You couldnt blame him if Monte Ford seemed a bit shellshocked. Soon after leaving his CIO post at The Associates First Capital Corp. just over two years ago to take on a new position as senior vice president and CIO at American Airlines Inc., Ford was hit first with the companys $742 million acquisition of TWA Airlines LLC and the need to integrate the two carriers systems. Next followed the Sept. 11, 2001, terrorist attacks devastating blow to the airline industry. Now war has made that dire situation even worse, forcing American to slash costs and reportedly consider bankruptcy protection. Through it all, however, the 43-year-old Ford has remained a fierce advocate of IT and its potential to help turn the proud airline around. eWeek Executive Managing Editor Jeff Moad recently caught up with Ford in his Fort Worth, Texas, office to talk over his strategy.
Many organizations are, like American, focused on cutting costs. Is the mission of the IT organization at American changing to simply a cost-cutting vehicle rather than a critical piece of the strategy?
At American, IT has become more strategic in the last two years to the success and reconstruction of this airline. … We are doing things that lead the industry through the kinds of changes that it needs to go through to reconstruct itself. … [Customer] self-sufficiency. Self-service kiosks. The ability to walk into an airport, swipe something, get a boarding pass, go through security and get on your plane. We provide that capability. … The kinds of information that is provided to people behind the counter, at the check-in desk that services our customers, we provide that. Electronic ticketing. The ability to take an electronic ticket and transfer it across carriers. … American led that. We said a year ago, by the end of March 2003, we were going to have an electronic ticket, and we were going to go ticketless for everything [in the United States]. And, by the end of this year, we want to be … there for every carrier in the world that we do business with.
Weve also done checking in at home on the Internet on aa.com. Very easy to do. … We did checking in by phone. You can check in at curbside with wireless kinds of kiosk devices that skycaps have. So being able to smooth out the travel experience while, at the same time, reducing cost is imperative.
How do you see the payback from the customer convenience part of your strategy?
We see it in many ways. The first way we know its paying off is because customers love it. … The average check-in [at kiosks] is less than 85 seconds. Customers love that. How could you not love checking in in 85 seconds for your flight? The second measure is relative to our internal goals around productivity. … And there were exceeding our goals … measured in a number of ways. We dont have a head-count goal. We have a customer-productivity- throughput goal. It follows if you have more productivity, you can do more with the same number of people or fewer people. Unfortunately, because of the economy and all of the things that have followed 9/11, we have had to downsize the airline to a number thats more akin to what we can afford to sustain the airline going forward. The self-service devices have helped us in that regard.
In terms of outsourcing, youve brought some functions back into your organization that had been outsourced. Why?
Management of midrange and desktop [systems], aa.com, Jetnet—we brought all those things back in-house because we wanted to bring the intelligence back to American Airlines. The history of American Airlines, by the way, is pure leadership in the industry. American Airlines [with Sabre] created modern-day networking along with companies like AT&T [Corp.] at the time.
We invented what the rest of the industry has copied in Sabre. We invented the … loyalty program with our AAdvantage miles. We pioneered revenue management, the idea that you can manage seats on a plane and manage revenue in a way that maximizes the availability of product for customers in different tiers and maximizes the profitability of seats and customers for the airline. We invented all of those things. We are in the process of getting back to a place in our existence where we are leading the industry with all of those things again, with electronic ticketing being just one aspect of that.
How much time do you spend examining Web services and similar emerging technologies?
We spend quite a bit of time examining the marketplace and understanding whats new in the marketplace. … We dont spend an inordinate amount of time doing it, though, because we dont want to focus [just] on everything thats coming down the road in the future. Because I find [that] companies or people who do that tend to constantly be doing that, and they spend a lot less time implementing whats there today. So when we take a look at problems to solve, we put a box around the problem and a box around the technology [thats available] today. Whats implementable, shippable, practical today, that is not necessarily the leading edge on everything?
[The urge to always be on the leading edge of technology] has often kept the IT function from being as productive as it can be. It creates an environment where those kinds of companies and those kinds of people are constantly justifying their existence and justifying the value of IT. We dont spend any time justifying the value of IT around here. None. We dont do studies. We dont do white papers. We dont have tribunals, nor are we brought before a court of decision makers. Everybody at American knows what the value of technology is because its such an integral part of the airline, and every product and every service has technology embedded into it. We have a technology-centric focus starting with our chairman. We have technology-literate employees. And, most importantly, we deliver what we say we are going to deliver.
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