Facing massive losses, pressure from low-cost competitors and the
aftermath of the terrorist attacks in the US last year, British
Airways has achieved considerable cost saving with its
business-to-employee initiative. Sally Whittle reports.
Things were already looking bad for British Airways last summer.
Facing cut-throat competition from low-cost airlines and a 5% fall
in passenger numbers, the airline was haemorrhaging £2m a day and
had cut 5,800 jobs. Then came 11 September.
"Spending fell off a cliff," says IT architecture director Phil
Matthews. Following the terrorist attacks in the US, BA embarked on
a £650m cost-cutting programme and said 7,200 more jobs would have
to be go. "We had to do a lot of rethinking and rationalising.
Maintaining the business capability while running down 13,000 jobs
had to be the priority," he adds.
Top priority now is given to an ambitious business-to-employee
(B2E) initiative that will save £75m a year in staff and
administration costs. The airline has spent 18 months revamping its
corporate intranet to provide staff with an e-working programme
that will include e-learning, self-service applications and
improved workflow. An Internet Protocol (IP) network and a series
of wireless local area networks (Lans) will offer BA's 18,000
mobile workers access to the applications.
Kathy Harris, research director with analyst firm Gartner Group,
says, "Increasingly, B2E initiatives are being seen as an
imperative." B2E can just be moving human resources processes
online, but it also spans knowledge management, e-learning,
self-service and business intelligence. Starting with an intranet,
it has the potential to transform entire enterprises, she says.
At BA, the e-working programme will span the whole company and is
the biggest IT project it has ever undertaken, Matthews says. It is
made more challenging since all 980 IT contractors employed by BA
were laid off earlier this year. "We have to use people more
efficiently if we are going to maintain the business capability,"
says Matthews. The airline has reorganised its IT department around
a centrally-managed pool which rotates staff between projects. A
group of senior managers make up the design authority, which is
responsible for creating strategy. An additional layer of senior
architects oversees individual projects.
Matthews estimates that BA has invested £8m in e-working so far and
generated savings of £10m. Much of the success is due to
self-service applications. "We have eliminated 1,200 forms;
consolidated our helpdesks; cut the training function
substantially; and improved productivity," says Bill Thomas, a
project manager with the design authority.
The online holiday- and route-bidding system, for example, lets
crew request particular trips or days off online. Their requests
are processed automatically and in many cases a response is
generated in seconds. In the past, staff asked for time off through
a central scheduling unit where telephone operators wrote down
requests and passed them on to managers.
According to market analyst Butler Group, 80% of companies are at
least planning B2E initiatives. Butler senior research analyst Mike
Davis says, "Empowering employees can deliver extremely fast
benefits, which is why we have not seen any slowdown in adoption of
B2E. There is no point asking someone to print and fill in the
expense form then passing it on to someone else who enters the
information into an application."
However, IT involvement is essential if companies want to deliver
the maximum, long-term benefits of B2E, Davis adds. "Many early
projects were business-led and delivered great early results. But
the real potential is in standardising on a single directory;
consolidating servers and storage; and simplifying the security
architecture," he says. "Unless IT is involved at the start, many
companies will miss out on that."
A steering group comprising business unit and IT staff at BA
designed the e-working programme and an infrastructure was built to
support it. This includes a single Netscape directory, redesigned
intranet and all-new IP network to speed up performance. The
airline's security architecture has also been redesigned so that
the 32,000 remote and mobile workers can access the self-service
applications over the Internet.
These staff work in customer-facing roles at airports or on
aircraft and are more difficult to communicate with, says Thomas.
"You can't phone them because half of them are asleep in another
time zone, and they may only be in the office once a month," he
says. "Letting them access this stuff using Internet kiosks at
airports or through their home PCs will provide a real boost to
productivity."
From next month, senior cabin crew will have Compaq iPaq handheld
computers providing mobile access to corporate information,
customer service manuals and BA timetables. Crew will use the
devices to fill in forms on embarkation and landing, and devices
will be synchronised at either end. Later in the year, BA will be
testing in-flight connectivity, Matthews says.
The roaming access is also being extended to the corporate
headquarters at Heathrow, with a series of wireless Lans which will
let staff work anywhere in the building. Together with a
hot-desking system, BA hopes to increase the capacity of the office
by 1,000, allowing the company to sell other real estate assets.
The final element of the e-working programme is a business
intelligence scheme that will integrate all of BA's enterprise
reporting applications into a single portal. This will provide
5,000 knowledge workers with access to BA's datawarehouses.
Potentially, this could provide the greatest savings of all, says
Matthews. "We have invested a lot of money over the past 15 years
in datawarehouses that, as many companies have found, people simply
didn't use," he says.
The past year's cost cutting has been challenging for everyone at
BA. "We had to do a lot of this on zero spend, and that has been a
good learning process," Matthews says. "We have all learned how to
make a little go a very long way."
BA's recently published April-June figures are a sign that the
medicine seems to be working.
BA's e-working programme
Self-Service Applications
Office workers use the
intranet to access a range of applications which have replaced
telephone and paper-based support functions. New systems include
online helpdesk applications from RightNow; Oracle's HR
administration; workflow from Oblex; Lotus e-forms; and procurement
from Ariba
Remote Access
The airline's 18,000 remote workers can
access the secure copies of applications and the intranet via a new
Cisco Internet Protocol network. Policy Director software from IBM
lets workers access Lotus/Domino applications securely
Mobile Working
Workers in the BA headquarters will
soon be able to access the network through wireless local area
networks (Cisco) and hot-desking will be used to increase the
building's capacity. From next month, cabin crew will use Compaq
personal digital assistants to access manuals, timetables and
roster information on the move
Business Intelligence
The company is testing portal
software (Business Objects) that will provide a Web front end to
its proprietary and Oracle datawarehouses.