Jetstar CIO: Downtime risk saves money
Jetstar's "doing it for a dollar less" mentality has meant that the airline has accepted the risk that it might not be up all the time in exchange for cheaper services, CIO Stephen Tame said today.
(Jetstar image by Chalky Lives, CC2.0)
"If I'm willing to take a 2.5 per cent business risk then I don't necessarily need to have expensive network links," Tame said, speaking at an Accenture CIO round-table today.
"Jetstar is a 97.5 per cent airline. That doesn't mean that we don't have 99.9 per cent systems. We do. What it means though is conceptually that from an IT point of view and a business point of view, we're willing to take a balanced and measured business risk in order to get a better outcome."
Some companies made the business decision that they needed to be up all the time, Tame said, but they had to understand that it meant extra costs.
"I think a lot of IT shops haven't really thought about this," Grant Barker, head of IT strategy and transformation for Accenture in SE Asia, Australia and Korea said at the round-table. "Its almost risk is to be avoided rather than something to be managed."
Taking the Jetstar view, however, and knowing that sometimes processes might fall flat meant that CIOs could make decisions technology chiefs might shy away from, Tame said. For example, providing connectivity through what he called "mum and dad broadband" to some airports.
"You might say hang on. Broadband isn't business strength. It's not business reliable. Well I've lost one day in two years — it isn't bad and it's very cost effective," he said.
When systems do go down, going manual wasn't the end of the world, according to Tame. "It hurts but you can do it," he said. "There is absolutely nothing wrong these days with the pen."
Expensive networks had let Tame down in the past. When the airline was expanding overseas to airports such as Bangkok, Phuket and Honolulu, he spent money on networks that went dead when an earthquake took out the undersea cables. The only airport to remain online was in Vietnam where one of the ground staff plugged the portable check-in counter into a local internet connection.
"It actually changed a lot of thinking about what we did," Tame said.
It was not only networking where Jetstar saved money by taking managed risks. The Jetstar CIO has allowed his staff administration rights on their machines to save IT maintenance time. If they break something, a minimal amount of time is spent trying to fix it before the standard settings are restored. If the hardware breaks, it's thrown away.
Tame has developed a standard operating environment on a 16GB SD card so that all users have to do is stick it into their PC and a virtual image will run on the machine, no matter what kind. He has been trialling it in the engineering department of the airline.
His wish is that in two years, a condition of Jetstar employment will be owning a laptop on which the virtual image can run. It wouldn't matter which machine or operating environment, which would then give Gen Y their choice of hardware.
Tame's already taken all the desktops out of airports, instead using thin client. It has reduced his maintenance costs by 40 per cent, and local server infrastructure costs by 100 per cent and management costs by 60 per cent at airports. He planned to tackle the hundreds of desktops at the head office next.
The CIO also doesn't manage any IT overseas. All the applications are run in Australia and accessed over the network. Latency has been a concern, which Tame is tackling by putting in a 100MB gigabit Ethernet link to Singapore with Telstra. Melbourne and Sydney also has one with Nextgen Networks.
Tame's next project is putting in low cost netbooks at airports at the gate. He planned to buy 40 from Toshiba or a Malaysian company to spread over the 21-22 airports, which would be coming online in the next three months, around the same time he expected to deliver the SMS boarding pass.
"It's a bit scary," he admitted, speaking about the boarding pass, because of how new the concept was. The idea was to have a code that could be read by a scanner from any mobile phone at any angle. The hope has been to improve the number of people who check in online so that people would have the option to give all the necessary details when they book their flight and are automatically checked in 48 hours before they travel, and receiving a boarding pass via email.
Tame hoped to see the online check-in rate rise from 25 per cent to 80 or 90 per cent. To show the benefits of this, he pointed out that a normal check in could take one minute and 20 seconds at the airline counter, but that a simple bag drop could be done in 27 seconds. If the passenger tagged their own bag, it would only take 15 seconds at the counter.