Travel, transport and hospitality companies have been thoroughly challenged by new digital business models. The PwC study “The Leadership Edge” shows that this sector has been successfully transforming its customer-related processes, but companies can still do more to capture all the benefits of Front Office Transformation.
PwC’s study “The Leadership Edge” gives an in-depth view on how to perform a successful Front Office Transformation (FOT) to identify, engage, serve and retain customers. We have surveyed more than 700 senior leaders and front office transformation experts, across eight countries and nine industries, as we wanted to find out what exactly determines FOT success or failure. All the companies we interviewed have remodelled their front office within the last five years – and the travel, transport and hospitality (TTH) sector has been among the most successful transformers.
Daily disruption – no problem
TTH companies eat digital disruption for breakfast and new business models for lunch, as customers expect to be served anytime, anywhere. From a transformed hotel experience to last mile delivery in logistics, clients want complete transparency, instant solutions and tailor-made customer experiences; they are demanding and fickle, immediately sharing unsatisfactory interactions on social media. Nothing has been left untouched in this sector in recent years, as new, innovative “interlopers” have shaken up the whole industry. Traditional incumbents face enormous challenges, exacerbated by the fact that new entrants are unburdened by outdated systems and an obsolete culture.
This sector already has a good track record in Front Office Transformation: more than half (53 percent) of the TTH businesses surveyed describe their most recent FOT programme as ‘successful’ and 47 percent of companies say the initiative was ‘somewhat successful’. Although none of the businesses surveyed referred to their FOT project as unsuccessful, there always remains room for improvement. Our findings reveal four key areas of focus that can help TTH businesses maximise their investment in FOT projects.
No, Front Office Transformation is not a side project
Cultural change is key to successful customer transformation, yet it is a task that is difficult to achieve in practice. 98 percent of TTH firms state that FOT proved to be a major cultural challenge for their employees, and just 8 percent say that their employees were very keen to take part in it. Building a people-centric culture and getting employees on board is paramount.
However, changing culture within a company depends heavily on impetus from and involvement of the top management. Senior leadership must drive, enable and communicate cultural change. Only a scant 2 percent of TTH companies say they were ‘very clear’ about the culture they were trying to build through FOT; a staggering 99 percent concede that their employees saw the initiative as a side project. And just 22 percent noted that their top managers were actively involved in the Front Office Transformation programme. This should make TTH companies re-examine their approach, considering that 68 percent of companies whose senior leadership team was actively involved in their FOT said the project was successful – in contrast to 45 percent of those without active support from the top.
In addition to empowering and enticing their employees with more creative tools for onboard transformation projects, such as experience-based learning or gamification, TTH firms should keep a watchful eye on their Front Office Transformation budgets. Not only can obtaining funding for FOT projects be challenging (one third of businesses surveyed described the budget approval process as ‘difficult’ and 45 percent said that funding for FOT was not viewed as a priority) but any funds that are afforded are often insufficient (47 percent said that the allotted resources were not adequate for their needs).
Despite a suboptimal financial situation, this sector has achieved a lot. If FOT budgets were increased, the results could be even better. In TTH, transformation success is within reach.
Transformation success, without reservations
For TTH businesses, the route to greater transformational gains lies in persuading senior executives to become more actively engaged in the change process through proactive leadership and consistent staff engagement. Using a variety of creative strategies, combined with better budgeting, the sector could significantly increase its FOT success – and profit from the ensuing competitive advantage.
