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On a budget… and keeping to it

On a budget… and keeping to it

Jetstar spends less than 1 per cent of its total revenue on ICT, but CIO Stephen Tame is not complaining.

Stephen Tame, CIO for Australian budget airline Jetstar, knows an awful lot about how to run ICT operations on a shoestring. Jetstar, an independent subsidiary of Qantas, is already around three quarters of the size of Air New Zealand, clams Tame, and yet gets by on a lean and mean ICT team of six. However, there are no entry-level programmers in this half-dozen — all are senior-level ICT managers responsible for managing ICT supplier relationships.

Tame says Jetstar spends less than 1 per cent of total revenue on ICT costs, outsourcing everything that doesn’t count as a core competency because ICT support and management delivers “zero strategic value”.

“Correct sourcing strategies support speed to market, deliver lower costs and free up ICT thinking to deliver on business advantage. If a CIO doesn’t move out of managing the hardware appliance, they will always be a person who manages the hardware appliance. We need to be more commercially and innovation focused,” says Tame.

Other cost-saving initiatives include using thin clients in airport check-in areas, server virtualisation, letting ICT suppliers manage their own infrastructure — “buy managed services, not service management”, says Tame — and using contract skill for short-term projects. He says many business processes do not necessarily need ICT and some organisations automate almost from habit. “When you build an agile ICT business all you need is a clean piece of paper, not a list of standard conventions. Innovation is more than just technology and IT should be an enabler not a dependency,” says Tame.

For example, Jetstar does not use automated readers for checking boarding passes — instead a simple ‘bingo ticket’ manual card allows check-in staff to see who is missing from a flight.

“Another airline said to us ‘that’s fine, but when you get wider-bodied aircraft with two or three queues entering at the same time how will you manage?’ We thought about it and came up with transparent bingo tickets which we overlay at the end. People often think IT is the answer to every problem, but that’s not true.

“If an airport goes offline; we can go manual for a few days while other [fully technology-reliant] airlines have long delays,” Tame claims.

Currently awaiting new aircraft, Jetstar recently took a minority shareholding in a Vietnamese airline. This move will allow the Jetstar brand to be used in Vietnam, deliver unlimited landing rights in France (as Vietnam is a former French colony) and support Jetstar’s plans for global franchising.

“From an IT perspective we keep wondering ‘where will the executive take us next?’ and so [ICT] infrastructure has to be able to adapt to change very quickly,” says Tame.

He says a recent conundrum involved the need for Jetstar ICT systems to be up and running at an airport in Thailand. However, until the final few days before the service launched, the company remained unsure of which of the two airports in the city it would be able to use. To meet the challenge, Tame and his team created a set of portable check-in units using stripped-down IBM laptops, barcode readers, baggage label printers and basic connectivity. While these eventually weren’t needed in Thailand, Tame says they worked a treat in Vietnam.

“We are like [military] engineers who are asked to build a bridge, but don’t know until the last minute where the crossing will be. I have a simple technology road map: Minimise, centralise, radicalise, commoditise and outsource,” says Tame.

Jetstar also takes an unusual approach to data security — like many managers, its company managers want to load their own [non-supported] data and software onto devices, including printer drivers that enable them to print from home. Instead of locking down the devices to enforce network security, Tame says he lets Jetstar managers load what they like to their laptop and hand-held devices with one proviso: If there’s a problem and it can’t be fixed within 15 minutes, the whole system gets wiped and reloaded.

Stephen Tame was a speaker at the CIO Conference 2007 in New Zealand organised by Fairfax Business Media.

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