Following major changes in IT leadership two years ago, the technology strategy at British Airways (BA) is alive and well, the focus being infrastructure modernisation and increasing revenue through smarter use of customer data to survive through tough economic times.
Since Paul Coby – chief information officer (CIO) at the airline for over a decade – left the company in 2011 following the merger with Iberia, the two most senior people in IT at BA now are Mike Croucher (pictured), head of IT architecture and delivery, and Steve Harding, head of IT operations and infrastructure. Both report to Philip Osmond, director of business services.
“We never replaced Paul, we just split the IT organisation into two areas. Steve’s role is to run the datacentre operation efficiently, and mine is to lead a department through change,” Croucher told Computer Weekly.
He says there is no plan to reinstate the role of CIO at the airline, with BA’s IT department in a better shape under the new set-up.
“We have moved the IT department back to a more purist state. Paul had taken it down a route where he was trying to look after processes as well, and I don’t think the business was appreciative of that,” says Croucher.
“I think we have become an IT provider to the business – a pure-play IT department again.”
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Behind the scenes
One of the larger projects handled by Croucher and Harding is the integration with Iberia. Since the formation of the parent company International Airlines Group (IAG), Iberia and BA remain as separate entities operationally, apart from the cargo division which is a joint operation.
“We have been trying to merge BA and Iberia, so a lot of integration has been going on. Initially, we have gone for the low-hanging fruit, such as procurement savings, but slowly we are bringing systems together,” says Croucher.
One of the challenges it faces is trying to consolidate IT when the separate areas of the business are still working differently. "We are looking at how to bring the business together first – then we'll come up with an IT proposition very quickly. It is a business-led integration,” he says.
However, with British Midland (BMI), a much smaller UK-based airline acquired by BA last year, Croucher has a different story to tell about integration.
“BMI had a whole IT suite of its own, and the business case I put forward was that we would take out all the cost of BMI within a year – we bought it in April 2012, and by December we had decommissioned all of its IT,” he says.
While all the former BMI IT staff were made redundant in the exercise, all the commercial deals were either cancelled or modified and platforms were folded into BA's IT estate.
“The key there was to use BA’s processes, and that was a really successful [IT merger], carried out in a very short amount of time," says Croucher.
Mobility across the airline has become a very big thing over the past two years
Mike Croucher, British Airways
Nuggets of golden data
British Airways is also working on making the most of the customer data derived from buying behaviours to improve its service and, of course, sell more. The Know Me programme is central to this, targeting marketing and optimisation of the data BA has on passengers and customer social media information.
According to Croucher, the approach also helps in BA’s ancillary selling focus, which is how the airline can boost the amount of money it makes from a flight, either by selling another product, such as hotels or car rentals, or by upgrading.
“[This combination of data elements] on the customer means we can make much better informed decisions about how we interact with them,” he says.
“We are doing that by using big data [techniques] in the exploration of our own data sources, but also other sources of information. It is allowing us to use not only our data, but also [BA loyalty scheme] Avios. For example, if we know you are a Hilton HHonors member collecting points, we can offer you a Hilton hotel instead of a Marriott,” he adds.
“We are tailoring our campaigns with a very personalised capability. BA.com and our commercial way of selling have changed a lot – we are selling much more like a retailer than an airline now. On BA.com, rather than giving lots of flight options on the different dates, we tend to give cabin choices on the same dates with different prices, so customers can see the price of upgrading, for example.”
BA has some analytics capability in its 1,000-strong IT department, but it does not do the detailed big data processing in-house. According to Croucher, the airline is working with third parties such as Opera Solutions, a company that uses advanced science to extract predictive patterns from data and turn them into business outcomes, which are then returned to BA in an “as-a-service” fashion.
“We only get the transactional data, as opposed to dealing with the processing. We keep some of that in-house, but we are really looking for event-type outcomes, which we contract out,” he says.
“That means you can extract the data and use it. It is all down to how do you make those models – you need mathematical models and data scientists, and we can’t afford that internally. And you don’t need to employ these skills all the time, so buying a service works for us.”
In the next couple of months, BA will also be making important decisions around how it uses the data generated internally for more efficiency. To that end, it will “heavily invest” in email and collaboration platforms. This is currently being negotiated with potential partners.
“We have been a bit behind as an airline in terms of our internal use of social media, collaboration tools and email, and we will be putting that together,” he says.
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Traditionally, BA has given a lot of its outsourcing work to Indian partners such as NIIT and Tata Consultancy Services (TCS), but is changing course to be much more UK-focused.
“The UK market was selling contractors at a very high price, so the cost arbitrage went to India, but now companies are starting to realise that you can be very competitive onshore if you get the cost structures right,” says Croucher.
“What we are looking for is reinvesting some of our third-party spend into UK-based contracts. So we have gone to UK companies, more UK senior-level contractors and more local specialists with travel expertise rather than just IT – something we didn’t do anything of two years ago.”
According to Croucher, a key partner is FDM Group, which is especially appealing given the many UK graduates it employs. TCS has also been asked to use UK-based graduates rather than Indian equivalents for the BA contract.
Developing more IT experts for the future is something Croucher is passionate about. He says that in 2013, about 20 IT graduates will be recruited, as well as 20 IT apprentices who will be trained and taken through a career progression plan at the airline.
Phasing out legacy systems
At the same time as synergies between BA and Iberia are being realised, phasing out BA’s own legacy in-house systems that have been in place for over 20 years is another big area of focus.
“This is a four-year programme, and we are in the latter half now, doing all the heavy lifting, introducing a new commodity back-end and putting a new service-oriented architecture (SOA) in place,” says Croucher.
The SOA set-up, which was one of Coby’s main ambitions for BA’s IT, encompasses bespoke platforms based on Red Hat Linux and covers areas such as cargo and flight operation systems, but also unifies all the elements of customer service for a desktop and enables them for a mobile environment.
The systems that handle the aircraft’s weight and balance will be moved over first, followed by a new crew tracking system. The next cutover will be in 2014, when Croucher’s team will tackle check-in systems.
He says BA is also exploiting cloud-based testing and, given its presence on social networks and the consequent increased pressure on the company’s infrastructure, the airline is also using Amazon Web Services as a back-end provider to satisfy some of that demand.
We will be bringing testing environments into the cloud and also gain the ability to serve ourselves from it
Mike Croucher, BA
Back in 2009, when BA had to drastically reduce its IT spending due to the recession, one of the big-ticket projects that was cancelled was an enterprise resource planning (ERP) roll-out, which would have been the largest in Europe. According to Croucher, that project is still on ice.
“We are still finding it very difficult to justify a full ERP implementation – we have finance and human resource systems that work, and there is still no hard tangible business benefit for doing it as a company,” he says.
“We are looking to see if there is a need across the group – with IAG, having a group-wide ERP platform joining all parts of the company would probably be the major reason for going down that route in the future.”
While BA has been a leading light in the use of mobility for consumers – particularly with tools based on Apple’s iOS – Croucher says the key area of focus has been equipping staff with more ways to do their job on the move.
“If you look at Delta Airlines, where you can very easily change your flight on your mobile for example, we have got to go further in that regard. But our investment in the last year has been to provide our own staff with lots of mobile apps. Enabling our staff with mobile tools has become a very important part of the customer journey too,” says Croucher.
BA works with an agile mobile applications team so it can respond to staff feedback to prioritise building new features.
“As opposed to customer apps, where you have an app that does a lot of things, for staff you have a lot of small apps that solve business problems for them. Still, the delivery is quite quick and easy – the key is getting access to data and processes to put into those applications,” says Croucher.
“That has been a big breakthrough – putting a very good SOA environment in place allows the consumption of the apps very easily.”
When it comes to paying for these initiatives, he says a system has been worked out where spend does not need to come out of IT’s pot.
“One of the difficulties is always investment, and having IT money is always a problem, especially in an airline where margins are very tight and IT investment is often seen as a cost and not a value driver. But we have allowed our business colleagues to fund those initiatives,” says Croucher.
In terms of issuing IT equipment to staff, a similarly straightforward arrangement has been put in place.
“For cabin crew for example, we decided to make the issue of iPads personal – that means they can use it for personal photos, music and so on. We haven’t locked it up for company use, which means that people value the equipment more – that was a very important message to get across,” says Croucher.
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“They get the equipment issued and are expected to look after it. If there is company data on it, they sign a form that says we have the ability to remotely wipe the device when it is connected to a network if it is lost or stolen, so we can wipe personal and company data if necessary,” he says.
“It is all going very well and mobility across the airline has become a very big thing over the past two years. Most corporate processes are iPad-compatible and that has really transformed the perception of the IT department more than anything.”
The team at BA is certainly busy – and the roadmap for the next 18 months is clear:
“Within the next year and a half, we will be a lot more advanced on the SOA front and will be in exploitation mode rather than delivery. We will see a lot more news on the mobile front too,” says Croucher.
“We will be bringing testing environments into the cloud and also gain the ability to serve ourselves from it, pushing stuff from our datacentres into the cloud where it makes sense. We have a lot going on – that is just a flavour of what we are doing.”