UK business class airline Silverjet introduced a second route to Dubai City this week, nine months after becoming operational with flights to New York. The airline attributes its rapid growth in large part to its IT outsourcing strategy.
By outsourcing hosting for the airline's website, reservation data system, internet booking engine, automatic call distribution, and departure control system, Silverjet was able to provide business services within four months for less than £100,000.
"As an airline, our primary focus is on filling seats, not developing computer systems and software that can be quickly and cost-effectively sourced from outside suppliers," said George Henderson, IT director at Silverjet.
Silverjet's approach to IT outsourcing is becoming increasingly common among start-ups, said Claudio Da Rold, vice-president and distinguished analyst at Gartner.
The only key function Henderson has chosen to keep in-house is the contact centre, to keep tight control over its quality of service.
Only Silverjet staff come into contact with customers, but they are connected to sophisticated multichannel contact management and call routing systems, which are hosted off-site.
Speed to market and cost were key considerations for Henderson's IT planning to support the airline, but business continuity was another important factor that outsourcing automatically took care of as part of the services.
Outsourcing key IT functions, such as the website, application development and customisation, allowed Silverjet to keep its full-time IT department to a minimum.
"We have been able to defer upfront costs and pay only for the work we need done. Keeping the IT function small has enabled it to be agile and respond quickly to business needs by buying in the necessary expertise to deliver differentiation through innovation quickly when required," said Henderson.
Da Rold said that, after several years of scepticism about the services model following the burst of the dotcom bubble, start-ups are turning to this sort of "multi-sourcing" model to decrease capital expenditure and time to market, particularly in the Asia-Pacific region.
Gartner has also found that companies are attracted to this model of outsourcing services from a risk management point of view.
"Buying services on a pay-per-use basis limits risk because, unlike traditional outsourcing, companies do no have to invest in hardware, licences and services before moving management of the system outside," said Da Rold.
Although this model of outsourcing is mainly associated with start-ups, Gartner is also seeing more established companies following the trend of using standard business and IT services delivered to multiple clients to lower cost and improve speed to market.
"Gartner believes this trend will increase, driven by the fact that competing businesses continually require IT to be better, faster and cheaper, which can not be done with the traditional approach," said Da Rold.