After an uncertain time earlier this decade, the role of Information Technology in the boardroom has moved to centre stage as a key enabler of business transformation and differentiation, says Paul Coby, SITA board chairman and British Airways chief information officer
SITA and Airline Business have been running the Airline IT Summit for seven years now. For the industry, these have been seven tumultuous years, which have also brought about a sea change in how airline IT is viewed in airline boardrooms.
There have been false starts over this period and the preceding years the hollow promises of the dotcom boom and the costly and disturbing scare-mongering of Y2K, for instance. Then we had 9/11. With no money to invest, IT hit the doldrums, with its reputation shaken, and its place on the corporate agenda uncertain.
But the industry has moved on, and the reason air transport has coped with the often unpredictable winds of change is, to a remarkable extent, because of smart investment in technology by smart chief information officers and directors of IT. Look at the changes during this period - online selling, e-tickets, online check-in and systems supporting almost all airline processes.
Airline IT is not about the 2% it represents of the corporate budget. IT should be about 100% of your airline's cost base and growing 100% of your airline's revenues. Nearly everyone in the industry now recognises that IT helps cut costs. We also know that IT can generate new revenues. This is hardly news! Today, there is no doubt IT is firmly back on the agenda of all progressive airlines.
More than ever, IT is not a luxury but an online necessity. IT is not a commodity, it is a differentiator. IT is how airlines and airports do business nowadays. This is why we themed this summer's SITA and Airline Business IT Summit "IT - Enabling the Air Transport Industry".
This theme is particularly relevant to SITA, whose entire reason for being and entire energy is focused on working with the industry to provide that enabling IT.
This is important. Today many of SITA's competitors are owned by private equity. We need to think what that means if private equity decides to take its profit out of the industry. Now, as they say, some of my best friends work in private equity companies and let me be quite clear, private equity has achieved some remarkable turnarounds and transformations. But we should consider what margins are being made and where these margins end up. Will they be reinvested in the industry or will they flow out of our industry?
SITA is different. SITA is the air transport industry's unique supplier because the industry owns it. Through the SITA board, SITA's customers help to determine its strategy, portfolio, services and community focus. The value that SITA creates stays in the air transport industry. SITA takes an industry and a community view and is able to take the longer-term view of investment.
So it is against the industry background - in which IT is today's key enabler of change - that SITA is uniquely and strategically positioned. Archimedes said: "Bring me a lever, give me a place to stand, and I will move the world." SITA is the air transport industry's lever, our lever - we own it - and with it we can move the entire industry.
IT is inextricably linked with the business and strategy of any airline. IT is the key enabler, no matter what business model is adopted: be it low-cost carrier, full-service airline or hybrid, whether based in Europe or the Asia Pacific region, whether large or small, local or global. The presentations we heard at the Airline Summit prove this. IT is not just about the cogs or bits and bytes that keep our businesses moving any more. Indeed I would claim IT is now more than the enabler. Airlines and airports are now IT dependent.
I would also say, you ain't seen nothing yet. This was just IT revolution number 1, when IT and the airline industry connected the world. One billion people are now online, 50-60% of the population in UK, parts of Europe and the USA. One billion more will be online soon, and many of them will be in Asia. So IT revolution number 2 - Web 2.0 - is upon us. Customers and employees are now online and want to be IT enabled all the time, everywhere, and seen as individuals. This is going to produce fundamental social, economic and global change and the IT-centred airline will be at the heart of it.
Source: Airline Business
