We have outsourced 100% of our IT

As the CIO of JetStar, Stephen Tame is responsible for the delivery of
technologies and innovation to support the fast growing JetStar business. He has
more than eighteen years of experience in the airline industry. Tame was a part
of the team that worked on the merger of Australian/Qantas, the merger of Ansett/Air
New Zealand. He has also been part of the salvage crew for Air New Zealand and
has provided consultancy to Singapore, Thai and Malaysia airlines.

Tame focuses his management and leadership skills in challenging the
conventional thinking to deliver greater business services and opportunities
while minimizing the operations cost.

Tame is responsible for the introduction of formal project and project
initiation methodologies, development of project quality standards to meet
Tickit, ISO9001 certification. He is also in charge for the formulation,
business modeling and communication of business opportunities and the building
of infrastructure, systems, application architectures and business processes to
deliver opportunities across vertical markets and in the systems management
(ASP) space.

He is also responsible for building and management of a software
development team and the supporting procedures, delivering worldwide business
application and technology solutions.

That is JetStars vision as an airline and what is your level of
engagement with Qantas Airlines?

Ours is a no frills carrier, and both of our Asia and Asia Pacific
operations are based out of Singapore. The Asia Pacific business being second
largest in terms of size. Even though JetStar is a wholly owned subsidiary of
Quantas, we are fiercely independent with regards to our operation. We both have
separate processes, systems, and people in place. Our network and our
environment are different from Quantas. We are growing annually at the rate of
20%.

Can you elaborate on how you set-up the IT infrastructure at JetStar?

In business since 2004, we started designing the business from scratch and
the same goes for IT. I was fortunate to have started with no legacies and no
constraint, therefore, my IT model is service focused and very different from
what most of my compatriots have made. I have only five full time employees
running IT for an airline of that size. What we have done is to build a
variabilized system and service delivery models and variabilized supply
agreements with number of suppliers. A few years back I decided to go for
virtualization of 100% of all servers, storage and applications. We have
replaced PCs with Thin Clients and thin terminals at all airports we operate at.
We dont have any moving parts or hard drive. I keep joking that you can seal
the machine in a bucket of water and it will run for ten years. We run on a low
cost model even though we operate in fourteen countries, so far we have no IT
offshoring. We deliver all our business application over www.jetstarc.com/office
through a VPN.

Who have you outsourced your IT to?

We manage our IT supplier just like someone manages the investment
portfolio. It is just like investing our own money on IT. Never with one, never
exclusive, but shared with a number of suppliers. I have suppliers for data
center (located in Melbourne, Sydney, and Singapore); suppliers who manage
services, ASP services. For example, Zensar looks after our operations
management system of aircraft position and scheduling and crew system, while the
Engineering systems are managed by iGate. Our data warehouse and executive
information system is managed by Capgemini.

Each supplier is considered a partner at JetStar and we expect them to work
that way. We have an onshore representation. I manage the portfolio and decide
which supplier gives me the best return, and that way we get best service from
each of them all the time. Each of these outsourcing deals is for a period of
three years.

There are two components of each dealsystems or service management, which is
generally fixed but reducing over the years. Then there is a variable component.
I have a pool of variabilized service pool from each of them.

What percentage of your revenue goes to IT?

For us, its about 0.9%.

What are some of the typical challenges that you face in the 100%
outsourced IT scenario?

As we move into Asia and expand our operations, we get into latency
situations in our network. In order to resolve that, we have set-up a point of
presence in Singapore. Once one gets into the Singapore network, one is
redirected to the data center. Once we start operating in the US and Europe, we
will need to set-up a point of presence in these locations where fat Internet
pipes are available for allowing us to continue with our low cost model. We need
to manage our technology in order to keep pace with our overall growth. At
JetStar, we are trying to build an effective service delivery model. Service
includes more than IT, it also includes call center services, transactional
services, lost bag management services so when we scale up, its not just
technology that we have to scale up. Resolution is managed by Accentures
Navitair, and we pay per ticket like most other low-cost carriers who use
Navitair products which may not be as sophisticated as some of the high cost
ones, but it is effective.

What kind of challenges has JetStar faced in terms of providing robustness
of Internet infrastructure, considering most of the ticketing has gone online?

Around 80% of JetStar sales comes from online, as being a low cost carrier,
we have huge Internet volume and direct sales. We also leverage our Quantas
relationship. We have undertaken some interesting initiatives to enhance
customer experience in the online world and at airports.

For instance, we have started POLi which facilitates real-time payment for
bookings made on JetStar.com via internet banking. Before this, JetStar
customers could only pay with a debit card, but with the introduction of POLi,
customers can avail of the convenience and security of Internet banking apart
from allowing payments to be made directly from debit fund accounts.

Sudesh Prasad

sudeshp@cybermedia.co.in