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                                                                                     -Paul Coby, CIO, British Airways

Coby joined the Civil Services in 1978 and had a career in several Government Departments-including Transport and Environment.  He was Principal Private Secretary to the Secretary of State for Transport during the 1990s, in charge of a £2.2 bn budget that included setting up the widening of the world's busiest ring road, the M25. Although a policy civil servant by background, he has always been passionate about the effective use of technology. Paul Coby joined British Airways in 1997, where he developed OneWorld Alliances-the Airline's alliance relationships-and became general manager, responsible for Information Management and Business Development. There he devised and negotiated the industry-shaping move of BA from its own reservations system to "Amadeus".  In September 2001 he joined Rod Eddington's (then CEO) Leadership Team as the CIO, responsible for the operation and development of all British Airways Group systems.  He has established a Business Transformation team within the IT Department to bridge the gap between technology and business delivery.  Over the last two years he has reduced the cost of running BA's IT operation by one third.

In this exclusive interview to Minu Sirsalewala of Dataquest, Paul Coby talks in depth about his strategies for the company and the resurgence in India operations

How did technology rescue BA from its financial storm?
Legacy was us; our industry has the most horrible package. The airline industry has processes invented and designed in the 1950s. Like the cardboard pieces invented for the Titanic. These tickets were on cardboards and were collected from the passenger and sent to reconcile house. These were clearance houses that would collect, collate, and then dispense the information.

In the past years, we have undertaken the most far-reaching technology initiative among any large airline. We completely directed our efforts in cleaning the package. We left the back office to the outsourcing partners and concentrated on business processes. Our business had become too complex and too expensive to operate. So we used technology to automate processes, such as flexible ticketing, flying into accessible airports, and having back-up aircrafts in case of a problem.

Technology is a lever that allows us to be just as price competitive as the low-frill carriers, and to meet the demands of our customers-and still make money.

Technology allowed us to directly take on no frills carriers and compete with them without compensating on quality; not be termed as another no frill airway, and not become a cheap airline.

An example of this would be calendar led selling of tickets. It is a fancy piece of inventory management. The system handles 38 million customers a year.

We completely streamlined the carrier's internal networks, eliminating redundant and inefficient systems, and recreated its ticket distribution and customer service operations.

What has been your strategy?
Our CEO believes as much as I do that the smart use of technology is fundamental to BA.

Concentrate on what will make a difference and concentrate on cost.

Use technology to sell (example, online selling). Web creation is an important aspect in our services and we have increased the capacity and capability intensively. This needs to be communicated to the market which we did through the smart use of technology.

We at BA do not have much to spend at our disposal. Our IT budget is much lower compared to other players. We have around £93 mn to spend and have to be very cautious about the way we spend it.

And the budget is expected to increase only modestly.

One of the really strategic choices you have is 'Where am I going to invest the IT budget?' In BA we spend about two per cent of our overall turnover on running the IT operation and a much smaller amount than that on the IT investment.

Overall strategy is to simplify and automate BA's business processes to fundamentally change the way the airline interacts with its customers and employees.

How has this strategy and initiatives worked?
We've put our customers in charge of their travel arrangements completely-and we've made our operations transparent to the customer.

Part of this is the 'customer-enabled BA' program. This resulted in discontinuation of ba.com (a URL owned by Bell Atlantic) and an increase in online bookings, e-ticketing and self-service check-ins.

Passengers can now use the Web for everything that used to be done at airport check-in desks. Also if you want to change your meal, seat, upgrade, register for advance passport info, do executive club transactions, you can do all of that online.

For example when you book a flight on the Web, we'll show you 7 days, plus or minus the day you want to fly, and color code which are the cheapest and which are the most expensive flights at various times of the day.

Sixty percent of our ticket sales for U.K. and point-to-point flights are online.

A third of our customers are using our online services before they get to the airport. We've saved our business about $180 million over the past two years from this. And the savings from the internal network activities are on target to be about $95 million. The site has served as many as 750,000 passengers and has gone up to nearly one booking taking place every second.

Anyone doing business online has to be able to interact with this world and BA.com has been able to exploit these new opportunities.

With stiff market competition especially from the no-frills airlines which had embraced the web as a low-cost way of doing business, meant more innovation for BA for its survival.

How is a typical week for you?
I generally split the week in 5 tasks where 20% of the time is spent managing the IT department, 20% of the time on airline business like spending time with the Capital investment team, strategy team to chalk a vision and growth plans. An awful lot of my time is spent with suppliers, especially if one needs to sort out some difficult relations. As suppliers and vendors play a critical role good deal of time is spent strengthening and sorting the relationship. Other 20% of the time is spent on managing the projects both new and old. For example lot of my current time is spent on designing and building the terminal 5 which we now have at Heathrow the busiest airport.

I like to spend time on communicating with people. We have a program where every employee is made to participate in cross department meetings. Every month we have a big issues day. You've really got to spend at least 20 per cent of your time – one day in five – on communications or listening or some form of interaction with people.

We try and mix people and one of the leadership team comes down to talk to the group. At the end of the week or month I like to map and check if I have got most of my activities right.

There has been a significant resurgence in your India operations, how does this fit in with your IT plans?
India was British Airways' second biggest long-haul market after North America, and the third biggest after the UK and the US. We have increased our business presence in the country and have focused on cities like Bangalore, Chennai and few other Metros. This explains BA's ongoing £2 mn country campaign launched after the campaigns in the UK and the US.

We will see flights increase 30-50% within two-three years leading to a tripling of operations in the country. With 60 jobs added recently, BA now has a 600-strong team in the country. We want to provide facilities to India as we do anywhere else in the world. India is on par with all our other locations.

We have introduced online printing of boarding pass at Bangalore and Chennai, and would very soon be activating it at another 3 cities. Our Indian frequent flier customers are extremely thrilled and happy about this facility. There has been no added load on the network and the new locations and services have been integrated seamlessly.

What are your mantras to be successful?
Transformation Targets, Golden Rules, and Good Governance.
You have to aim or 'over aim' to be close to reality. When we aimed at 100% e-ticketing for passengers we are at 83% today and will be at 90% in another 6 months. Through e-ticketing we will not only be streamlining the ticketing process but also save cost and stop shuffling paper. 80% of our club fliers are now on line. We are gradually phasing out our numerous fare categories, which were causing confusion and now have best fares available and other customized services for our frequent flier members. We had fares like World Cup fare, Dogs in the Boxes fare.

The Golden rule is 'build every system for end customer use'. We usually build for our departments and for their ease of use, but if we target the end user, the department by default benefits.

For example, we have baggage access fare built for self-service. This helps the passenger significantly in time. The important aspect is the user-friendly interfaces, which allow the passenger for a click or just drag and drop option. If it involves too many clicks it will not be of any use or advantage.

We have a governance board, which I in my capacity as an IT officer chair with other CFOs and other business directors, to drive the projects forward. The team is also charged with formulating the airline's future business plan help deliver transformation targets.

It is important that IT sits at the top table and has its say. The advice is to concentrate on particular areas and respond to the request in an organization only if there is a point of convergence.

Another important aspect is to have a strong established partner. In India, TCS has been an old partner-for 9 years-and currently there are talks with Infosys for another partnership for application development work.

Could you share your current and future IT projects?
Looking at future technology trends and making sure it's the one is an important function of the IT department.

Things will very soon go a lot smoother at London's Heathrow Airport with the expected completion of our VoIP deployment by March '06. Cisco will deploy VoIP to over 14,000 British Airways staff, which will use 8,500 Cisco IP phones at its UK offices and airports.

Another important project is the Terminal 5 development, again at London's Heathrow airport. The project will see BA transfer all of its services from the other terminals to Terminal 5 by spring 2008. It's a major undertaking for IT, with all aspects of the terminal-including customer check-in and baggage-to be handled by new state-of-the-art systems.

The Terminal 5 IT systems are set for an initial launch in January 2007, so that the team can perform testing for a little over a year before it goes live to the rest of the world.

Apart from these we are actively scouting new business partners in India, like Infosys, for further development and back end process outsourcing.

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