Greater Agility Could be Worth up to £3.6 Billion in Revenue to the Travel Sector

Organisations that make better use of their people and technology will help
generate as much as £68 billion in revenues by 2005, say UK business
leaders.

According to 250 senior executives interviewed for “An Agile Age” - a
report by Gartner, commissioned by BT - greater business agility will bring
substantial savings and heavily influence the strategies and future spending
priorities of UK public and private sector organisations. Those surveyed
estimated that investments in making themselves more agile would result in a
4.8 per cent increase in workforce productivity-equivalent to an addition of
£20 billion to last year`s GDP or £4.3 billion in added profits.

The study found that 85 per cent of executives within the travel sector
recognise the importance of business agility to their businesses, and 63 per
cent expect to increase spending on agility over the next three years. By
2005, travel organisations expect between four and six per cent of revenues
to come from increased agility - equivalent to £3.6 billion.

By focusing on agile business processes, travel organisations are
looking to optimise processes and improve cost-efficiency -resulting in a
direct impact on profitability. More than three quarters of travel
executives consider IT-enabled, customer-facing operations to be their top
priority for agility initiatives, and 85 per cent see their agility
initiatives as making a significant contribution to customer satisfaction.

With eight out of ten travel organisations recognising that IT will
play a significant role in achieving this, the study highlights that
multi-channel retailing and improving resource management are the primary
goals for the sector. Travel companies predict that the sector`s spending on
agile initiatives will reach £500 million by 2005.

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But, according to 77 per cent of executives, UK travel organisations
want to know how their peers are doing before taking the first step towards
improving their own agility.

While more than 77 per cent of organisations see themselves as more agile
than their closest peer, only under a third regard their own companies as
`very agile`, indicating that there is a lot of room for improvement.

Sara Mayer, UK Campaigns Manager, BT Ignite said: “Agility is simply
about making better use of people and technology to create real benefits to
the organisation, employee, customer, citizen and shareholder. And the great
news for the UK is that travel sector business leaders are recognising that.
Not only are they taking note of the ways in which some leading blue-chips
are working smarter, the fact that organisations can increase productivity
by up to £1,600 per worker simply by rethinking current business processes,
should be an incentive to all.

“However, while technology is a fundamental tool in bringing about
this change, it is the overall organisation-wide thinking required by
business leaders that will really make the difference. Being agile is a
strategic, organisational, operational, cultural and technology
undertaking.”

Chris Boyd, director, Gartner Consulting, said: “Within the travel
sector, the success of low cost airlines and web-based booking services are
placing demands on companies to find ways to be fast and flexible in meeting
customer, supplier, organisational and macro-economic challenges. In
Gartner`s view, perhaps the single most important challenge for the travel
CIO over the next two years will be to identify the agenda for agility and
to create preparedness within their organisation to face threats and exploit
the opportunities that this period of technology-driven turbulence brings.”

Other key findings include:

* Fifty-four per cent of senior executives within UK travel
companies regard increasing their agility as a cross organisational change
initiative, with 92 per cent seeing their ability to respond swiftly to
changing market circumstances as important to their future success

* Creating customer satisfaction was cited by almost 84 per
cent of travel executives as the leading rationale for becoming more agile

* Sixty-two per cent of travel executives expect improving
agility to contribute to cost efficiency.  Nearly 69 per cent believe
greater agility will help them to overcome cultural and organisational
challenges, while 31 per cent expect agility to help them to manage their
external relationships and processes.

* The travel executives surveyed estimated they spent 27 per
cent of their IT budget on initiatives to improve their agility last year -
amounting to more than £362 million. By comparison, UK organisations as a
whole spent more than £5 billion on software licences and £11.5 billion on
networking technologies.

* Thirty-nine per cent of UK travel organisations consider
themselves to be very agile, citing the greatest priority areas for
improvements as operations, customer service and support and IT.

* Of the nine markets surveyed, the financial services sector
has so far invested most heavily in technology to enhance agility, followed
by government and utilities. The travel industry is the sixth greatest
spender, having invested £362 million in 2001.

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