Investments in IT have played a key role in boosting
British Airways’ profits by 20% to £620m in the face of rising fuel
prices and growing competition from no-frills
airlines.
BA chief information officer Paul Coby said the airline had used
technology to drive the streamlining of business processes,
removing complexity and cutting costs.
The strategy helped BA transform its short haul flight
businesses, which made a profit of £7m last year, after 10 years of
losses, the airline said.
“The hidden multiplier is that if you are going to automate, you
have to understand the process and simplify it. Complexity will
kill you and slow you down. IT has been an enormous leader in
simplifying BA’s business,” said Coby.
The IT department’s strategy is to ensure that, rather than
having multiple IT systems with multiple sets of data, it has the
minimum number of IT systems needed, based around a single set of
customer records.
The airline has been investing in its BA.com website, which
accounts for 33% of sales in the UK and 80% of sales worldwide, as
its core IT system. The system has been designed and managed
in-house. “We see this as our key differentiator,” said Coby.
“We said we would make dealing with BA so easy you would want to
do it yourself online. We called the project Customer-Enabled BA
internally, because it was about enabling our customers. It was not
technology for technology’s sake.”
The airline has recently completed a sophisticated programme to
integrate the BA.Com website with the airline’s call centres,
allowing both sales channels to operate using a single set of
data.
“Our teams have worked with the call centre and talked with
staff to understand the call centre operation. The clever thing is
to take data and make sure it moves from one system to another.
That has been the challenge,” said Coby.
Moving towards e-tickets, which represent 87% of tickets issued,
has reduced costs and simplified BA’s operations. In the past,
cardboard ticket stubs were collected, scanned, and sent through a
central clearing house.
“Six months later you might found out what you flew and what
your revenues were. With e-tickets, you find out your revenues as
soon as you have clocked in,” said Coby.
The airline has set itself the target of selling 50% of tickets
worldwide online within two years and handling 50% of ticket
queries, changes and upgrades online. This will rise to 80% when
Heathrow’s Terminal 5 opens for business in early 2008, said
BA.
The IT department is also developing ways to make it easier for
customers to manage excess baggage online and is working on an
electronic shopping basket that will allow customers to buy
complete holiday packages, including flights and hotels,
online.
A project is underway to develop boarding cards that can be
printed from a home PC. They will use barcodes that can be read by
a scanner at the airport.
“Our philosophy has been to build systems for customer use,
build it right and build it once. It is cheaper for the airline. It
is also much simpler to change your processes because you have one
system,” said Coby.
Quality Up, Costs Down
Innovative use of technology has enabled British Airways to
improve the quality of its IT operations while reducing the costs,
BA CIO Paul Coby told Computer Weekly.
“We have reduced the cost of running our IT operation by 40%
over the past four years. We are not only doing more technically,
we are running it more efficiently. Also, the quality has improved
by two or three times. We have done that by simplifying and
standardising how we run the technology,” he said.