DIGITAL transformation plans often sound like major projects that involve companies making bold moves in a bid to give their businesses a new phase of life.
But national carrier Singapore Airlines (SIA) has decided that for its multi-million-dollar digitalisation plans to work, it also needs to change the status quo at the micro-level - from the way its staff makes decisions, to the kind of problem statements it approaches external parties with.
In order to boost operational efficiency and customer satisfaction amid a competitive aviation industry, SIA has identified three areas ripe for change, George Wang, senior vice-president of information technology (IT), told The Business Times. SIA's digital innovation blueprint was launched a year ago.
The three areas are: revamping culture; building internal capabilities; and strengthening technical infrastructure.
"We think that culture is one of the key things that will enable our digital transformation to be successful," said Mr Wang. "In that area, we are focusing on training and getting our staff to practise what we call the key components of a digital mindset."
All ground staff at SIA's headquarters are being enrolled in courses covering data analytics, design thinking and agile capabilities - that is, responding quickly to a changing environment and being flexible when approaching a problem. The goal is to ensure that staff make decisions based on data instead of "gut feeling", and are acutely aware of how they impact customer journeys.
In January 2018, the company also began providing funding and support to staff for their ideas, said Mr Wang. Typically, within a week of submitting their idea to the Digital Innovation Lab team, the staff will receive a response about whether the idea has been approved.
If it has, staff will be provided with a S$5,000 seed fund to be used for developing a prototype application, service, or special hardware to bring their ideas to fruition.
To date, the Digital Innovation Lab has received more than 180 ideas from staff, with over 50 ideas developed into prototypes. Out of these 50 ideas, 11 are moving on to the production stage.
"I think this is really powerful because I see that one of the key motivations for people is really the kind of impact they are making on the organisation," said Mr Wang, citing the example of an employee who had the idea of using one particular area of location-based technology to help improve the travel experience.
"And she is not an IT staff. She works in the purchasing department," he added. Staff will also have the chance to work with external research institutions and startups via KrisLab, SIA's digital innovation lab slated to officially launch next week.
Aside from revamping its culture, SIA is taking a hard look at how quickly it meets business demand. When it comes to this, being agile is key, said Mr Wang. This means streamlining processes to ensure greater efficiency.
Typically, projects begin with a broad business requirement that is defined months or even years ago, and results are delivered only at the end. "The problem with this is that you are subjected to a lot of risk because the market changes, and the customer changes ... when we're agile, we use another way to look at the problem and think, let's develop a minimum viable product first, and then do incremental developments. This lowers your risk."
For instance, from the time in which the decision was made to collaborate with Google, SIA took only three days to develop a bot that provides flight information on Google Home. Such a process could have taken weeks or even months in the past because of several layers of approvals and the inflexibility in changing the priorities in a project, said Mr Wang.
As for strengthening its technical infrastructure, the company has invested in moving to the cloud, developing application programming interfaces (APIs), as well as systems for its data.
And in a move that signals the organisation is stepping out of its comfort zone, SIA has begun to engage startups - part of what Mr Wang called "getting the ecosystem right".
He told BT: "What we found we have been lacking is that we work with large companies, our tech partners, quite well. But before last year, we never tapped into the startups community enough." For instance, SIA has partnerships with IBM, the Agency for Science, Technology and Research (A*Star) and the National University of Singapore (NUS).
Asked about the company's strategy in tapping startups, Mr Wang said: "Our approach to startups is very specific. We don't just say, 'Let's have a network session.' Our approach with startups is very much business problem-centric."
And these business challenges can be very specific. For instance, SIA once had a problem statement that asked how one could count the quantity of serviceware used for the in-flight meals without getting the crew to do it manually. "It's operational efficiency right? If you don't know how much cutlery you can still use, then what do you do? You have to overstock. It adds weight, and it's a waste of resources," said Mr Wang.
The group ended up impressed by a startup that used radio frequencies to determine the quantity of serviceware on board.
SIA sources startups from a number of channels - it partnered Silicon Valley-based innovation platform Plug and Play last April to identify and work with startups, and it also runs an annual competition called the
AppChallenge, which involves participants submitting solutions in response to business challenges. Last year's edition saw 406 submissions from 784 teams that came from 73 countries.
The SIA Accelerator Programme is also slated to launch in the first quarter of this year.
Though taking a stake in startups is "not SIA's active strategy" because it aims to be "a customer to these startups", the company invested an undisclosed amount in Australian startup Data Republic last year. The startup provides services for organisations to share data securely and privately.
"We think data will be a key differentiator in the future. Data Republic is solving a very important problem in data collaboration," said Mr Wang.
Earlier this month, SIA found itself in hot water when more than 280 KrisFlyer members had their account details and travel history disclosed to other customers due to a software bug.
Asked how confident SIA is in preventing a similar incident from happening in the future, Mr Wang declined to comment on the specific measures the group implemented to address the issue, but said that it took a holistic approach towards data security and customer information privacy. This approach covers the technology measures, people measures, and the process of handling such a situation.
Reflecting on the lessons learnt from SIA's digitalisation so far, Mr Wang said that digital transformation is a journey, not merely a few initiatives. "It requires a concerted effort across the company for every aspect of business and at all levels of business," he said. "We need to cultivate the digital mindset, spur innovation and encourage collaboration. When all these elements work in harmony, that is true digital transformation."