JetBlue's new IT chief relentless on meeting business goals |
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By Linda Tucci, Senior News Writer
16 Oct 2008 | SearchCIO.com |
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ORLANDO, Fla. -- If CIOs hope to play a strategic role at their companies, said JetBlue Airways Corp.'s Joe Eng, they need to make IT transparent to their business partners.
Heck, that's even true if they want to play a tactical role, said Eng, hired in March as executive vice president of systems and technology for the New York-based airline.
CIOs need to cast IT's work in terms like top-line growth or, for that matter, answer for revenue loss, Eng said. That was certainly true for JetBlue's IT department in 2007, when information systems contributed to the infamous Valentine Day's shutdown, which left thousands of passengers stranded and cost the company some $30 million. And to make a credible business case for IT investments, CIOs will need "to get very close" to their finance departments, he said. Besides all that?
"You need to set up a governance type of structure -- and I say this very bluntly -- to force the business to be involved in IT," said Eng, one of three "Mastermind Keynote" interviews featured at the Gartner Symposium/ITxpo in Orlando this week.
Eng was on stage to talk about how information technology can help the business run, grow and, when necessary, reinvent itself by focusing relentlessly on business goals, a major theme of the 2008 symposium. The other twist this year: turning the old business alignment argument on its head.
Gartner contends that CIOs survived the business school of hard knocks during the last tech recession and have a wider role to play at their companies in this current financial crisis -- if only they have the courage to take it on. Always under pressure to do more with less, CIOs know how to walk the talk. Now they need to talk the talk.
To be a partner in the business, CIOs should understand the attributes and operating principles that give their companies a competitive advantage in their marketplaces and drive relentlessly to those goals.
How IT enables JetBlue's promise of low cost, high value
JetBlue wants to be the low-cost airline with superior customer service. Founder David Neeleman has branded that goal as JetBlue's promise to "bring humanity back to air travel" in its Customer Bill of Rights and in-flight offerings such as free DirecTV, XM Radio, Dunkin' Donuts coffee and trans fat-free snacks. Next Wednesday will mark the first flight out of the airline's new passenger terminal at John F. Kennedy International Airport, an $875 million renovation of the landmark TWA terminal designed by the late Eero Saarinen. Features include free Wi-Fi access and self-service ticket kiosks after security checkpoints, so passengers can spend money to upgrade to the carrrier's "Even More Legroom" seats or change flights on the fly.
For the relatively lean IT staff at JetBlue, enabling the carrier's promise of low cost/high value means putting resources behind the company's website, where 80% of the bookings are made, Eng said. JetBlue saves money when customers book flights on the Web and check in at self-service kiosks, so these IT-enabled services drive operational efficiency -- and they're what customers want, Eng said.
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You need to set up a governance type of structure -- and I say this very bluntly -- to force the business to be involved in IT
Joe Eng
vice president of technology, JetBlue Airways Corp.
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Systems availability is mission-critical, but so is the cashless cabin, where passengers can charge stuff like a blanket set from Bed Bath & Beyond. The "Even More Legroom" IT-enabled upgrade generated $40 million in additional revenue this year, he said. Eng added that he envisions the day when passenger seats are personalized with customized info about the status of connecting flights or weather delays or restaurant reservations sent in-flight to a customer's personal digital assistant or seat screen.
To ensure the strategic use of information, Eng oversees CIOs whose main responsibility is to mine the data that keeps the company running and get it to the right people. He credits a rigorous project and portfolio management process that promotes transparency and forces the business leadership at JetBlue to collaborate with IT. The all-important governance structure helps the business "make the right decisions" on where to put a finite set of resources and money, he said. IT uses business value metrics, so if the system goes down between noon and 12:05 p.m., for example, it is reported in terms of money lost -- not just in technical jargon. Since downtime costs less at 2 a.m. than 2 p.m., a lot of resources are applied to making sure the system is up at peak times, or that the first flight of the day leaves on time -- because if it doesn't, JetBlue pays for the snafu the rest of the day in delays.
Show me the money, and IT people who can scale
One of the reasons for the Valentine's Day fiasco was JetBlue's communications systems could not scale to accommodate the havoc wreaked by bad weather. As a fast-growing airline, the carrier needs IT people who have experience at fast-growth companies that needed to scale, and that's who he looks to hire, Eng said. When sourcing a vendor, he goes for more packaged than best-of-breed systems. He has a request for proposal out for a new reservations system that will combine a packaged solution with custom touches around the edges, he said.
The CEO wants to bring humanity back to air travel, but you've still got to make money. Eng's idea of best practices is to "get very close to finance." A former CEO and CIO in financial services who took some heat when he left financial services to work for an airline -- "I guess it's OK now," he noted wryly -- Eng is probably more conversant than many IT leaders with the language of finance. He does not report to finance but does meet regularly with the CFO -- an IT leader's "best friend," he said, especially in troubled times. And despite the economic turmoil and contracting budgets, Eng assured, it "really is a great time" to be a CIO.
Let us know what you think about the story; email: Linda Tucci, Senior News Writer
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