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Periodic Publication on Transformative Technologies at Airports
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Digital Transformation in Airports

ACRP Periodic Report on Transformative Technologies at Airports
- September 7, 2022

Summary

At its core, “digital transformation” is the ongoing journey of organizations to increasingly move away from paper and manual processes and steps (i.e., analog operations) to fully digital processing and execution in all aspects of business. Digital transformation is an umbrella term that implies a considerable information technology (IT) program. And “transformation” alludes to the potential for enormous impacts on an entire organization in the following areas:

  • Revenue/cost models
  • Technical/infrastructure readiness
  • Changes to process/skill sets

Digital transformation is here, and it was further thrust upon many by the COVID-19 pandemic. Airport operators should shift their conception of IT from individual system implementations to program components of a larger organizational transformation. Those operators that have not yet done so need to immediately engage in a strategically planned effort; the imperative to do so is only growing.

Background

Digital transformation is important because it can enable any organization to make significant leaps forward in strategic and performance goals across all areas of the organization. The size of these leaps depends on the scope of the program, commitment to transformation, and the extent to which the business is natively operating digitally—that is, as much as possible a given process is already digital from beginning to end. The fewer analog and manual processes that exist in all aspects of the business, the more digital the organization. All industries are currently planning for and investing heavily in significant digital transformation projects and initiatives; the rate of digital transformation adoption will only continue accelerating. One recent accelerator was the COVID-19 pandemic, during which many organizations had to immediately transition to a remote workforce. This article studies the general application of digital transformation to small, medium, and large airports.

Assessed Business Needs

Technological innovations in our individual lives, the always present need for commercial enterprises to increase profits, and the need for all organizations to reduce expenses combine to drive these same innovation expectations and needs to all areas of the industry, including airports. Airports experience this pressure in the ever-increasing expectations of their customers and in the increasing speed and changing needs and strategies of their business and that of their partners. Figure 1 illustrates the increasing digitization of the airport business environment and, subsequently, the increasing requirement of airports to seriously engage in this transformation.

Figure 1: The Airport Digital Environment

There are no real alternatives to engaging in this transformation; while an organization may choose to delay a more extensive transformation, there is no real “opt out” option due to changes in the needs of an airport’s digital environment and the need to compete in the marketplace. If this need does not yet resonate with every airport, it will eventually.

Transformational Opportunities and Initiatives

Big changes can often present big opportunities, many of which can be quickly realized. For an airport’s business, the success of digital transformation lies in the following:

  1. Meeting and surpassing customer needs and expectations (of travelers and tenants)
  2. Supporting and enabling its tenants’ needed level of business and operational agility to achieve their individual business strategic goals
  3. Maximizing the use of new and evolving opportunities impacting areas such as performance, customer value, revenue, services, and delivery options

Figure 1 illustrates just how extensive the scope of this transformation is for an airport; it encompasses all customers of the airport, internal areas of the business, and all business partnerships.

Potential airport digital transformation technology initiatives include the following:

  1. Data strategy, including consideration of the Airports Council International (ACI) World Semantic Model
  2. Network, server, and data architecture updates and upgrades
  3. Customer experience (e.g., common-use passenger processing system, self-service bag drop, chat bots)
  4. Implementation and integration of core business systems, such as common-use passenger processing, enterprise resource planning, maintenance and asset management system, GIS (geographic information system), and building management
  5. Digital twin
  6. Biometrics

Transformational Technology and Benefits

Analog/manual processes can result in silos as well as delayed distribution of, and access to, information; digitization can simply remove these barriers. A highly digitized organization can then be integrated with other organizations’ business functions to provide timely, accurate, and accessible information. For an airport, digitization can enable integration with business data provided by other airports, airlines, and tenants, as well as that of the local community in efforts such as “smart city” initiatives. Digitization facilitates the following increased capabilities of every aspect of an organization:

  1. Increased agility and responsiveness
  2. Increased efficiency and effectiveness
  3. Increased insight and awareness of trends
  4. Increased customer insight and customer experience
  5. Improved decision making (real time and predictive)
  6. Reduction of unintended and unanticipated negative events

Transformational Impacts

Transformation of this nature impacts all aspects of a business. Depending on the program and size of the airport, it may require that much of the business transform together, a considerable undertaking for many airport organizations. The following list provides a snapshot of these impacts by category.

Management/Operations

  • Shift to a digital business environment: increased operational pace, increased risk-taking, distributed decision making, operational agility, and flexibility.
  • Requires innovation and data management skills, positions, and teams as well as more cross-functional teams.
  • Requires mature, strategic, and digital leadership across the organization and downward.

Technical/Infrastructure Readiness

  • Core network and server hardware and software should be evaluated for upgrading to support increased device quantities, processing speeds, and data throughput.
  • Enterprise software should be evaluated for upgrading.
  • Data architecture should be evaluated for upgrading, design, and development.
  • Incorporation of Internet of things input devices.
  • Continue to enhance cybersecurity tools, policies, and procedures.

Process/Skill Set Changes

  • Business and operational processes should be evaluated for digitization opportunities and increased efficiencies, such as increasing the use of artificial intelligence analysis and processing.
  • Employees need to be able to perform the new/updated processes in the new/upgraded software and systems.

Passenger Experience/Passenger Process

  • Customer processes should be evaluated for digitization opportunities, increased efficiencies, new revenue opportunities, and improved customer experiences.
  • Business Stakeholders and Customers need to be able to perform the new/updated processes in the new/upgraded software and systems.

Security/Safety

  • Enhancement of cybersecurity tools, policies, and procedures will continue to increase in importance and complexity.

Airport Design/Construction

  • Building and equipment data are automatically extracted from construction drawings and specifications into the appropriate databases for immediate usage by enterprise operational systems (e.g., building management, asset management, maintenance management).

Revenue/Business Model

  • Digitization can separate a process/transaction and its data from the constraints of a physical location, which can often generate opportunities for new revenue and business models.

Legal/Risk

  • The most significant risk is airports not being aware of the unique impacts to their individual business and appropriately engaging in a timely manner.

According to the ACI World Airport Digital Transformation Survey completed in 2020, 6 in 10 airports have a dedicated innovation team to build and deploy digital solutions, and 55% of airports “actively engage all functional teams in innovation and digital strategies.” However, only 22% of airports offer training and education on their digital transformation process.[1]

Lessons Learned

Digital transformation can be a very challenging effort; the following highlights are key lessons learned for airport operators to consider.

  • Not engaging in, or waiting too long to engage in, digital transformation is a major risk.
  • Success requires highly involved executive-level leadership.
  • Most failures are the result of a program undervaluing the organizational effort required to address the people, processes, and culture elements.
  • Break down information silos inside the airport business and with business partners, and develop key performance indicators that focus on behavior.[2]
  • Focus on developing technologies and innovations that improve customer experience and passenger flow and lead to more efficient airport operations.[3]
  • Develop an organizational digital transformation strategy that goes beyond IT systems.
  • Strengthen the IT and data architecture and develop a strong data strategy.
  • Start with small, quick-win projects to generate excitement and momentum as well as build up cross-functional team skills in risk-taking and decision making.

 

References

[1] World Airport Digital Transformation Survey, Airports Council International, 2020, https://store.aci.aero/form/world-airport-digital-transformation-survey/.

[2] Culture Is a Key Element Within an Airport’s Digital Transformation, International Airport Review, Rahmani, Arash, Updated May 2020, https://www.internationalairportreview.com/article/112235/digital-transformation-cultural-change-airports/.

[3] A Strong Technology Foundation Has the Potential to Transform Air Travel, International Airport Review, Nolan, Tara, Winnipeg Airports Authority, Interview with Trevor Strome, February 17, 2020, https://www.internationalairportreview.com/article/111715/airport-technology.

This series of articles highlights the innovation approaches taken by various airports across the United States. These articles are based on interviews with innovation leaders at each airport.