Title: A Tale of Two Airlines in the Information Age
1A Tale of Two Airlines in the Information Age
- Interorganizational IS, databases, and global
interconnectivity together creates platforms for
higher service levels. - What assumptions did Prof. McPherson make
regarding information technology support at the
London-based airlines? - Do you believe they are realistic assumptions for
the technology environment of the mid-1990s - What factors do you think lead to the difference
between Prof. McPhersons expectations and the
reality of the situation? - What alternative approaches could have been taken
to resolve the situation? - What were the differences between the
Atlanta-based and the London airlines approach? - In approaching the problem, did the Atlanta-based
airline have any special advantages? - What advice would you give the London-based
airlines management?
2A Tale of Two Airlines in the Information Age
- What did Prof. McPherson assume the British
Airway's gate agent would know about him and what
are the enabling technologies that would be
required to execute them?
3A Tale of Two Airlines in the Information Age
- What are the possible service alternatives for
British Airways? - Hold the airplane for Prof. McPherson
- Hold the plane at the gate until the scheduled
departure time - Send an agent to meet McPherson at his arrival
gate and attempt to get him to the plane. - Have an agent at the London-based Airways
departure gate briefed on McPhersons situation
and action alternative in hand. - we held the plane until last moment. We have
reserved a seat for you on flight number and is
there anyone in London we can call to notify them
of your delay
4A Tale of Two Airlines in the Information Age
- Delta (Atlanta-based airline) situation?
- Different tradeoffs are possible in bad weather.
- They held the plane for 15 minutes to pick up an
extra 8 known connecting passengers. - There information systems had identified the 8,
the time they needed to connect, plus analyzed
the tailwind data - A clearly empowered gate staff and crew existed.
Information, guidelines and training had allowed
a partial transfer of operational decision-making
to the customer interface - It is easier to do this at the hub than in the
outlying regions. Service failures tend to take
place at a distance.
5A Tale of Two Airlines in the Information Age
- Reaction from Chairman of British Airways in
London - He had the head of British Airways in USA and his
marketing manager visit Prof. McPherson three
weeks later. - What do you think will be the focus of the
discussion? - Inflexibility of the British Airways information
architecture - Difficulties of getting London-based files and
other airline data to the gate agent - Conflict between operational excellence and now
the additional need for high touch customer
service - Facilitated by flexible use of the new
technologies
6A Tale of Two Airlines in the Information Age
- The bottom line of this case is that in the
information age, the expectation of what
constitute good service have increased
dramatically. Making it happen seamlessly
requires the integration of large amount of
different technologies and databases being passed
across organizations in a seamless fashion. - The new technologies require fundamental changes
in training and attitudes. One airline had done
it and the other had experienced a collapse in
outlying region. - In the today's networked economy business
environment distance is no longer an excuse for
inferior customer services - There has been an increased in global customer
and global business customers - Customers are highly knowledgeable and therefore
the level of expecting has increased
significantly. - Ability to use IT appropriately (including
empowerment) will continue to be a source of
completive advantage.
7Targeting IT-Based Investment
High
Increasing operating performance
Catch up
Manufacturing gap versus industry leader
Increase flexibility, responsiveness Differentiat
e product and services
Maintain Advantage
Low
Low
High
Services / Marketing gap versus industry leader
Different competitive investment strategies
facing industry players as they consider there
position versus industry leaders.
8Targeting IT-Based Investment
- Type A
- Used IT to transform marketing and production and
the organizational design and management process
required to support IT-based investment - Strong leadership
- Senior business leaders assume responsibility for
planning and executing IT strategy for the firm - IT is defined as a core capability of the firm.
x
9Targeting IT-Based Investment
x
- Type B
- Used IT to support manufacturing and logistics
- IT investment are targeted towards streamlining,
integrating, and coordinating production and
distribution while controlling costs and
improving quality - Strong relationship between IT and senior
management must be in place to support the
requirement for interfunctional integration.
10Targeting IT-Based Investment
- Type C
- The challenge to better different their products
and services to meet the needs of ever
more-focused markets. - The ability to capture detailed data on
individual buyer preferences, competitor prices,
and product moves is crucial. - Strong IT and general management links are needed
to assure success.
x
11Targeting IT-Based Investment
x
- Type D
- Deed catch up situation, outmaneuvered by
competitors on both sides. - Comprehensive, coordinated efforts are needed to
achieve a defensible competitive position. - Long lead time and high capital investment costs
often create a situation so serious that the
survival of the corporation is at stake. - Massive IT investment needed to maintain
competitive position within the industry served
to weed out competitors that failed to
recognize early, the opportunities that IT would
provide for integrating operations, identifying
and meeting customer expectations, and
differentiating products and services. (e.g.
People express)
12Categories of Strategic Relevance and Impact
A contingency appropriate to IT management.
High
Factory
Strategic
Totally depending on it
IT are important but they are not fundamental to
the firms ability to compete.
Strategic Impact of existing IT system
Support
Turnaround
Strategic Impact of IT on operations and
future strategy is low.
Not absolutely depending on totally
uninterrupted, fast response-time.
Low
Low
High
Strategic Impact of IT applications under
development
13Categories of Strategic Relevance and Impact
High
Factory
Strategic impact of existing operating systems
Strategic
Turnaround
Support
Low
High
Low
Strategic impact of application development
portfolio
14Sourcing Policies for the IT Value Chain
Decision Criteria Pressure to
Make/Own Pressure to Buy