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Dynamic packaging systems: should you build or buy travel technology?

Should your travel business develop its own dynamic packaging technology or stick to software from a supplier which knows the score? Linda Fox weighs up both options.


DIY technology


When it comes to choosing a dynamic packaging system, most travel businesses start with a long list of questions:



  • Should you build your own system?
  • If not, how can you distinguish between the suppliers out there?
  • How do you know they will deliver?
  • How much should you invest?
  • Can you use it across a number of distribution channels?
  • Will it integrate with existing systems?
  • What about content links?

And the list goes on. So where should you start?


Technology suppliers say the first key steps are looking at your existing business and deciding what you want from the technology and what the strategy is for the future.


The good news is that there are a number of technology suppliers competing in more or less the same space – offering retail systems that bring content together from various sources to enable dynamic packaging.


This means that although travel retailers have the challenge of deciding who to give their business to, they at least have choice and should be able to negotiate a
good deal.


The number of suppliers and systems and the cost involved has led to a trend towards employing independent consultants to shop around for technology.


“Some realise that unless they go with a company that knows travel they will lose market share – it is a long implementation process.”

When dynamic packaging became the buzz term a few years ago, travel companies had few avenues open to them for technology. There was a mistrust and lack of understanding of existing suppliers and what their systems could deliver.


Faced with intense pressure from Internet start-ups, many companies either looked at developing their own systems at great cost and risk or tweaked and bolted on new bits to their existing technology.


These days, not surprisingly, all of the technology suppliers advocate buying an existing system – but mostly for good reason.


GoQuo chief executive Ron Ramanan said: “I would not recommend any company creates its own system. Some people say they want to do it themselves and then realise that unless they go with a technology company that knows travel they will lose market share –  it is a long implementation process.”


He added that only large companies with very specific requirements might want to look at building a system from scratch.


Traveltainment UK sales director Colin McKee has seen companies go down the DIY route only to replace what they have built with a system from an existing supplier.


HyperTech Solutions managing director Tim Wright sees middle ground between buying an off-the-shelf system and developing your own. He believes there is another option, which enables travel companies to take an existing flexible system and customise it to the requirements of the company.


“If you really do want to differentiate yourself you need this third option. It enables you to stand out in the marketplace and the technology is the servant rather than the master.”


Cost remains a key issue in choosing which path to take, say to suppliers, and getting the investment of travel companies – on thin margins – is still challenging.


It is widely believed that buying an off-the-shelf product will work out cheaper than building your own system, but even persuading companies to invest on this basis
is tricky.


Wright said: “The biggest problem is that people do not want to invest. They think they are going to sell-out in two or three years so it’s not worth it. Only the really progressive companies are prepared to spend.”





Developing your own system: pros and cons


Pros



  • You get the system you want to suit your business requirements
  • You can easily make changes to the system according to market conditions
  • You control the system and the budget
  • You might feel there are significant business advantages to be gained in developing your own system

Cons



  • You need a high level of expertise and financial resources
  • There is a long research and development process involved, which existing suppliers have already been through
  • It can work out prohibitively expensive and will need ongoing investment and technical support
  • It is a risk and many things could go wrong

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