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Citilink: Taking off in its digital transformation journey

Citilink: Taking off in its digital transformation journey

By on April 27, 2017

Filed under Hospitality & Travel

Citilink: Taking off in its digital transformation journey

The airline industry globally is facing up to the threat and opportunity of disruption. According to PwC’s Global CEO Survey[1], airline CEOs’ assessment of the level of disruption is higher than those of CEOs from other sectors across five forces of disruption – competition, technology, customer behavior, regulation and distribution channels.

Achmad Royhan, Vice President of Information Technology at Citilink, Indonesia’s fastest growing low-cost airline, is confident his team can use this disruption to their advantage.

“In less than four years of Citilink’s inception, we’ve come a long way. We now operate a fleet of 37 Airbus 320s and five Boeing 737s, fly to 29 cities in Indonesia and have more than 8 million passengers every year. Market potential is huge and with more than 230 airports to cover in Indonesia, we’re only just starting,” shared Royhan.

New customer insights lead to new revenue streams

In Asia Pacific, excluding China and India, Indonesia is predicted to grow into the largest domestic market, growing at 6.4 per cent and adding an extra 136 million passengers a year[2].

In an industry where competition is rife and profit margins slim, the need to optimize operations in order to create new revenue streams is more important than ever. Citilink needed a more effective way to plan and optimize its existing and new flight routes to engage more customers across Indonesia. To Royhan, learning what this huge customer base needs and wants is crucial to maintaining customer loyalty and acquiring new ones.

Royhan explains: “Domestic customers book travel – on our website, third party websites or with travel agencies. If we could spot the trends and spikes in customer demand well in advance, we are able to pre-emptively adjust flight routes and schedules, thus maximizing our use of resources and increasing revenue.”

Here’s a likely scenario – the marketing team imports data from online booking websites and observes that there is an increasing demand for flights from Jakarta to Yogyakarta. They then share this insight in real time with the network planning team, which is then used to make adjustments to current planned flights, accommodating increased demand.

New customer insights lead to new revenue streams

Embracing Disruption Through Digital Transformation

Royhan noticed a workplace that was lacking in a data culture in order for Citilink to fully embrace digital disruption.

“Initially, we relied on Excel spreadsheets to compile and deliver data to stakeholders. This method was unwieldy and slow. Insights obtained were often delivered too late to be acted upon,” he said.

Royhan decided that in order to fully empower its staff to drive transformation, they needed to equip a broad spectrum of employees with the right, easy-to-use tools to develop analytical skills amongst Citilink’s work force.

Power BI, a suite of business analytics tools, was incorporated to import data quickly from a range of sources and enable staff to generate insightful reports.

“The time between ingesting data and obtaining insights has shortened significantly, and now customer insights can be shared within minutes across teams,” he added.

Adopting a data intensive approach meant that Citilink needed the IT infrastructure to scale with growing data storage and computing needs. Royhan pioneered the movement of Citilink’s day-to-day operations and management data to Microsoft Azure. “This meant our internal IT team could focus on assisting management with rolling out new data tools and training staff.”

Getting all levels of staff on board

Royhan’s vision for the company was a hit with many, especially the senior decision makers, who were keen to see data translated into actionable insights and new revenue streams.

He had full support from Citilink’s CEO, Albert Burhan, who saw true long term benefits of Royhan’s strategy. “We attach a high value to the role that technology can play in our relationship with customers. Royhan’s vision of turning the disruption of the changing customer landscape to our advantage by using technology struck a chord with the management team and is aligned to our values,” said Burhan.

Citilink’s transformation journey was not without its challenges. In fact, Royhan experienced much resistance from the ground staff.

“To their credit, our day to day staff are already inundated with running the operations in the various cities we are present. My team and I had to prioritize convincing them of the benefits of our data driven strategy. It was not just about serving our customers better but also enabling our staff to do their job faster and more efficiently,” shared Royhan.

Royhan focused on three key areas to get everyone on board with this journey:

Offering management support

Royhan and his leadership team ensured they were at the forefront, setting an example for the rest of the company to follow. All of Citilink’s senior management team and department heads are trained in using Power BI to analyze data and predict business outcomes.

“The vision we have for the company cannot be shared with just the management team. The entire company needs to be aware of it and confident that their managers are consistent, supportive and completely behind the vision,” Royhan surmised.

Conducting show-and-tells

Visual reports and dashboards were developed using Power BI to show station managers the improved business insights they could obtain.

“When we showed our station managers how easy it was to use the dashboard to discover what the market’s largest payment channels were and who their best travel agents were, they became very open to using the tool,” said Royhan.

The right infrastructure

Royhan has parked nearly a fifth of Citilink’s IT budget for data, and expects this figure will only continue to grow over time. His decision stems from the reality that a data centric strategy requires the right infrastructure in place for employees to make optimum use of analytical tools.

“Our staff are dealing with more and more data by the day. What would frustrate them the most is slow data processing that could sometimes take days with less modern infrastructure. To avoid this situation, we need our infrastructure to scale with huge amounts of data and this definitely fuelled decision to our move to the cloud,” explains Royhan.

The right infrastructure

Citilink’s digital transformation journey has honed an organization that stresses the use of modern technology, training of staff across the board and aligning the management team to project a unified vision – all in the name of staying relevant to its customers.

Royhan acknowledges that the airline industry will continue to be disrupted by external forces and is planning ahead to make greater use of data. With a predicted 270 million passengers in Indonesia by 2034, we wonder what new things Royhan and his team will discover about them.

 

[1] PwC’s Global CEO Survey includes the findings from 1,322 surveys of business leaders across 77 countries. http://www.pwc.com/us/en/industrial-products/publications/assets/pwc_2015_global_airline_ceo_survey.pdf

[2] New IATA Passenger Forecast Reveals Fast-Growing Markets of the Future: http://www.iata.org/pressroom/pr/Pages/2014-10-16-01.aspx

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