British Airways: A Case Study in Lean' IT
A process is a process is a process, whether it is the manufacturing floor or airline passenger check-in. And what worked for manufacturing in
So, what is so special about this? Actually, nothing. That’s why it’s so remarkable. It’s been done before but it works—everyone can do this.
John Mornamente, joined British Airways in 2000 and now heads IT and Business Change functions within BA’s Information Management Organization. He helped CIO Paul Cody and BA management apply Lean Manufacturing principles to a program they called “Customer Enabled BA”. In addition to using Lean to identify and eliminate wasted steps in servicing customers, Paul and John drove the introduction of a set of over arching principles they call 3PI—Proposition (or value), Process, People, and finally the Single IT Solution (SITS).
As the project proceeded, the compelling “customer proposition” helped the airline evaluate and combine 3000 fare rules down to three fare conditions. The Process rule helped them design standard processes that whittled 40 ways to do something down to a list of five options from a drop-down list. And the People dimension of the project drove the effort to help the customer “get it right the first time”. This enabled better customer service and satisfaction. Finally, the SITS approach meant that call center staff, for example, would use the same tools as the customer.
According to John, the 3PI model means BA’s IT is only 25% of an initiative, with the other aspects (Proposition, Process, People) receiving focused business attention and transformational goals not just incremental improvements. For example, they set targets to achieve 100% e-ticket and 100% barcode boarding passes, and for the Terminal 5 launch, 80% self-service check-in—targets they are well on the way to achieving or exceeding.
John’s team today offers a number of shared business improvement capabilities to the rest of BA—process analysts, center of excellence championship for Lean process approaches, operations research experts to help with optimization of airport or airplane capacity, and business intelligence analysts. And because of the success of customer self service, his team also drives the self service employee process adoption (like electronic pay stubs and company wide use of an employee portal). John envisions a future at BA where all shared services are accessed through self service mechanisms.
One company’s approach to getting more value from its IT expenditure is rich with material for all IT organizations, no matter where they are in their evolution or maturity. Here are a few:
There are no purely IT projects and metrics—only business. The transformational targets at BA should remind anyone who is pushing an IT initiative like design SOA architecture or implement SaaS or drive Web 2.0 deployment to halt until the clear business benefit is not only identified by IT but sold and committed to by business execs. In fact, all of John’s initiatives have business metrics; a small step on the evolutionary path to business technology, what Forrester Research initially coined as BT.
Business execs must commit to proposition, process, and people change – along with technology initiatives. Related to the first point, once you have your business benefits identified, halt until peers in the business have committed to a) proving the proposed benefits; b) changing their processes, however painfully, to realize them, and c) championing the effort to the people implicated, and dealing with the people changes that result from the effort.
All processes can benefit from a search for wasted steps and smoother flow. Sending out process analyst sleuths trained in Lean tools and techniques to observe processes (especially customer service or accounting) can reveal significant, needed changes. Sometimes without touching a line of software. Perhaps one group starts using tools initially designed for another, paper flow steps are eliminated or just plain redundant steps slashed.
Benchmark the competition. Although John did not comment on what the other airlines were doing during the same period, imagine if BA didn’t implement self service check in as part of its Terminal 5 effort at Heathrow?
If your firm’s progress at any specific process can be charted and compared to a rival, and no executive is demanding that your company match or catch them, speak now or watch the stock slide. Sell the project to senior execs (as happened at BA with the Customer Enabled BA initiative following a near melt down of the airline after 9/11).
Use the business savings to fund and find more business savings. John originally proposed achieving a �100 million/year savings within two years, which he delivered and exceeded. It seems simple to then use those savings to self-fund strategic initiatives to find more savings.
Now an independent consultant, Laurie M. Orlov is a long time practitioner and industry observer. She has over 33 years of IT experience, the last 9 years as a VP and principal analyst, research director and consultant at Forrester Research. Prior to joining Forrester, Laurie held senior IT management positions in various high-tech companies, most recently as a CIO, driving the implementation of eCommerce-based ERP solutions for a mid-market PC reseller.