Renaissance at british airways
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Renaissance at British Airways. Adapt to Survive Paul Beadsmoore Renaissance Architecture (role) Principal Business Analyst (job) Business Solutions (team). Before we begin, a word from BA recruitment. Vacancy for a talented individual: To turnaround the first loss since privatisation

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Renaissance at British Airways

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Renaissance at British Airways

Adapt to Survive

Paul Beadsmoore

Renaissance Architecture (role)

Principal Business Analyst (job)

Business Solutions (team)


Before we begin, a word from BA recruitment

  • Vacancy for a talented individual:

    • To turnaround the first loss since privatisation

    • To deliver a ‘tough strategy for tough times’

    • To build a sustainable future

    • Must be focused on the customer

    • Must be in touch with the workers

    • Must be ruthless in cutting costs

  • Replacing the boss is one of the biggest changes a company can experience


Summary

  • There is now unrelenting pressure for the airline industry to continually change

  • British Airways is transforming its Revenue Management capability to enable a flexible future

  • Applying the technique of component based development (CBD) will facilitate this transformation

  • Smart-sourcing of components will deliver the most efficient and effective solutions


Some examples of change affecting British Airways

  • Capacity reduction - focus on high yielding business

  • New products - 4 cabins in longhaul

  • Deregulation in Europe - low cost carriers

  • Excessive global capacity - airline industry currently making a loss

  • Pressure on profit - strength of sterling, fuel

  • Selling - intermediaries embracing the concept of revenue management


Changes to the way BA Revenue Management reports

  • Now part of the Strategy Department

  • Part of a work stream called Capacity Management

    • Fleet Planning

    • Network Planning - includes Fleet Scheduling

    • Revenue Management

  • Managers will be appointed to a new structure on 3-Apr-00 to enable change

  • But what is most important is how the organisation is structured ‘at the bottom’ - where the work gets done


Major change to OR at BA

  • Keith Rapley has left BA

  • OR now part of the Strategy Department

  • Structured into functional and cross-functional teams

  • Work within a strong definition, i.e. strategic consultancy, to maximise value

  • Formalise the movement of OR people into the line

  • OR lost me!


Change to take advantage of e-Opportunities

  • e-Procurement (suppliers) and e-Working (employees)

  • e-Commerce (customers) - 50% on-line revenue by 2003

  • e-Ventures (new internet businesses)

    • On-line ‘neutral’ travel agency

    • Air Miles on-line

    • Lifestyle portal


Renaissance progress

  • Mission remains to be world leading

  • Increased target - recognising that revenue management is critical to the success of our strategy

  • Completed the process and organisation design of the ideal capability (To Be)

  • Completed system architecture gap analysis (SAGA)

  • About to complete the implementation plan


Renaissance plan

  • Integrated implementation in 6-month phases

  • O&D Phase 3 will be embedded in the delivery

  • e-Initiatives will be incorporated along the way

  • Due to complete by end of 2001

  • Establish an environment of continuous improvement


Transition Planning - focus on business capability and benefit delivery

  • Business Capability Streams

    • Improving existing capabilities

    • Developing new capabilities

    • Business cases with clear scope

    • Small focused teams enabled to make decisions

    • Whole department have opportunity to contribute

  • Transition Framework

    • Coordinates implementation

    • Manages dependencies between streams

    • Integrates new capabilities with existing ones

    • Prioritises work and recruits resources

    • Plans further work


Renaissance method

  • Objective - transform Revenue Management into a dynamic enterprise

  • Stages -

    • Solution Creation - turning ideas and theories into solutions within a creative environment

    • Model Office - use a process lab to eliminate the risk in the solution

    • Implement and measure performance

  • Techniques - CBD and smart-sourcing


Component based development (CBD)

  • An enterprise is a collection of capability components which cooperate by each using the services supplied by others

  • A dynamic enterprise is an enterprise which can evolve (new components added, old ones removed) without having to stop

  • A dynamic enterprise will operate safely and effectively if its components all obey three laws


3 laws for a dynamic enterprise

  • A component, added to an enterprise, may not disrupt the behaviour of that enterprise

  • A component using the services of another, does so at its own risk and must protect itself from damage

  • A component offering a service does so at its own risk and must protect itself from misuse

  • Reference - Peter Henderson, University of Southampton, UK


Architecture

Distribution

Steering

Infrastructure

Forecasting

Monitoring

Partner

Integration

Optimisation

Planning

Trading

Opportunities

Management of

Information

Smart-sourcing

Some examples of high level capability components

Performance

Management


Working Business Plans

Business Plans &

Financial Targets

Market

Area

View

Schedule

  • Flow Plans

  • Price

  • Demand

  • Yield

  • Cost

  • Channel

Network Plan

Optimisation

Network

View

Route

View

Engine

Numbers


Smart-sourcing

  • On-site - staff at LHR headquarters

  • Off-site - Telephone Sales in Newcastle

  • Off-shore - Revenue Management Support in India

  • Automation

    • In-house - O&D, GHOST (groups)

    • Third party - IDEAL (dealing), DSS (decision support)


Summary

  • There is now unrelenting pressure for the airline industry to continually change

  • British Airways is transforming its Revenue Management capability to enable a flexible future

  • Applying the technique of component based development (CBD) will facilitate this transformation

  • Smart-sourcing of components will deliver the most efficient and effective solutions


‘Running an airline involves dealing with complex technology and logistics. Yet, in the public perception, this is a very straightforward business, centred on the simple proposition of bringing together a willing seller with a willing buyer.’

Colin Marshall

Acting Chief Executive

British Airways


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