Airport operator BAA has undergone a massive IT transformation in its Heathrow operations, including a major outsourcing deal and large-scale software roll-outs, leading to IT cost savings of more than £100m.
In this CW500 video, BAA CIO Philip Langsdale talks to Computer Weekly editor in chief Bryan Glick about his team’s achievements and the challenges of the transformation project at one of the UK’s most important organisations.
Read the full transcript from this video below:
CW500: BAA CIO Philip Langsdale
Bryan Glick: Hello. Welcome to the Computer Weekly 500 Club. My name is Bryan Glick. I am the Editor-in-Chief of Computer Weekly. I am here today to talk to our guest speaker at this month's CW 500 Club, who is Philip Langsdale. Philip is the Chief Information officer of BAA, the airport operator. He is talking to our audience and IT leaders about the major IT transformation program that he has been leading at BAA. Philip, thank you ever so much for coming to join us at CW 500 tonight.
Philip Langdale: It is my pleasure.
Bryan Glick: A huge project that you have been involved in, clearly. I am sure we could talk for a very long time about it. What were the key challenges that you faced, that led to this project coming about?
Philip Langdale: I think that there were probably three. First of all one was really getting an understanding of how we needed to use technology to improve the operation of our airports, and particularly Heathrow; Heathrow is our biggest airport and the one we focus on. The second was some very significant challenges in terms of value. One, I had to get a100 million pound savings in the first four years, and at the same time we had to improve service quality significantly. Thirdly was working out what the right size and shape the IT function should be -- what we should be in-sourcing and outsourcing, and how best to structure those things.
Bryan Glick: Three huge challenges for any organization, let alone for the size of BAA. Where do you start? How do you about tackling some of those?
Philip Langdale: The first one, I think, was an absolute focus, and this is perhaps a core value of mine. The role of the CIO is to focus on the delivering value to the key stakeholders. We spent a lot of time talking to our stakeholders. The stakeholders are obviously internal stakeholders, our teams, passengers in the airports, the airlines, our shareholders, the regulators, and so on, to try to get a good handle on what ‘good’ looked like, and what we were focused on. After that came to some real clear priorities for investment in improving the passenger experience at Heathrow, making Heathrow more resilient, and improving some pretty old and tired back office systems. That in itself, by focusing on how do we really deliver value to our stakeholders drove our priorities.
The cost control model was just straightforward, very hard grind. Really getting on top of the cost structure and looking at the ingredients in that. Why did we have 500 suppliers? Why do we need 500? How do we rationalize that? How do we simplify the estate we got? Then very detailed and methodical crunching through the numbers, looking at choices and consequences. Finally, the third was looking at the shape and size of the IT function. There have been some initial attempts at outsourcing had been made before I was there, but I felt until we really understood the strategy and the cost structure, it would be premature to outsource. We put that, initially, on hold.
We then really looked at what the right in-house functions we wanted, and what could be outsourced, and got a very clear board mandate for that. We then went through a very tough, very well-planned negotiation procurement strategy, which ended up with us selecting Cap Gemini. The Cap Gemini contract is interesting -- it is very output based; it is not exclusive. It is very broad in scope, and it is very focused on getting Cap to focus on the needs of Heathrow as an airport, looking how they can improve Heathrow's performance.
Bryan Glick: Where are you now on that journey on the program? Is it nearing completion?
Philip Langdale: I do not think it ever nears completion, and I do not think that you ever get there. We have delivered some good systems. We have just replaced our very tired systems with a new version of Oracle. We are putting in systems to support what we call the Real Time Heathrow, which is a very important concept for us. We have delivered 120 million pounds in cost savings. We have done, so far so good, but we have a lot to do.
Part of the challenge of looking at IT in Heathrow, is we have to start working on the next, what is called quinquenium, a 5 year lump, and we are actually working with the airlines to work out what the priorities for investment should be in the next quinquenium, taking us up to 2018. We have some enormous projects ahead of us -- we are investing over 2 billion pounds in the new Terminal 2, and around 14% of that will be IT infrastructure, new systems, new technology for T2, and we are looking at what we can we use, what can we innovate, what could we be doing to make the passenger experience better in Terminal 2, to make the airlines more reliable and so on. There is a lot of activity at the moment on forward thinking.
Bryan Glick: You have some fantastic achievements there, a big project as you outlined. If there was one learning point, one lesson learned that you could take away from that, that you would pass on to your fellow CIOs, what might that be?
Philip Langdale: Focus on living-value to your stakeholders. I think really getting inside the skulls of the key internal and external stakeholders, what they want and making sure that you meet them regularly, but formally and informally, and deliver value.
Bryan Glick: Great advice and some fantastic achievements, as well.
Philip Langdale: Thank you very much.
Bryan Glick: Philip Langdale, from BAA, thank you for coming, on and joining us on CW 500 tonight. Very much appreciated.
Philip Langdale: Thank you very much for your time.
Bryan Glick: That is all we have time for now. Thank you very much for watching this video. We will be back with more CW 500 videos in the future. Take a look some of the other videos talking to CIOs that have been talking to CW 500 over the recent months, as well, at our website ComputerWeekly.com. Thank you for watching. Bye.