Pre-pandemic, digitalisation was discussed at length but was seen as optional for many. The pandemic changed people’s mindset, said Ashok Rajan, Senior Vice President and Business Head Cargo and Logistics Solutions at IBS Software, with incremental steps taking the industry in the right direction.
Speaking to Air Logistics International at the IATA World Cargo Symposium in London on Tuesday 27 September, Rajan said that since the pandemic struck, digital transformation has been linked to key business initiatives.
He has noted a herd effect, with players not wanting to be left out, and this has been driving adoption.
Rajan said it has been going in spurts with sectors such as digital distribution channels and warehouse automation growing rapidly for short periods.
He said, “What is missing is a more coherent approach to saying where do you want to get to. We have been talking to customers asking where do you want this enterprise to be and lead up to that. It is a far cry from where we were a few years ago.”
Much of the technology is not new; Rajan’s theory for why adoption was slow is because the industry changes when there is pressure from customers or regulators.
There was little pressure from either, he said, but of late, that has changed, and once something gains momentum, it is hard to stop it.
He said, “Big suppliers and shippers are demanding a lot more, and that is forcing people to change processes that have to be backed by technology. The technology solutions for most of these problems are actually very simple, technology providers can do it for a far lower upfront cost than before. Today, there is pressure coming from the market and that is forcing them to change processes and therefore use technologies.”
IBS has been enhancing its cargo products, helping airlines revamp their core infrastructure so they have the right digital foundations.
During the pandemic, the iCargo platform has had the biggest uplift in customers joining.
Bridging the digital divide has been key; with multiple stakeholders, the weakest link is communication between the players, said Rajan.
IBS has been working on a suite of platforms called iPartner to improve integration between different stakeholders.
The recently-launched iPartner Handler is being used by Lufthansa Cargo with close to 50 stations and 30 ground handlers using the platform.
Rajan said, “The problem that we are trying to solve is that airlines sometimes come up with innovative products which require service delivery around those products, and half of operations are managed by a ground handler. Unless you can make it almost seamless, delivery on those products is not there.”
Artificial intelligence
Introducing Artificial Intelligence (AI) has been another project; working in partnership with Korean Air, IBS has been building an AI revenue management platform.
“We have used their business expertise and brought in our technology expertise to build solutions which are truly today’s solutions,” he said.
In its simplest form, AI is like automation, said Rajan. The challenge comes in areas like revenue management where the system starts to suggest prices and customers wonder if products can be sold at that price point.
AI has moved from being scary to cool, and everybody wants to be seen as having done something with AI, said Rajan.
People have got over fears that AI will take away their jobs because it is around them in their everyday lives, so they have realised that it is a convenience, not a threat.
Rajan said, “A few years ago people did not know what it was; when people said Artificial Intelligence, it sounds like it comes out of a science fiction movie. Now people want to be associated with it; people need to know what they want with it, so I think the threat factor no longer exists.”
Today, digitalisation is in a state of flux, believes Rajan, because everyone wants to go digital and there are spurts of digitalisation.
IBS has been advising customers whether it thinks that they are adopting the right approach.
He said, “You don’t take technology to the problem; we’re almost sometimes looking for a problem that fits the solution rather than going the other way round. There’ll be an evolution in the ways of working because people see digital as IT solutions, which is the wrong thing to look at. There’ll be an evolution in how businesses have to be run and then that will get backed by technology.”
This article was published in the October issue of Air Logistics International, click here to read the digital edition and click here to subscribe.