with a low level of
sensitivity may well be suitable to
go onto a public cloud infrastructure
service with simple password access,
whereas ultra secure data may require
dedicated secure servers housed in
ultra secure data centers with strong
authentication for access. There may
be several different levels of security in
between.
As companies choose cloud service
providers, they should include security
and data privacy capabilities as a
major part of the selection criteria.
The key to understanding security in
cloud computing is to realize that the
technology is not a break with the past.
Instead it represents the logical next
step in the outsourcing of commodity
services to many of the same trusted IT
providers that have been leaders in the
field for years.
We recommend that companies take
the following into account:
Work with your provider to
determine its attention to security,
privacy, and compliance with data
laws in all relevant jurisdictions. Make
sure the provider can achieve parity or
better levels of security, privacy, and
compliance with law than you have
today.
Remember that the security of the
cloud should be equal to the most risky
client that is serviced by the provider.
Rigorous risk assessment is a
complex undertaking that represents
the key to effective security in the
cloud. Require your cloud computing
partner to provide you with its risk
assessment and how it intends to
mitigate any issues found.
If the cloud provider does not have
a seasoned Privacy Officer and a
client-facing CSO, CISO, or equivalent
security role, be very careful. It is a
sign that the provider doesnt take
security seriously enough.
Schedule mandatory monthly
discussions with the cloud providers
top privacy and security people. This
discussion should flow both ways with
no hidden items.
The cloud provider should have
the ability to map its policy and
procedures to any security mandate
or security/privacy/compliance driven
contractual obligation you face.
Pay attention to your cloud
providers adherence to secure coding
practices.
FCm Travel Solutions uses
salesforce.coms cloud CRM
as its platform for delivering
highly personal service to
business travel customers
11

FCm Travel Solutions has a
Salesforce CRM implementation
for 680 users within the Sales,
Operations and Marketing
departments across ten key global
territories. It has integrated the
CRM with its existing booking
systems to allow clients to be
matched against transactions for
keeping the database true. It has
also customised its implementation
with a total of nine business
applications and objects to date,
creating an industry specific
solution that best serves its
business requirements this
includes Ideas, salesforce.coms tool
for capturing innovative ideas from
employees.
6. What about assurance of security and data
privacy?
14
Airline, Freight and Travel Services
companies need to consider how to
take account of and plan for cloud
computing services at each of the levels
we have highlighted:
Infrastructure
CPU, memory, and disk capacity
available on demand, real time, and
usage based will be a big driver of
benefit
Platforms
The technology architecture for the
Airline, Freight and Travel Services IT
organization can be evolved to take
greater advantage of cloud-related
services. This is an important step
to taking advantage of emerging
capabilities and services available in the
cloud
Applications
Commercial cloud-based Airline, Freight
and Travel Services applications that
provide industrial-strength functionality
are emerging and growing rapidly.
Services
Cloud services including new business
processes such as analytical services are
rapidly becoming available for Airline,
Freight and Travel Services businesses
to leverage. The ability to achieve a
step-change in capability through these
cloud services offerings enhances the
competitiveness of Airline, Freight and
Travel Services companies and enables
more timely innovation.
As we pointed out at the start of
this paper, cloud computing is too
important a technology to leave
entirely to technologists. While the
work of migrating from conventional
to cloud computing is likely to fall on
the shoulders of the CIO, other senior
executives have important roles to play.
To make sure an organization maximizes
benefits and minimizes risks, executives
must:
Ask hard questions and demand data-
based analyses regarding cost savings.
Dont assume automatic and substantive
cost savings. Do an ROI analysis.
Consider conversion and ongoing costs
as well as savings. Dont be intimidated
by the jargon. Experiment or pilot on
low-hanging fruit such as workgroup
applications, or on a non-mission
critical, non-integrated application.
Then be ready to scale once youve
proven the benefits are worth it.
Establish a clear governance
structure for cloud computing. Many
organizations have rules and structures
in place that govern how IT decisions
are shared between departmental
leaders and IT executives. Use them
(and if they dont exist, create them)
to decide who inside and outside the
IT organization should be engaged in
decisions on cloud computing, and
what decision-making rights and
responsibilities they have.
Keep cloud efforts on track: Make sure
cloud computing receives the focused
thinking, planning and follow-up it
requires. Use the answers to these six
questions to identify and address both
immediate and longer-term business
needs and opportunities, develop a plan
for using public and perhaps private
clouds, and gain the capabilities the
plan requires. Make sure the people in
the organization understand the impact
cloud is having on the way they work.
Set the standards for success:
Provide the necessary oversight to the
IT organization. Make sure goals and
deliverables are well understood, and
projects are well aligned with business
needs. Clarify how the value from
cloud computing is to be determined:
which quantitative and qualitative
benefits are sought? And consider what
else constitutes success besides value
achieved and projects completed: skills
developed, partnerships established, and
risks addressed.
Provide the necessary support: Besides
financial resources and technical
talent, support other activities that will
underpin the success of cloud initiatives.
For example, organizations may benefit
from a community of practice or a cloud
program office to develop the skills and
share the experiences of people engaged
in cloud projects.
Buy cautiously, appraise frequently:
Its too early to predict who the major
cloud providers will be in a few years,
what capabilities they will deliver, when
they will deliver them, and how well.
So when selecting cloud providers,
carefully consider whether they have
the potential to be a desirable partner
in the future. Even after they are
chosen, evaluate your partners on their
financial stability, as well as their ability
to improve functionality and service
levels, to integrate data across different
technology platforms and cloud services,
and to deliver on their promises.
The Airline, Freight and Travel
Services industrys migration to
cloud: not a question of if, but
when
While it may take time for companies
to transition to cloud computing,
beginning the journey early can deliver
some substantial financial benefits.
Executives are still grappling with
its risks, possibilities, and the cost of
writing off current IT investments.
However, for several companies the
transition to a hybrid cloud environment
is already under way. The capabilities
and potential savings from clouds are
too great to ignore.
In addition, software developers and
venture capitalists will be drawn to this
new market. The low development cost,
short development cycle, and quick
return on cloud services are irresistible.
This means future IT advances and
innovations are much more likely to
be based on clouds than conventional
computing. The critical issue isnt
whether cloud computing will become
a fundamental technology in the next
decade. It is how successfully companies
will profit from the capabilities it offers.
Managing the new cloud capabilities
with all the existing legacy systems in
a way that is seamless to business units
and users will be critical to achieving
the benefits and managing the risks.
However, the fact remains that over
time cloud will reshape the way all
companies do business. In our view,
those that move early to embrace this
future will position themselves to be
tomorrows high performers.
Taking the first steps
15
1
Copyright Airline Business and SITA.
Airline IT Trends Survey 2010. Full
analysis available for purchase at
http://www.flightglobalshop.com.
2
Luiz Andr Barroso and Urs Hlzle,
The Datacenter as a Computer:
An Introduction to the Design of
Warehouse-Scale Machines (Morgan &
Claypool Publishers, 2009).
3
Condon, ibid.
4
Source: http://googleenterprise.
blogspot.com/2010/02/flying-into-
cloud.html
5
Caspio Announces Enterprise
Agreement with U.S. Postal Service,
M2 Presswire, 24 September 2009, via
Factiva, M2 Communications.
6
Pressure Performance: 2009 IT
Report, Accenture CIO Organization,
November 2009.
7
CTO Roundtable: Cloud Computing,
Communications of the ACM,
Volume 52, Number 8 (2009), Pages
50-56 http://queue.acm.org; Gray
Hall, Bechtel Harnesses the Cloud:
Case Study of an Enterprise Cloud,
Cloudstoragestrategy.com.
8
Cloud Coockoo Land Computing,
dotfuturemanifesto.blogspot.com;
Andy Greenberg, Deflating the Cloud,
Forbes.com, April 15, 2009
9
Source: Computing, 15 July 2009
http://www.computing.co.uk/ctg/
news/1844351/easyjet-flies-clouds-
azure
10
IBS forays into Russian market, The
Economic Times, 20 August 2009, via
Factiva, The Times of India Group.
11
Source: http://www.salesforce.com/
in/customers/travel-transportation/
fcm_travel.jsp
Reference
About the Authors
Robert Zippel
leads the network enabled solutions
practice of Accenture in Austria,
Switzerland and Germany. As Storage,
Network and Compute Power in the
Cloud stop being separate topics, the
technology base for cloud computing
within Accenture is located in his
group. Robert is also the leading
the global passenger service system
implementation group in Accenture
and is in this capacity supporting
various Airlines in their PSS programs,
moving them into service provider
SaaS clouds. Roberts roots however
are in the data center, responsible
for the ecommerce operations of a
large media group before he joined
Accenture 10 years ago, where he
already built cloud like solutions
based on the much less suitable
infrastructures available at the time.
robert.zippel@accenture.com
Christian Tueffers
is the Cloud Computing lead for
Accenture in Austria, Switzerland and
Germany. He has over 13 years of
experience in IT architecture spanning
several industries incl. airlines. His
focus has been system integration in
large and complex IT environments.
Christian is based in Kronberg
(Frankfurt), Germany.
christian.tueffers@accenture.com
Alan Healey
is the executive responsible for
leading the Cloud Computing Program
for the Products Operating Group
within Accenture. Airline, Freight
and Travel Services is an industry
sector within the OG. Alan has 25
years experience in outsourcing and
managing large programs of work.
He has operated across multiple
industry sectors, managing several of
Accentures most significant long term
contracts, covering also areas such as
transformation change, commercial
management, and service management
as well as technical delivery. He has
held a variety of management roles
within Accenture. He is based in
London.
alan.healey@accenture.com

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com) led the Cloud Computing
research that is referenced in this
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