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A history of innovation at Amadeus: a Q&A with Denis Lacroix VP, Product Development

Daniel Batchelor

Global Head of Corporate Communications, Amadeus IT Group

They say a week is a long time in politics. And if that oft repeated (and rather pithy) maxim is even halfway true, then I wonder what 24 years at Amadeus represents? Because since 1989, both Amadeus as we know it today, and the wider travel technology industry more generally, are largely unrecognisable from when a young Denis Lacroix first walked through the doors of Sophia Antipolis just before the onset of the 1990s.

Today, and as part of our on-going look at innovation this month, we thought it was high time we caught up with Denis to pick his brains on everything clever going on at Amadeus and beyond, and to hear from the horse's mouth so to speak on what he is most proud of during his long tenure within the business...

What changes have you witnessed in R&D and product evolution since you first joined Amadeus?

Our core objective, and overall modus operandi - to deliver creative, out-of-the box, different thinking - is exactly the same as it has ever been. It's effectively part of our DNA. But what has changed, and this is immediately obvious to anyone looking at things in 2013 compared with 1989, is the sheer scale of our R&D operation. We have somewhere in the region of 5000 employees today working all around the world permanently on research and development, whereas when I first started it was something closer to 250, and nearly all of those were in the South of France.

The other thing that's markedly different today is that clearly greater scale means we've become a more structured organisation, with more process and routine, which helps in turn to create the space, framework and time needed to genuinely innovate. I would also say that today we are committed, perhaps obliged, to placing much more business rationale behind what we do and the decisions we take. In this sense we are more disciplined now than ever before. But something it's always important to remember is that just because there is no business case does not mean that something is a bad idea...

Looking beyond Amadeus for a moment, another change today is that as an industry we tend to think more short-term than we did before. In our product planning we tend to think in terms of three, four and five year cycles now rather than something substantially longer-term, which was more the norm in the past. Unfortunately sometimes when companies take a longer-term view in terms of their R&D, especially with regard to product innovation, it becomes easier to justify thinking and decision-making rather than deliver something truly innovative. In reality the right balance is most likely somewhere between the two.

What does innovation mean to you?

Innovation without investment is isolation - this has long been the mantra around here. Of course we want people to come up with good ideas, and essentially to improve the way we do things. But first and foremost we want innovation to have a material business impact on the company. And not always from a pure R&D perspective. Sometimes we want that impact to be commercial, and in its broadest sense. For instance, if you look at something like the value based pricing which we introduced - this is an incredibly effective innovation (revolution if you will) in terms of our pricing models.

So in that sense innovation doesn't always have to mean the cleverest or most creative. Yes it's always encouraging to win public Hackathons and to display our credentials and put our minds to the test with our competitors and colleagues - but despite the obvious wow factor and all-round good feeling something like this generates, it is not always clear, how the outcome will take the business forward.

What in your mind are the top 3 'innovations' you've seen or led during your time at Amadeus?

By far and above the single most innovative thing I've seen at Amadeus, was the conception of the very business itself in the beginning on day one: to create a system whose core reservation capabilities would be used both by our GDS and airlines. It is something which is often overlooked or underestimated because it seems so normal now. You must remember that the industry at the time was dominated by North American players. So to pull together a European GDS platform, and to convince four leading European airlines to take the plunge in tandem, was incredibly groundbreaking. I'm personally convinced that this remains the number one reason why Amadeus has built itself to be so successful.

Secondly, the concept, and then the speed of implementation thereafter, of the local Amadeus commercial organisations around the world was staggering. It really was a stroke of genius to cover the four corners of the world so quickly and so successfully. Very, very quickly Amadeus went from having a presence in five or six key markets to being on the ground in 195 countries around the world.

Thirdly, and it may surprise you to see a product innovation coming third in a list of my top three 'innovations', but I would have to say Extreme Search. This was, and remains, truly pioneering, and the initial concept can be traced back to the origins from which Affinity Shopper won a best innovation award at PhoCusWright. Even today I can list a range of customers which Amadeus has won through the ingenuity of Extreme Search and before that Affinity Shopper. This showed our ability to do something unexpected.

What's the balance between following our customers and leading them?

We are certainly leading some of the innovative thinking which is taking place - and backing it with serious investment - but we will always need a sounding board. We like to use pilot/launch customers so we can work together in partnership, and not least because we need our products and services to reflect the needs of our customers' customers in the marketplace. We also need to make sure we don't lead in the wrong direction, and so we try to align with and take guidance from our customers wherever we can. Somewhere where I feel strongly we have shown the way almost exclusively is with e-Commerce. We run some of the very best sites in the world including those of Qantas, Air Canada and Lufthansa. These are truly world class airlines websites and we should be very proud of our work there.

What does the future hold for innovation in the travel technology space?

Every business will need to balance innovation with the reality of financial and commercial pressures and expectations - but I would hope they don't force us to make wrong decisions when it comes to continuing to be innovative. Long-term you can justify anything - the challenge is seeing a return more quickly. Often we forget how long it takes to create then foster genuine innovation. And ambitious targets can get in the way of the world's very best and largest companies.

It should have taken 30 years to be the number one airline passenger service systems provider in the world and yet it took us probably closer to 10. I think looking more broadly at the industry there is also a lot more to come in the mobile and payments space. It's just so much of an opportunity. We can't predict the specific path it will take, but there is so much that can be done that it's just a matter of time really. If you look at payments via credit card for instance not much has changed in 20 years.

To this end the big opportunity is to revolutionise the payments industry, not just evolve it organically over time.

Tweet us with hash tag #1Ainnovation and let us know what innovation means to you. 

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