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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

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
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
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
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
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
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
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
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
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
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
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
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
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
some examples of high level capability components
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
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
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)
summary1
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
colin marshall acting chief executive british airways
‘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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