Flying High: How NetJets' CIO Reshaped IT
To say that NetJets' clients expect a lot for their money would be an understatement. Let's just say that if you can afford to be a NetJets customer, chances are you could probably buy the company on one of your many no-limit credit cards. Okay, maybe that's a bit of an overstatement, but for a starting price of $425,625 (yes, that's six figures, not a typo), you get a 1/16 ownership in a small private Jet. Obviously, prices go way up from there. With that barrier to entry, only the wealthiest of the wealthy would even consider becoming a client.
Since the world runs on IT, it is Cullop's job to ensure the smooth operation of this pick up and delivery service on steroids. To make matters just a bit more challenging, NetJets is global; made up of six different companies and an affiliated company, Marquis Card, that sells even smaller fractions of jets than the minimum 1/16 NetJets offers. Add to this a slew of FAA regulations that equate to miles of reports being generated and processed, globe trotting owners, and you can have a lot of long days at the office. It kind of gives a whole new meaning to "5-9s".
Not only do Cullop's systems also have to be reliable and integrated internally, they have to interface with companies far, far down on the CMMI scale. For example, NetJets will get a call from an owner in SomeWhereOutThere, Montana. They want their plane to pick them up in three hours (it's 2 A.M., by the way), they need a ride to the airport and a vegan breakfast waiting for them on the plane along side a pitcher of mimosas. Well, for starters, the nearest jet-worthy airport is an hour away in Butte so the car has got to be on the way soon to make the round trip happen and the client's in Montana, not a state known for it's vegan breakfast places or all-night champaign and OJ bars. This same scenario happens anywhere in the world, all day, all night.
Still, it is NetJets' job―and therefore, IT's job―to make all of this happen. "So, we're constantly moving assets around, both the personal aircraft and everything else that goes along with that. All's you need to know is you wanted a jet at noon and we get one for you," said Cullop. "In order to pull that off ... the plan has to adjust constantly on the fly. The old systems were very siloed and therefore did not support that coordination of activity or end-to-end work flow very well."
Without getting into too much technical detail, the way Cullop's team makes this happen is through a real-time, shared services platform that relies heavily on automated decision making. Until Cullop joined the company in 2006, NetJets was hampered by the heterogeneous, siloed infrastructure that most CIOs know and love so well. Technology decisions were often made for reasons other than what would work best for the company as a whole. Cost was often the deciding factor as was time, or, more specifically, the lack of it. This led to a lot of shadow IT being purchased and a lot of human-intensive activities (think phone calls and faxes) taking place behind the scenes to get clients their planes when they wanted them and how they wanted them. In fact, without automation (and Blackberries), the company would need to add a entire floor of customer service reps just to take calls from pilots.
Starting Over with Shared Services
What Cullop did when he came on board was kill as much technology as possible without effecting services. He then embarked on finding the right mix of mainframe-based and PC-based software and platforms that everyone in all the six companies could share, with share being the key word. More shared services simplify everyone's life, especially Cullop's. Of course, all of this had to happen in real-time without anyone outside of IT noticing."The shared services goal was essentially to say in order to for us to be effective as a company, we need to have information instantaneously from all of the places that are producing information―from all of the business activities that are occurring―you need to have access to that information very quickly and, from that, we wanted to put automated decision making criteria around a lot of it."
Today, NetJets runs on UNIX for mission critical, high capacity apps and Microsoft for the desktop. They use Microsoft's Development Suite for developing in-house apps like collaboration tools for decision making. All the information ends up in an data warehouse and he uses expert systems to make automated decisions around scheduling. The front end is Windows Presentation Foundation, the mid-tier is built in Java, and everything runs on Oracle databases.
"You can really boil all this stuff down to 'What are we trying to do?'," said Cullop. "We are trying to take the defects out of the process. Any places there are slowdowns or opportunities for defects to be introduced, you're trying to remove those from that process. We got very, very good at this in manufacturing; where you have all that analysis trying to figure out how do I produce a million cans with no defects? The same principles apply across service processes as well."
This is just one part of a multi-faceted philosophy that drives his decision making. From the technologies he's going to field, to how IT is structured, to the role of the business in IT, Cullop's main goal is to enable the to business to do what it does well, while keeping those things that IT does well inside of IT. In other words, let the business make business decisions―what projects get done, what (not how) IT can do for the business, ROI determinations, financials, etc.―and let IT make IT decisions―platforms, technologies, architectures, best practices, etc.
Whatever your core business proposition―whether its goods or services―you need to look at what are the core operational processes; find the dependencies and commonalities between business units from a high-level-flow perspective; and link all of the systems and processes together so you can automate them.
"That's why I've always been a proponent of a centralized infrastructure strategy as it pertains to IT," said Cullop. "There is the tactically 'What do you do with the technology pieces?' but first you've got get buy-in from the business" on the benefits of having a common or shared platform. "You determine business what we do, we determine how it integrates and what it runs on on."
Since Cullop took over as CIO, the company has grown 50% but they've also cut power usage by 50%. What used to be 500 servers are now 27 rack-cooled IBM blades. This is part of NetJets' Green initiative―which Cullop also must take into account when making technology choices―that stretches across the company from fuel consumption to IT. (They are funding research at Princeton to develop a cleaner burning jet fuel, for example.)
They've also gone from 18 UNIX boxes down to five AIX boxes that are bigger and draw only a little more power than the old UNIX big iron, but are more efficient. They've also gone from five storage area network (SAN) units to one. They've improved performance while at the same time cutting costs. To date, there has been a 200% return on these investments in real dollars, not expected ROI.
Taking on Inertia
Since there are not a lot of software vendors writing apps for the aviation industry, another part of Cullop's job is to ride herd over the development teams. To help save money, Cullop works with Indian outsources. This saves anywhere from 15%-25% on overall development costs. More important than cost savings, however, has been getting development and operations to work together.
When Cullop arrived on scene, development developed (12 releases a year without QA testing) and ops basically did their best to hold everything together. There was little communication between the two groups nor were there any incentives for this to change."It was essentially, to me, like a large application development shop that had infrastructure and support as an after thought or a necessary component to run the apps they were building. To me, when you are building a commercial grade system you architect your system in advance with all of those things in mind." To do this, NetJets' development relies on the software development lifecycle (SDLC).
"Getting the organization set up to where they can succeed is always the first thing I look at when I join any organization. Because you're not going to get success in changing any of those underlying technology problems until you get alignment from the people and you get the organization working together as a group."
To do this (perhaps his most important accomplishment since taking over as CIO), Cullop changed the way everyone in IT got paid. As they say, "Money talks and bullshit walks". Instead of development getting a bonus for meeting their goals and ops getting a bonus for meeting their's, the entire IT organization now needs to meet its goals. But, this only happens if the business as a whole meets its goals. This puts everyone in the same boat.
On top of this, Cullop sends out surveys three times per year to all 8,000 employees. If these do not come back satisfactory, it effects the bonuses. Suffice to say, at an average performance rating of 4.55 out of 5 means 2008's bonuses were paid. "Either we all succeed together or we all fail together. It's never about, 'Well, boss, I did my part, those guys let you down.' The business doesn't care about that, they need IT to run so the business can function."
But, as most managers know, money only goes so far as a motivator. Cullop also holds monthly, all-hands meetings where he calls out employees and departments that are performing well, has guest speakers come in from different areas of the business to explain what they do, and uses the time to reinforce IT mission: supporting the business. If the business succeeds, everyone succeeds. If the business fails, IT fails; regardless of how well you did you job.
This means the CIO's job has to be about getting IT and the business seeing eye to eye and taking responsibility for what they each bring to the table. IT cannot solve business problems without direction, feedback and input form the business. Likewise, the business cannot expect IT to just deliver what it wants without taking a hard look at what is truly a must-have, a nice-to-have and a true need.
"What you want to be able to do is say how can I take what IT can do and leverage that for the things I want to do going forward," said Cullop. "IT, to me, ultimately is just a tool to drive more value into your business. Ultimately, IT is made up of multiple skills sets and different jobs that all have to come together to deliver a great product to the business."