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Finnair selects IBM for cloud transformation

Finnish airline outsources IT transformation to IBM as it moves to introduce digital services to customers

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Finland’s national airline, Finnair, has signed a five-and-a-half-year services deal with IBM to transform its technology infrastructure into a hybrid cloud platform.

The agreement also includes development of new digital services, such as mobile on-flight services.

“The basic element [in the agreement] is our datacentre services, which we want to consolidate into one environment and under one provider,” said Kari Saarikoski, CIO at Finnair. “At the same time, we want to start to take these services into the cloud to gain flexibility, cost-efficiency and the other goodies the cloud promises. We’ll start with less critical services and then move on to the more critical ones.”

At the core of this transformation is the Finnair Cloud Platform, which will be run by IBM and will enable the integration of different operational and commercial services into single environment. This is a new step for Finnair which, while favouring the software-as-a-service model, has previously used the cloud sparingly.

The agreement also includes application management and development services, as well as a new services governance model. IBM will also take on responsibility for managing Finnair’s IT provider network.

“This will take some time, but is one of our goals,” Saarikoski said. “During the past years we have taken on many new applications and providers and it takes a lot of our time to manage them all...Besides looking for cost, consolidation and management benefits, we want to move the focus of our own people more towards digitalisation, development and innovation.”

Finnair’s employees will also trial IBM’s Watson Explorer capabilities and use its cognitive skills to locate information and respond to customer queries more efficiently.

While Saarikoski notes other vendors were considered, Finnair’s long term collaboration with IBM was a factor in its selection. The airline outsourced its basic IT services and application management to IBM in 2002.

Read more about outsourcing in the Nordics

A major driver for Finnair’s move towards the hybrid cloud is its need to boost digitalisation and customer experience in the highly competitive and cost-focused airline market. 

Since launching its mobile app last year, the airline’s development focus has been on new consumer-facing mobile and in-flight services. These will now be progressed further with its upcoming cloud capabilities in collaboration with IBM and other partners.

Finnair will also join the growing number of airlines that offer in-flight connectivity and plans are in place to introduce Wi-Fi to its entire Airbus fleet by the end of 2016. The roll-out will start with its new Airbus A350 airliners, which will have built-in wireless networks.

“This opens up new opportunities for services development – it’s a new platform,” said Saarikoski. “Based on what we have talked about with our colleagues, everybody is focused on the same themes: customer experience and how to increase the sales of ancillary services to our customers.

Finnair is Finland's largest airline, carrying more than nine million passengers a year. The financial terms of its services deal with IBM were not disclosed.

 

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