How Avis Budget Group approaches innovation, business, IoT, smart cities

We caught up with Arthur Orduna, chief innovation officer for Avis Budget Group, to talk smart city, data, connected fleets, and user experience.
Written by Larry Dignan, Contributor

Avis Budget Group, which operates the Avis and Budget rental car business as well as Zipcar, is investing heavily in information technology and data to revamp its business and customer experience.

These business and technology initiatives are being led by a tag team of Arthur Orduna, chief innovation officer at Avis Budget, and Gerard Insall, chief information officer.

CEO Larry D. De Shon outlined a laundry list of digital transformation efforts on the company's first quarter conference call. The outline goes like this:

  • Avis Budget is developing its demand fleet pricing yield management system using algorithms and automatic price adjustments. The Demand Fleet Pricing system is being piloted in the US. The system analyzes billions of pieces of data to inform pricing, demand, and improve decision-making over what autos to move. "We're still learning how best to use this system to drive day-to-day decision-making, but the teams have gotten their hands on it and are incredibly enthusiastic about its potential," said De Shon.
  • The company launched a new Avis.com platform and mobile apps to handle payments. So far, the platform has led to a more than 10-percent increase in prepaid reservations in the first quarter.
  • Avis Budget also has a bevy of efficiency efforts underway ranging from scheduling tools, workforce planning, and demand modeling.

Here's a look at part of the master plan for Avis Budget in two slides.


Amid the moving parts at Avis Budget, we caught up with Orduna to talk shop. Here's the recap:

How two CIOs (innovation and information) work together. Orduna said he's connected at the hip with Insall. "We both look at today as well as tomorrow and we both look at how we can change and disrupt our own businesses to grow down the road," explained Orduna. "Gerard looks at the next 12 to 24 months and my smaller team looks beyond 24 months. We do a lot of brainstorming as mutual teams. There's also no official funnel for innovation. The next good idea can come from anywhere in the company." To that end, one key goal for Avis Budget is to empower its 30,000 employees to solve problems--internally and customer issues.

The three brand challenge. Orduna said data and using it well is critical to his company because there are three brands -- Avis, Budget, and Zipcar -- with individual value propositions. Where things get interesting is that often the same customer may use all three brands depending on the problem she is trying to solve.

To that end, Orduna noted that a few decades ago the three brands would have had their own technical silos. Today, Avis Budget is creating a user experience that goes cross-brand. "UX can't just be UI. A key pillar is how do we address a customer with an experience that is personalized or contextually specific?" said Orduna.

Data is the glue. Whether it's Avis Budget's connected fleet or apps or internal initiatives "data drives a lot of digital transformation," said Orduna. For instance, telemetry is used to help manage the auto fleet from customer experience to maintenance. In terms of the Internet of Things, Orduna considers autos to be dynamic and mobile end points. Avis Budget has 50,000 connected vehicles in the fleet with another 50,000 on deck. Data covering car to driver, vehicle to vehicle, and vehicle to smart city and environment hold a lot of potential.

Smart city applications. One area that Orduna sees as ripe for innovation is the smart city. Today, there is a "highly academic sheen in the way we look at smart cities," but the industry can boil down to something more pragmatic. Orduna sees vehicles and customers interacting with smart city data. For instance, data from a smart city can tell a customer where a parking spot is open and areas to avoid right now. Today, that data is mostly available via crowd sourced apps like Google's Waze. However, municipalities can start sharing more nuanced data. "Instead of time to arrival, a customer is really looking for time to meeting, which would include the time to park a car," explained Orduna. "That data will be accessible from a smart environment. It's early days from a scope and scale perspective, but we're already thinking about it. By default, we have to start understanding what a smart environment means for us."

Role of the cloud. Orduna said Avis views the cloud as more than a way to move infrastructure and costs. The true return of the cloud may be in new models. "Who can we work with in new ways as part of a transformation with APIs and cloud-level integration?" asked Orduna. Those big questions are safe to ask given that Insall has eliminated a lot of technical debt at Avis Budget over the last decades.

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