How to evaluate a Travel Technology company?

The success of any Travel Service Provider like TMC (Travel Management Company), DMC (Destination Management Company), Travel Agency, Tour Operator, inbound, or outbound travel company depends largely on how successful they are in choosing the right travel technology provider for their business.

There is no secret formula to choose the right travel technology but there are key factors that should be considered in order to choose the right technology partner.  

The travel company should consider the following factors to choose the best fit Travel Technology:

Vision of the Travel Company:

I can understand if you guys start wondering why the vision of the travel company is the first key ingredient in choosing the right travel tech provider. If a Travel Agency doesn’t have the clear Vision what exactly they want to achieve with the technology be it POS (Point of Sales) for their staff, Mid Office Solution, Back Office Solution, B2B or Agency Solution, B2C or OTA (Online Travel Agency) or Website Solution.

If they lack vision and they want to choose technology just because everyone around is investing in travel technology, such travel companies are doomed to fail sooner or later as they lack foresightedness.

Vision could be as simple as helping customers more efficiently, process optimization or reducing the cost of operation or increasing efficiency with the same set of human resources, etc. or could be as exhaustive as achieving the complete Automation of the travel business while increasing the scale of business at the same time.

Travel companies who know what they want to achieve with travel technology and consider it as an investment than a cost will be able to reap the full potential of Travel Technology.

Business Process Evaluation & Documentation.

Any travel company knows how their business works when it’s about travel trade but when they want to invest in the travel technology, they need to evaluate every flow of business starting from customer inquiry to sales to operations to final customer feedback or satisfaction. The major challenge travel companies face or lack of proper skill set is to evaluate the requirements and document the requirements in a logical fashion which make sense for travel technology companies as well in order to under their requirements and business.

Requirement Gathering or Scope Documentation seems to be a very easy subject but travel companies fail to do it properly, the easy way out is they can hire a travel technology consultant who understands travel and technology at the same.

Travel Technology consultant will evaluate the business process and document requirements in a way which will make the life of travel technology companies easier and also Travel companies will exactly know what travel technology will serve their needs.

Invest in Travel Technology Consultant:

As most of the travel companies don’t have an expert who has a good understanding of Travel and Technology both. Travel companies usually have Travel Experts as this is their core business and big travel companies usually have IT team but their expertise is primarily IT not travel.

So in many cases, such people don’t know what the best way to achieve the objective so wither they fail or end up achieving a bad travel technology solution. On the other Travel Technology Consultant will be able to evaluate the business process from a technology point of view and efficiently document the requirements.

As he will be from the travel technology industry will have insight about various technology companies offering the solutions. He can evaluate the solutions during the demo and post demo as well in line with the requirements. He can help travel companies ask all the right questions and submit his expert feedback which will help travel companies choose the right technology and minimize the risk.

Product Evaluation:

Once the Vision is clear and has the scope document ready start evaluating the travel technology vendors. Schedule the demos with the travel technology companies to evaluate the solutions based on the requirement document ask the right questions, schedule multiple demos with the shortlisted companies whose vision and solution align with the travel company.

Once shortlisting is done schedule multiple demos with the travel technology companies, these demos should be more focused now based on the requirements. Travel companies can submit various business scenarios to technology companies and see how their solutions can fulfill their needs.

Travel companies should also keep into consideration that travel technology company’s solution may fulfill 60%-70% of their requirements but they also need to look into how flexible they are customizing the solution which will full their 80%-90% of the requirements.

Reliability:

As this is an important factor to be considered as travel companies core business will now be dependent on technology and it’s a long-term relationship.

There may be many travel technologies companies which are in the market for many years still they are not reliable. There multiple factors that you can consider but most important is the average Life Time Value of the clients or client attrition rate.

What’s the average tenure of a client’s working with the technology company? There may be clients who have left the technology company because they went bankrupt or shut down or various other reasons but not because the technology is bad.  You will also find the companies who have signed up with big travel companies in the past but they are not able to retain these travel companies and the majority of them have left.

It’s a clear sign that the travel technology company is not reliable.

Flexibility:

This will be an important parameter for choosing the travel technology partner, as this relationship will be a long-term partnership and travel company’s business will be dependent on this.

You will come across with travel technology companies who have a good product and may fit your business requirements as well but they are very rigid to deal with maybe because you are not a big travel agency or maybe because they are rejecting their additional requirements with any logical reasoning or also not offering any workaround to solve your problem.

So, you need to prioritize your requirements based on must-have and good to have functionalities and if these travel companies are able to fulfill must-have aspects of your requirements then you should go ahead with such companies only if it also makes a good commercial decision.

If not you should search for a good travel technology company with the required flexibility or maybe search for mid-size travel technology providers with a stable solution and decent feedback.

As they will cost-effective and flexible and also will give your desired attention to solve your problems.

Try to choose the travel technology company that is offering a good mix of ready products and flexibility with a good customer base or they have proven their capabilities.

Do cost/benefit analysis:

This is a must for any travel company to do the cost/benefit analysis of the travel technology company. They may be offering the best of the technology solution but if they fail to offer any value post cost/benefit analysis, never choose such companies.

How to do it:

Try to give monitory value to all the cost incurred for implementing the technology it should not just limit to direct cost like software cost, hosting cost, etc but also the cost of travel technology consultant, cost of any other employee invested in the technology evaluation like Operation Head, Accounts Head, GM, Director, Product heads, etc. The cost of additional training to employees may require hiring additional employees, implementation cost, etc.

Also, try to give monitory value to additional benefits that you will achieve like an increase in annual sales by 50%, Annual Cost reduction by 20%, Human Error Reduction by 10%, increase in customer base by 15%, Customer satisfaction by 20%, etc.

Once you compare cost vs benefits and in your benefits are positive, you should invest in technology.  

Live client evaluation:

This is one of the best ways of evaluating any technology company solution, try to evaluate the live clients of the technology company go on to their OTA/Website solution, perform the multiple searches, try to replicate multiple scenarios that you face on day to day basis.

Try to get the B2B logins from their clients, play around with the B2B system, you will have a better understanding of their solutions how they are preforming in the live environment.

Due Diligence:

Getting feedback about the travel technology company is one of the most single most important factors for signing up with the right technology provider. The feedback should not be limited to a list of travel technology company’s clients but also from various other stakeholders like from your travel technology consultant, suppliers – Hotels, GDS, LCC, Packages, Activities, etc. employees of the travel technology company’s client.

Travel companies should approach the client’s not necessarily the contact provided by technology companies but their own contacts, get the feedback from the market.

Also try to find the negative feedback for the company, as I am pretty sure 100% of customers are not satisfied anywhere.

 Negative feedback helps you evaluate technology companies better; you will be able to find put their shortcoming or which area they are lacking in. This will help you take the educated decision and will help you in negotiation as well 🙂

In the end, the list of factors to evaluate the technology company can be endless you have to identify what’s most important for you and accordingly take the educated decision. Even if you stick with the above mentioned KPI’s you will not make the wrong decision.

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