Living the Half Life
When I joined Continental Airlines as chief information officer in 1995, we were four years into a contract with EDS to outsource almost all of our information technology. That strategy struck me as extreme, and we soon modified it. It made more sense, I thought, to outsource only the technology that was a commodity, and directly manage the technology that was strategic to Continental's operation. And that's how we've gotten to where we are today: A half-insourced, half-outsourced model with EDS.
What did we decide to outsource? For starters, EDS runs a data center better than we could, and does so more cost-effectively. So we have them run Continental's data centers.
And what did we decide to manage ourselves? We still do our own data warehousing, since that feeds our decision-support models. We also run the applications that define our relationship with our customers, suppliers, and partnersonline reservations, customer service, the supply chain.
Our mid-course correction went fairly smoothly. But in the late 1990s, we began having customer-service issues with EDS. We wouldn't know when systems at airports lost communications with the data center. We would find out from our own personnel at the airport. We also weren't getting information about patterns of equipment and network outages. We didn't like what was happening and began exploring other options.
Our customer service problems were addressed when Dick Brown became CEO at EDS. He brought new focus to the company. If it hadn't been for the changes he instituted, we would not have renewed our contract with EDS.
Now, we learn about system failures immediately and directly from EDS, so we can fix problems more quickly. EDS customized its dashboard concept, a Web-based system to measure performance indicators, to track our trouble reports by equipment type and by airport.
Even with the troubles in the airline industry, we haven't changed the ratio of insourced vs. outsourced operations. We're obviously trying to be more efficient, and we're focusing on safety and cost savings. But the mix of insourcing and outsourcing was never based entirely on cost. It was based on who does the work beston skills of the staff as opposed to specific functions. We had to lay off some people as a result of Sept. 11, but that hasn't impacted our skill sets significantly.
CIOs need to understand how to effectively work with an outsourcer. To start with, it's important to make sure the outsourcer understands that you expect them to morph into your culture, as opposed to the other way around. EDS has done a really good job of modifying its organization to meet Continental's needs.
At the same time, the burden is on the clientin this case, usto communicate what's important. We talk with EDS about goals on a regular basis. We bring them into our planning meetings. They are at our headquarters, on staff. They are part of the team. That's the way it should be.
Written with Sean Gallagher
Wejman is Continental Airlines' CIO. She has also worked at United Airlines and Chicago Northwestern Railroad