Airport Software Solutions and Services Sourcing (2022)

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3   Introduction Software, hardware, and services coexist as technology tools. When procurement and tech- nology are recognized as focused areas of expertise, the following broad definitions can create a common language: • Hardware: Physical elements that make up technology (Stoltzfus 2020) • Procurement: The end-to-end process of identifying a need to acquire hardware, software, or technology services (Lowe 2021) • Technology Services: Professional technology-oriented offerings that facilitate the use of tech- nology, including cloud-based or managed services (Andrew Jarrett, personal communication, January 14, 2021) • Software: Programs and operating information used by technology (Gupta, n.d.) • Sourcing: A process for finding and vetting vendors and suppliers (Lowe 2021) Scope This synthesis compiles the most efficient and innovative technology procurement practices employed by a diverse selection of airports. The included data provides insights into the chal- lenges and successes as well as the tools and collaboration methods used by the airports as they navigate the dynamic and evolving technology procurement environment. Chapter 1 provides context, including background on the problem, definition of terms, and synthesis organization. Chapter  2 presents common themes identified in the data collected during the literature review, interviews, and surveys submitted by airports of all types and sizes, industry associations, technology suppliers, and consultants. Chapter 3 organizes these themes by governance structure, Chapter 4 by procurement vehicle, and Chapter 5 by innovative practices. Chapter 6 gives case examples that offer deeper connections to these themes. Chapter 7 summa- rizes conclusions, identifies gaps in knowledge, and offers recommendations for future research. Background on Importance of Technology Procurement Technology creates greater efficiencies, reduces error, and prevents fraud in industries of all types and sizes. It has become the differentiating factor for airports that successfully transformed operations during the disruptions caused by the COVID-19 pandemic and the subsequent return to more typical operations. Airports that discuss and plan for technological needs can use these discussions and plans to define or refine existing procurement processes, including thresholds, staff responsibilities, and purchasing requirements. Positive byproducts of such dis- cussions include advance planning and a reduction in barriers to adopting technology in highly scrutinized processes such as procurement. C H A P T E R   1

4 Airport Software Solutions and Services Sourcing Procurement technology is available to airports and is heavily utilized to ease the procurement process, reduce potential problems, and create a means for tracking data (Universal Class, n.d.). Controls and systems are used to properly manage access, freeing experts to address complex tasks such as providing technical assistance and developing traveler-focused initiatives across all business lines. For example, the Port of Seattle created an IT governance board to “prioritize and demonstrate ROI [return on investment] benefits as part of investment decisions and strategies prior to funding” (Baliva 2018). Workforce advancement is also a byproduct of improved technology procurement practices and procurement technology. Procurement specialists have transitioned capabilities from “clerical efficiency” in acquiring the lowest price for products and services to “buying for the best value” for the enterprise (Michigan State University 2021). As a result of such improvements, indi- viduals assigned to a procurement task can become more aware of options, opportunities, and innovations that will best serve the airport and the traveling populace. Technology procurement process automation and transparent best practices allow greater productivity, visibility, and cost efficiency throughout the procurement process (PYMNTS 2017). Current technology procurement practices are challenging to navigate, particularly when they engage with multiple levels of governance. An integrated plan or an established technology procurement program, or both, will increase maturity in procurement sourcing and vendor relationships. Figure 1-1 demonstrates how an integrated plan is used to address knowledge gaps and is vital for airport success. Figure 1-2 illustrates repeatable and predictable technology procurement processes that lead to increased efficiencies and cost savings. Study Methodology The methodology used for this study included three overarching categories for organizing deliverables and setting expectations: meetings, actions, and reports. The literature review estab- lished a baseline for interviews and surveys. Data analysis and case examples concluded the synthesis. Figure 1-1. Illustration of integrated plan for procurement (Source: Fortin et al. 2017).

Introduction 5 Literature Review The literature review allowed researchers to obtain the most current knowledge, practices, and relevant research pertaining to airport software solutions and services sourcing available. Governance structure, airport size, types and amounts of funding, use of third-party solutions (e.g., coop- erative agreements, value-added resellers, and consultants), and embedded requirements (e.g., legal, licensing, and data ownership) provide a snapshot of the nuances associated with technology procurement in airports. Procurement is a highly scrutinized and audited process. Government procurement complies with, and most governance structures adopt, the Agreement on Government Procurement under the World Trade Organization. Sustainable procurement practices follow published regulations. Several entities provide procurement certifications and training. The National Institute of Governmental Purchasing (NIGP) Board of Directors finalized and adopted official Values and Guiding Principles (NIGP, n.d.). Broad categories for these principles include Accountability, Ethics, Impartiality, Professionalism, Service, and Transparency. NIGP values often influence the behavior of procurement profes- sionals in the creation and implementation of policies. Policies for procurement generally relate to an airport’s vision, mission, and goals. Care- fully devised plans articulate available and future resources while balancing business unit needs, demands, and interests. Manuals, templates, and forms facilitate regular reporting and strategic direction for defining scope, schedule, and cost—necessities for accountability and compliance with relevant laws and regulations (Baliva 2018). Useful tools, such as an organization chart illustrating decision-makers’ contact information and their availability in the procurement process provide the knowledge needed by airport stakeholders at all levels of experience (Defant et al. 2013). Procurement technology has increased the focus on IT departments at airports. From inno- vation and automation to system support, “airport IT departments have become the backbone of the business.” (McAllister 2012). Demands for integration, centralization, management, and maintenance will only increase as requests for new solutions continue to rise. IT departments are often required to interpret a business unit’s needs, analyze existing solutions for solving the need, and clarify the exact hardware, software, or service scope for procurement. Airport software solutions and services include procurement of software, hard­ ware, and services, collectively referred to as technology procurement for this synthesis. Develop and provide IT and procurement objectives. Align resources, including trained staff to establish accountability and responsibility. Create a scalable technology procurement model. Review the model and objectives annually to support changing business needs. Figure 1-2. Steps to develop a predictable technology procurement process.

6 Airport Software Solutions and Services Sourcing Technological expertise at airports is varied and often limited to the IT unit, at a time when IT expertise is already in dire shortage in all industries. Before the COVID-19 pandemic, 69% of business enterprises were already experiencing an IT shortage. That number has increased to 75% in key IT roles, and the expected recession is likely to continue to widen these talent gaps (Riffle 2020). Airports resistant to technology procurement or to procurement technology tend to use as much of an asset as possible (also referred to as sweating an asset) before investing in new capacities or in building relationships across the airport. Continuous exploration of technology that is capable of performing routine functions initiates the needs analysis process earlier and builds relationships with business units, vendors, and suppliers. Relationships with suppliers and opportunities for continuing education equip employees to perform complex functions such as analyzing business operations, thus reducing reliance on external procurement specialists for unbiased decision-making, increased customer satisfaction, and reduced employee turnover (Kakwezi and Nyeko 2019). Interviews Given the diversity in technology procurement practices, the contracting team conducted 26 interviews as the primary means for data collection. Of these interviews, 17 were with airports representative of each National Plan of Integrated Airport Systems (NPIAS) classification and FAA region. The remaining six included one Cooperative Purchasing Program entity, one service provider, one software supplier, four consultants, the FAA, and Airports Council International– North America (ACI–NA). Interview questions (see Appendix D) facilitated discussions regarding the following topics, with responses summarized in Chapter 2, provided as case examples in Chapter 6, and captured in Appendix E: 1. Governance (public, quasi-governmental, and corporate), airport size, and airport activity and their influence on technology procurement 2. Integration of IT and procurement specialists in planning and procurement 3. Procurement process strengths, weaknesses, and opportunities 4. Technology procurement leaders Survey Interviews were analyzed and gaps in knowledge were identified. An 11-question, radio-button survey was then dispersed to 72 contacts, including airports of all types and sizes, ACRP Ambas- sadors, and the ACI–NA Business Information Technology Committee. Researchers collected 20 results (a 28% response rate); these are summarized in Chapter 2 and available in Appendix B. Data Analysis Data was collected from all FAA regions and two foreign entities for this synthesis. Figure 1-3 illustrates interview and survey respondents by FAA region, and Figure  1-4 shows survey respondents by airport classification. Analyzed data produced three themes. 1. The criticality of the airport IT business unit. Visibility and essentialness of airport IT busi- ness units differ based on airport governance, size, and activity. Airports leading innovation have immersed IT in planning cycles, sourcing initiatives, and procurement processes to ease purchasing and IT barriers.

Introduction 7 2. A knowledge gap between end-users, technology procurement specialists, and IT experts. The depth and breadth of end-user day-to-day function, procurement rules and regulations, and technical jargon in IT create a disconnect between analysis of the need, request for a capability, and procurement of necessary technology. Daily necessities and reactive responses take precedence to root cause analysis for detailed scoping and advance planning. 3. A reluctance to question traditional procedures, which further exacerbates the knowledge gap. Central approaches reinforce a narrow decision-making structure that uses on the most popular contracting vehicle, the request for proposal (RFP). Airports using technology for greater transparency and innovative approaches incorporate networked decision-making governed by an integrated plan. Case Examples An assortment of approaches and various maturity levels in technology procurement created six diverse case examples (see Chapter 6). Specific elements, including operational patterns, per- formance benefits, challenges, and lessons learned, create a relational context for the synthesis target audience. Note: Seven survey responses submitted anonymously. Figure 1-3. Interview and survey respondents by FAA region (Source: FAA 2021). 7 7 3 2 3 4 1 1 1 0 1 2 3 4 5 6 7 8 Figure 1-4. Survey respondents by airport classification.