BA slashes paper trail in pursuit of £650m savings

£30m IT investment in business-to-employee programme aims to put beleaguered UK airline back on track

£30m IT investment in business-to-employee programme aims to put beleaguered UK airline back on track

British Airways (BA) has launched an ambitious business-to-employee (B2E) programme that it hopes will generate savings of £75m a year.

Following the downturn in airline traffic after last year's terrorist attacks in the US, BA is moving its internal processes to Web-based systems to try to stem the flow of losses (£200m so far) and counter the effects of losing 13,000 jobs.

The three-year, £30m programme will replace phone- and paper-based processes with employee portals, self-service applications and automated helpdesks.

The project is part of a wider initiative to cut costs by £650m a year and aims to increase efficiency and reduce the need for support staff, said IT architecture director Phil Matthews.

B2E systems have been relatively unaffected by the slowdown in IT spending because they offer fast return on investment, said Mike Davis, a senior analyst with Butler Group.

However, early IT involvement is essential to deliver long-term cost savings. "It is vital to spend time thinking about architecture before jumping in. The really big benefit of B2E is that it lets you standardise on a single directory and simplify administration," Davis said.

BA spent 18 months building a new infrastructure to support the e-working programme, including a centralised Netscape directory and IP network.

The airline has also reorganised its IT department into a centrally-managed pool overseen by the design authority - a group of senior managers responsible for aligning business and IT strategies.

The 2,200 internal IT staff are rotated between departments while a small group of senior architects oversee each project. The change allowed the airline to continue the project despite axing all 980 IT contractors earlier this year.

The first self-service applications have already saved BA £8m, Matthews said, by allowing workers to file expenses, travel reports and holiday requests online.

The airline is currently rolling out Oracle for self-service HR, while Ariba e-procurement software will create a single interface for all internal purchasing.

Many of these tasks were previously handled by scheduling centres, where telephone operators recorded requests on paper forms. The automation has eliminated 1,200 paper forms, and allowed the number of telephone helpdesks to be dramatically reduced.

The corporate intranet was completely rewritten to make these applications available over the Internet to BA's 18,000 mobile workers. From next month, senior cabin crew will also be issued with Compaq iPaq handhelds providing access to e-mail, timetables and electronic forms.

BA is also testing a business intelligence portal which will provide staff with access to the company's datawarehouses through its intranet. If the trial is successful it will be rolled out to 5,000 staff over the next six months.

Despite its complexity, the programme has had relatively few technical glitches. "We took 18 months to get the network performance up to scratch but the main challenges are cultural," said Matthews.

"Persuading 55,000 people to abandon the old way of doing things is something else entirely."

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