Eastman Group



Now it’s just getting to be a masquerade … this “image” of getting an Off-the-Wall Comment(s) released by the end of the month. Maybe I should just go back to the random releases of the past. My concern though would be that “random” might become non-existent.

Here it is the 5th of March already and I’m just now getting around to February’s release. It’s late, so it will go out more “un-edited” than usual. I am in Honolulu this weekend … lounging on the 7th floor balcony of the Waikiki Sheraton watching the surfers surf, the kayakers kayak, and the swimmers swim … drinking my lilikoi (passion fruit) punch . It is, however, the first day of sun we’ve seen in a week.

Eastman's "Off-the-Wall Comment(s)"©  …

Well, Sabre’s acquisition of TRAMS did stir up a bit of emotion. The two queries noted above were selected from more 11 … most reflecting significant emotion.

And I suspect that this is “on the record” … not “off the record” as Michelle suggested. What follows is a composite of my reaction to different questions that were posed to me.

As Bill Roebuck suggests above, Lee Rosen has been very successful in evolving TRAMS over the years. But I must go on record as one who has not experienced the success of others in working with Lee. In some ways that’s good … it eliminates a lot of emotion in my assessment of this transaction. In some ways, however, it may also influence my view of this acquisition. It is up to you, the reader, to sort that out.

TRAMS was designed to serve the smaller travel agency. By keeping its technology simple and well supported, TRAMS effectively out “low-costed” more complex or sophisticated solutions as small agency operators cut back on costs. TRAMS is a classic example of the “low cost” survivor in an eroding market – and as such, created enough “critical mass” to be an attractive low-end solution to Sabre.

To the extent that Sabre assumes control and management of the TRAMS solution, TRAMS will become an improved product. That is not to take anything away from the current TRAMS. Rather, it is to say that Sabre has added resources and proven solutions that it can incorporate into the TRAMS product that will upgrade and enhance its value for TRAMS users.

To the extent that TRAMS users are not Sabre based, TRAMS will evolve more slowly … but still improve.

The harder barrier to cross will be the cultural barrier! Established TRAMS users working in non-Sabre systems will be confronted with an entirely new Sabre culture, attitudes, and “self-serving” focus. And Sabre sales people can be unrelenting and unforgiving when they find themselves in a dominant position. Sabre sales people can be unrelenting and unforgiving as underdogs as well; but there is an attitudinal difference when Sabre sales people are “holding all the cards.” As a GDS, Sabre is institutionalized in its “Sabre way” -- but on balance, Sabre is a sound and well run business.

For non-Sabre agencies, adapting to the “Sabre way” (however soft it is in the beginning) will be an emotionally difficult challenge and it will create great angst.  Many agents and agencies will simply not survive the transition … no matter how hard the TRAMS staff attempts to mediate or soften the message.

Equally emotional will be the perception of the increased costs for the use of TRAMS as Sabre “restructures” the cost base to fit its business model.  In reality, the costs would increase in any case … but Sabre will be blamed for these cost increases in lieu of the increases being recognized as a necessity to provide a completive accounting solution. Had TRAMS remained independent, agents would have been confronted with a rapidly increasing cost base … because of the diminishing curve of small agencies having to respond to the rapidly expanding curve of Internet-driven agency alternatives.

 

In the “real world” … neither Apollo nor Galileo exist anymore; they have been inculcated into Cendant.  Cendant’s focus is on evolving its franchise model; not on providing smaller Apollo/Galileo agencies with competitive front-line tools. To my knowledge, Apollo/Galileo no longer offers a low cost back office solution. Since Cendant is focused on its Internet franchise distribution model, it is unlikely that Cendant will evolve any tool that is not linked to their franchise effort (i.e. an independent alternative to TRAMS).

Worldspan has virtually abandoned the small agency outlets in favor of its Internet focused gateway solution. Amadeus has transformed its “back office” into online business management solutions; or secondary providers like .

In the “evolving world” … technology for the smaller agency appears headed toward the self-service Internet sourced business solutions; away from each agency hosting their own resource.  Unlike the GDS hosted platforms, these solutions will be private user-owned tools hosted on major platforms (not unlike Microsoft Office Live >). 

But these solutions don’t exist yet. But the small retail agency is headed in that direction very rapidly.  If I were a betting man, I suspect that is where Sabre is headed with its TRAMS acquisition – to an expanded hosted platform using its new open systems architectures. It’s sort of a toss-up between whether the Sabre travel industry brand can outweigh a software brand like Microsoft Office Live among small travel agents. That may be a factor of how quickly small agencies owners come to recognize that the travel industry is transitioning to conventional business processes; that it is no longer dependent on the traditional GDS for distribution or ATC/BSP for settlement.

Not unlike or , technology solutions must become intertwined with business solutions; they can not be kept separate as they are today.  This puts many agency owners between a rock-and-a-hard-place. They can’t survive with out Sabre/TRAMS and they don’t think they can survive with Sabre/TRAMS.

The common threat that ran through most TRAMS agency users that wrote to me was the fear that their core business information would be compromised; that Sabre would use this information to pirate their customers to the Sabre-direct alternatives; and as noted above, costs would begin immediately to escalate.

One of the major reasons that agencies feel threatened is that technology is not well understood by small agency owners; it’s always been “provided” (by Apollo, Sabre, TRAMS, etc.) in the past.  In these agency owner’s minds, technology remains now, as it was has been in the past, nothing more than a data processing tool.

But because of the commoditization of virtually all travel products, this is no longer true. I address the commoditization of travel in the next snippet of this OTWC. But the result of commoditization of travel products means that technology must be used to integrate the component parts of a travel nee in the context of the demand for the product. The only way to do this is digitally and in real-time. The old-rule of going to content providers for pre-packaged or possible availability is rapidly becoming outmoded.

In the back office scenario, commoditization of travel product has virtually eliminated the margins to fund manual or human-intervention driven data management. More importantly, there is no longer any real need! 

Technology has transformed the old paper-driven accounting systems in general business – to e-business. The standardization of accounting processes has enabled the development of easy-to-use bookkeeping and other accounting software for the general mass market.  Those solutions have driven the margins out of manual accounting practices.  But the airline legacy ticket settlement process has yet to make the transition to banking-link digital interactive settlement.  The industry is still dependent on ARC (BSP) settlement processes.  And the ARC/BSP processes are still dependent on accounting human intervention – but for product sold that no longer has the margins necessary to support the work.  Accordingly, the industry is stuck with the old and dying systems left over from an era now disappeared. 

What has to happen is that agencies must shed themselves of the ARC/BSP settlement process and begin using conventional accounting and banking transaction processes. They must move to interactive Internet enabled CRM systems that provide access in real-time from virtually any laptop, PDA, cell-phone or i-Pod.

Sabre recognizes this … as do Cendant, Amadeus, American Airlines, United Airlines, JetBlue, Southwest, MaxJet, etc.  The cruise companies are moving this direction; as are hotels and virtually all other travel vendor providers. These technology changes are driving social, cultural, and business process changes in all aspects of society. The pace of change is different in different parts of the world … but the change is ongoing and encompassing all of mankind. As a result, data and information is creating its own new dimension of management – both with respect to privacy and openness. These two virtually opposite paradigms will continue to “ying and yang” with each other for the foreseeable future.

Still, in today’s world of travel, agency owners concerned over the potential of data being compromised by Sabre have little to fear during the initial 12 to 18 months of the transition. First of all, there is no possible way for Sabre to recover its investment in TRAMS (or for that matter, maintain its integrity within the industry) were it to violate the sanctity of the data.  In addition, it would seem to me that Sabre will want to use the TRAMS acquisition as a leverage to entice more of the smaller agencies currently served by other GDSs into their domain. To violate the TRAMS trust would virtually eliminate that possibility.  

It is possible that data protection will become a problem over time as (a) Sabre people move to-and-from other business units in the company, (b) Sabre evolves its data mining platforms to convert agent-dependent customers into online users (a natural and on-going occurrence that nothing will stop), and (c) Sabre converts TRAMS agencies into using other Sabre online tools more effectively.  And there will be “data seepage” over time … as the different Sabre data management tools become increasingly integrated. 

The integration will happen because technology has transformed the old paper-driven accounting systems formerly used general business – to e-business processes (on-line banking, electronic funds transfers, fully automated tax filings, etc., etc. etc.). The standardization and on-line automation of accounting processes has enabled the development of easy-to-use bookkeeping and other accounting software for the general mass market.  Those solutions have driven the margins out of manual accounting practices. 

But the airline legacy ticket settlement process has yet to make the transition to banking-linked digital interactive settlement and processing.  The industry is still dependent on content derived distribution of product and ARC (BSP) settlement processes.  And for the most part, these legacy business distribution processes and ARC/BSP settlement solutions remain dependent on human intervention for management and accounting. But the margins that once funded these people-processes are no longer there. Accordingly, the industry is stuck with the old and dying systems left over from an era now disappeared.  The transition to technology-driven solutions must happen; and the acquisition of TRAMS by Sabre is only another step in that process.

That said, the small travel agents served by Sabre will NOT collapse as a function of this exposure; rather, these agencies (or their replacements) will transform the way they do business.  As noted in the last paragraph, this transformation is necessarily going to happen in any case!  I repeat, this transformation is going to happen in any case! However, whether the same owners of these agencies make the transition or not is a legitimate question. And the answer to that question almost lies in the demographic age profiles of these owners.

The great bulk of the “Baby Boomer” agency owners will opt out of ownership over the near term for brand or failed “company loyalty” reasons (see below). Maybe half of the “Gen-Xer” owned agencies will seek other roles in travel or elsewhere; largely those that can’t adapt to the “new team” rules or feel that cannot “justify” pricing to enable the margins needed to sustain their business (i.e. the low cost syndrome).

On the other hand, most agencies owned or run by “Gamers” will adapt and grow in the new environment; in part because they are more digitally astute and also because “Gamers” understand how to function in a “just in time” product packaging environment. In some recent talks, I’ve used the following graphic to address some of the drivers that influence these kinds of decisions.

❖ Culture Transformation …

Baby Boomers Gen-Xer’s Gamers

50 – 65 35 - 50 20 – 35

Remember TVs Remember Computers Remember Cell Phones

Person-to-Person Phone-to-Phone Digital-to-Digital

Follow-the-Leader Team is Right I’m always Right

Brand is Best Low Cost is Best What Fits the Need

Right for Company “In it” for Me Right for Me

Warehouse Inventory Retail Inventory Just in Time

For additional thinking on these age demographics in the travel indusry, visit >, last February’s OTWC.

Eastman's "Off-the-Wall Comment(s)"©  …

A review of this book was the second snippet in OTWC last month. I promised then to comment on whether the book met the reviewer’s claims. The book more than meets Irving Wladawski-Berger accolades.

In my comment’s last months, I focused on how culture inhibits our ability to even recognize the change that is taking place around us … let alone, adapt to it. In “Let Go to Grow”, Linda Sanford not only addresses the issues of culture … but provides an insightful view of why and how the high speed digital information of this century is driving all business processes to commoditization; and why componentization becomes the ensuring path toward off-setting the declining margins in our businesses.

In the above snippet, I’ve summarized the first chapter. Subsequent chapters deal with and supplement the bullet points.

I’ll be sharing thoughts with Los Angeles Business Travel Association members March 8 at their Education Day. There are two graphics in the slide deck which I modified to help explain the concepts of Ms. Sanford’s book. Some of you have seen the graphic (top of the next page) discussing the “Economic Progression of Value” as described by Joe Pine and James Gilmore in their 1999 book. I’ve added a component to expand on the effect of componentization of commodities as discussed by Sanford (right side of the graphic). For some readers of OTWC, this is will be a first visit to this graphic – so I’ll follow through with a brief description of the intended message.

Under the concept of the progression of economic value, the willingness of a buyer to pay more is proportional to the ability of a supplier to package a commodity with elements of “value-add.” A strawberry picked in the field becomes a good when sold as ice cream or syrup; a service when part of a restaurant’s parfait when served by a waiter; an experience when made into a fancy wine; and a candidate for transformation when tours all the strawberry growing fields in the world.

Under this premise, commodities with little product differentiation are turned into goods. Oil taken from the ground becomes gasoline for automobiles, jet fuel for airplanes, synthetic carbon in plastics, etc. Goods have perceived “value-add” and command higher prices. Goods are found in hardware or grocery stores. Many similar products are presented and buyer choice is influenced by nuances of perceived product differences and/or brand values.

Services represent another step up the progression of economic value. Lawyers and doctors and contractors all provide services; as do many restaurants. One knowingly pays for the human or skill expertise that enables the product or service provided to the buyer.

Paying more for an experience has become fairly common. Disneyland (or Disneyworld) or leisure travel are common forms of value-add that fit in this dimension; as is fine dining or wine tasting. These are often supplier-packaged commodities wrapped in presentation or service amenities.

And there are always a few people are willing to pay significant amounts of money for something that will transform the way they think or experience things. The Russian space travel sojourns represent an example; as do climbing the Himalayas, pursuing advanced academic training, or learning to fly.

The airline seat has experienced the reverse trend. It came into existence as a transformation when the Wright brother’s invented the airplane; became an experience in the 1920’s and 30’s, a service in the 1940’s and 50’s when it’s value-add distant travel choice was superior to trains or automobile travel. In the 1980’s and 90’s, air travel was a good – almost identical product available from any agency outlet with the primary difference being branding. We’ve launched the new century with airlines seats clearly a commodity … where the primary (although not sole) decision criteria is based on price. This paradigm is depicted by the blue airplane and the descending arrow.

Given the validity of Linda Sanford’s thesis, the only way to recapture the economic margins necessary to be an effective and growing organization – is to rebuild or package commodities into value-add product offerings. Sanford suggests that this is best achieved by evolving standardized interfaces or common-linking processes – so that any commodity using the common-link solution becomes a component. Thus, suppliers can package components “on-demand” to meet buyer-specific needs. Effectively, componentized commodities can now be re-combined to climb back up the progression of economic value ladder.

Now many in travel will claim that repackaging is the primary product of tour and cruise operators. But in reality, the “repackaging” by tour and cruise operators is not of the same dynamic which Sanford maintains is necessary. The old mechanisms of control and “value chains” prevail. Examples are everywhere … the GDS distribution channels, ARC/BSP centralized settlement (and reporting), lack of settlement agreements outside of those controlled by the airlines, supplier-driven pricing controls, supplier-mandated channel pricing, etc., … to less obvious examples such as lost bags (whether mishandled by TSA, airline, or ground handlers), FLIFLO misinformation, late airplane departures due to disparate operating processes between departments and/or airlines and/or airports and/or government service providers.

Standardization or common-linking processes simply do not exist across the various business services or disparate commodity components that comprise travel product. Sanford’s vision of commodity components rings strikingly close to Tom Tunstall’s3 call for outsourcing of corporate value-add services; and that outsourcing will become the market benchmark for pricing such services whether obtained internally within a company or by external solution providers; the primary difference being Sanford’s “components” of standardize ways to interface business processes, product parts, and/or the related dynamics of management.

The second graphic depicts the travel industry transition paradigm that we’re now experiencing. Airlines and the travel industry spawned out of the supplier-driven industrial age. Product efficiencies were derived through hierarchies that enabled top-down efficient and effective (in its time period) communication. As the CRSs transformed into GDSs, it became imperative to communicate financial settlement information fairly rapidly. The key here was that this information was controlled and communicated only among the airline suppliers. Each airline sustained its own “business” hierarchy (and/or management) – but the airlines banded together for the purpose of digitally distributing information about product offering via the GDSs.

With the evolution of the Internet, buyers acquired the skill to obtain knowledge and information about airline and other travel products. This buyer knowledge has significantly disrupted the supplier-driven information and control channels … the old “value chain.” The wide spread and ever increasing digitalization of information everywhere is transforming the travel product just as it is transforming all other social and business relationships. It is becoming increasingly clear that the commoditization of travel information within the networks of service and product providers is enabling buyers to instantly demand solutions to their travel requirements that are specific to their needs.

This demand-driven expectation simply forces travel product providers or packagers to further commoditize their products. In order to provide complete product that meets buyer’s expectations, suppliers must outsource common services, functions and/or product components to niche or tier level vendors whose specialization skills allow them to provide those component parts at a lower cost. As Sanford says, “Componentization decomposes the traditional value chains.” >

Paraphrased differently, the proprietary era where a Pleasant Holidays, Mark Travel, or Norwegian Cruise Lines can pre-package their product offerings and market them as integrated whole tour solutions to buyers is disappearing. Consider the evolving demand for FIT product today compared with just five years ago.

Concurrently, consider also how more and more components are being added to travel offerings. Parking inclusive or limousine services to airports are increasingly a part of most business travel packages. Commuter air carrier service is often packaged with hub-connection services … both operationally and through inclusive pricing. Consider how airlines are componentizing their in-cabin, formerly included, service offerings – charging for meals or for entertainment.

The problem with the travel packaging model is that packagers are simply pre-assembling the various commodities – and then manually “integrating them” into the offering. There are no common standards or linkages; no way to respond interactively to on-demand calls or pre-purchase inclusion of disparate commodities not already included. As a result, the necessary human intervention and added back-office service needs are eroding all of the margins and perceived economic benefit.

This lack of dynamic interactivity is a major problem for most of the legacy air carriers. OTWC readers understand my penchant for getting ride of the 1960’s digitally embedded legacy business processes that have literally bankrupted most of today’s major airlines. It is these very business components that need to be commoditized … and componentized with standardized open interfaces to allow other providers the ability to respond to these otherwise common business needs. Few if any of the traditional airline industry solution providers can offer open systems … even if they wanted to. It is across this business-process barrier that the new low cost carriers have become compelling alternative choices.

It makes no difference where one looks … within the travel industry or externally … the wavy red-line in the graphic above is representing a shift from supplier-driven proprietary product offerings to componentized commodity packaging. This trend is in response to demand-driven buyer requests and expectations. Failure to respond to those buyer expectations means lost customer.

Travel product packaging is already beginning to move from an “in-house” single-solution offering to what Sanford calls, “…componentized collaborations -- a “value web of synchronized relationships.” These solutions appear to be the only possible way for suppliers to capture viable economic margins in a world where ubiquitous information results in a never-ending trend toward commoditization of all common travel products – be they airplane seats, hotel beds, ground transportation, or entertainment services.

Thus, to remain competitive and viable going forward, airlines, agencies, tour vendors alike … need to focus on acquiring the knowledge and expertise to ensure passage through the stormy technology transition ahead. The proprietary GDS, airline, and hotel hosting platforms are fading away – to be replaced by dynamically linked hardware and software technology solutions that can and will respond to buyer expectations.

It will make no difference where the “buyer” is in the “value chain” … i.e. the buyer of the product or the buyer of a service that enables the product – the key element to participating in that travel future is the ability to provide and integrate using an open systems technology information platform.

Eastman's "Off-the-Wall Comment(s)"©  …

First of all, let me point out that Northwest did reach an agreement with the Professional Flight Attendants Association on March 2. There was no mention in the press at the time suggesting that the plan outlined above was rejected or eliminated; nor was there any mention of it being approved.

Still, it seems to me that most of us miss the point; get emotionally entangled in the confusion over lost jobs or jobs going to overseas sites.  In Tom Tunstall’s yet-to-be-published “The Market Benchmark[1]“ (briefly noted in December, 2005), he discusses how markets and outsourcing are supplementing traditional management and business processes; how tasks like accounting, human relations, administration, telephony, computer support/maintenance/management, sales, marketing, etc., are all subject to being outsourced. 

The issue of outsourcing is NOT a discussion about foreign vs. US workers; but rather, the reality of how competitive free-market based service needs are off-setting the historic model of the economic viability of a  large corporation to derive benefit by employing people to provide the same services.  Outsourcing is, effectively, the further componentization of commodity services – as is discussed in the comment above.

In the airline industry, we tend to think of a “transaction” as buying a seat or creating a booking.  But in reality, a transaction is larger; it includes all of the costs of providing a service.  Thus, accounting, the integrated IT functions, administration of a corporation’s activities are all “transactions” that can be tied back to unit costs – just as accountants and economists do with manufacturing units; or as financial analysts so well with airline operational unit costs.

In such a business model, increased transaction efficiency drives all large corporate profits. In the evolving “new economy” (whether one calls it the digital, knowledge, or information economy), the ubiquitous availability of information means that specialization will begin to rapidly evolve as business’ and innovators strive to serve increasingly smaller arenas of various service-sectors. 

Yet the airline and travel industry have not developed the measurement criteria to establish such definitive unit cost factors when it comes to “services” provide by people … i.e. reservation agents, flight crews (pilot or cabin), maintenance, etc. in the airline sector or back office services, reporting, accounting, etc., services in distribution channels. 

Bits and pieces of the travel industry do have unit costs; on-line versus agent-based booking as an example, identify the disparity of paying $5 versus $27 for a booking that creates an economic distortion for virtually identical transaction services.  The latter simply cannot sustain itself in a market-driven society. Yet even these “component” costs incur distortions in that they include administrative and support services costs derived from different sources (or more likely, excluded or ignored in the case of online services).

The rapidly digitization of virtually all transaction costing components forces companies to identify whether a service or function is better outsourced or managed internally. In a commodity-driven world, disparities in component costs cannot sustain themselves among competing companies; nor even within a single corporate entity. 

As service-sector processes become increasingly competitive, external specialists will make it more cost effective to outsource a service need than to retain a function within a company’s internal management structure.  In other words, it is and will be cheaper to outsource the “transaction” aspect of a common business process or service (which may include cabin crews, automating sales efforts, using interactive voice check-in at airports, and so forth) than to develop and maintain such services within the company. 

This is a global dynamic brought about by the ubiquity of information and the speed at which that information can be processed.  Large corporate structure are no longer the fastest, most efficient, or even the most secure way to communicate, educate, learn, manage and/or provide services.

Yes … much of the early outsourcing is going to parts of the world were costs provide an economic advantage.  In the end, that means that products are sold in the domestic market at lower costs … which builds the effective buying power of each domestic person’s paycheck.

Concurrently, there is “pain” to those who lose jobs due to outsourcing – whether it’s domestic outsourcing, foreign outsourcing, or automation outsourcing.  It is important to understand that outsourcing is outsourcing – whatever the outsource solution becomes.

The “pain” of lost jobs more accurately reflects a need for re-training and/or new business practices in the economic ecosystem of an open or free-market economy.  And the last 100-plus years would suggest that an open or free-market economy is what provides the greatest growth … economic, social, political, and bio-medical … for all of society across virtually all geographic and cultural boundaries.   

While Becker’s reflection that > probably reflects the legal needs of the moment, it is probably an accurate reflection of what is transpiring.  And the never-ending commoditization of virtually all products is forcing both componentization and interactive context-based product (or component) re-packaging to enable the profit margins necessary to support modern business.

The commoditization of travel products throughout the world is rapidly (in terms of known society) eroding most political, geographic, language, and cultural barriers. It is a reality of high speed information processing and the ensuring rapid expansion of people’s abilities to manage their knowledge, interests, skills, and motivations. 

Respectfully,

\\ Richard

Copyright © 2006, The Eastman Group, Inc. 

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[1] “The Market Benchmark : Why Markets and Outsourcing Will Topple Old School Management Styles”, Thomas Tunstall, PhD, © Copyright 2005 Thomas Tunstall (thomasntunstall@) : unpublished manuscript. All Rights Reserved

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From USA Today©, February 2, 2006

…. "Outsourcing would be a misnomer," said Michael Becker, Northwest's senior vice president of human resources and labor relations, in response to a cross-examination by Thomas Ciantra, attorney for the pilots union. Becker was referring to the carrier's plans to replace U.S. flight attendants with foreign workers.

Northwest Airlines wants to replace 30% of flight attendants on its international flights with non-U.S. flight attendants, roughly 800 people, to cut costs so that it can emerge from bankruptcy, a company executive testified in a New York bankruptcy court Thursday. Northwest, which filed for Chapter 11 bankruptcy protection in September, seeks to save $1.4 billion in wage and benefit costs. Thursday was the seventh day of hearings devoted to the airline's request to toss out collective bargaining agreements with the unions.

From “Let Go To Grow : Escaping the Commodity Trap”

Lynda S Sanford, Senior Vice President IBM

Deregulation, globalization, and the Internet are fueling the growth of commoditization in just about every industry. To grow profitability, you must let go of traditional control mechanisms and organizational practices typified by the common value “chain.” Instead, you need to open up your business by building and participating in value webs, where value is built by a number of companies coordinating their individual capabilities to create a whole new business ecosystem.

Value webs are dynamic linkages across firms … utilizing dynamic processes rather than transactions … accessing specialist services even in “core” business areas … creating new collaborations in research, design, manufacturing and customer services … [and] enabling innovations by customers, suppliers, and business partners.

Letting go means [it is necessary to] &

Ï% componentize your business

Ï% integrate components end-nnovations by customers, suppliers, and business partners.

Letting go means [it is necessary to] …

● componentize your business

● integrate components end-to-end

● expand through collaboration

● liberate cost structures

● foster innovation

● drive productivity [in lieu of efficiency]

● fit [the component] pieces together [to grow]. ….

The pressures of economics and competition drive componentization; standardized interfaces for both products and business capabilities become a requirement for efficient business and intercompany coordination. …. Componentization rationalizes processes and fuels growth of value webs. …. Growing your business in the new century is going to require that you let go of traditional control mechanisms [and] value chains, and [build new ecosystems with value webs that become] a consortium of coordinating firms pooling their capabilities and resources.

“Let Go to Grow: Escaping the Commodity Trap” : Linda S. Sanford with Dave Taylor, © 2005 by IBM : Published by Prentice Hall PTR, as subsidiary of Pearson Education : $17.49 at >

From: Travel Weekly, 13 February, 2006

Sabre acquired Trams, a leading mid- and back-office solutions provider for leisure agencies, and plans to integrate Trams' offerings with "existing and future Sabre solutions," the companies said. Trams' products, including ClientBase Plus with Live Connect, Marketing Advantage and Back Office, are used at some 11,000 agency locations, and ASTA reports that more than 80% of its members use the back-office solution, the companies said.

E-Mail From: Bill Roebuck of Travel Technology Tools, 15 February, 2006

Hope to read your [OTWC] comments on Lee Rosen TRAMS sale. TRAMS filled a much needed "hole" in Travel Accounting and Reporting during the Mid 90's. Ending up to be the dominant system in the 2000's.

Fairly priced, generous functionality, with many add-on vendors and a support/management staff that kept in touch with its users. Will Sabre be able to hold on to 11,000 TRAMS customers? Can the "corporate giant" do it as well as the successful entrepreneur?

Excerpt of E-Mail From: Michelle Morgan, Executive Director, Signature Travel Network, 13 February, 2006

…. I'm also curious (off the record) about your assessment of TRAMS acquisition by Sabre.  Many of my members are up in arms....your thoughts? ….

Eastman’s Off the Wall Comments©

February 2006

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