Australian CIO Summit 2012

IS Transformation and Driving

Technology Investment Value

Segar Reddy

Virgin Australia

Technology Investment Value

25 July 2012

Introduction

• The repositioning and transformation of our airline under the ‘Game

Change Program’ business strategy is progressing well

• Platform for growth now largely in place

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• Early benefits from Game Change Program now flowing

Virgin Australia & the Game Change Program

Virgin Australia is in a period of substantial growth and change driven by the Game Change Program led by Virgin Australia’s CEO John Borghetti. The Game Change Program aims to make Virgin Australia the airline of choice – for the corporate market, as well as the leisure market, through the introduction of new and improved services, products and a fresh new look, whilst maintaining the Virgin service and flair.

Virgin Australia’s vision is to:

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Virgin Australia’s vision is to:

� Be the airline of choice� Be Australia’s best customer led organisation� Do for corporate travellers what we did for

leisure travellers

“It never is business as usual. Business as usual is

actually changing things.”

John Borghetti

The Australian, 5 May 2012

Game Change strategic goals

Key strategic pillars:

• Diversify revenue line

• Create global network

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• Create global network

• Access growth markets

• Maintain cost advantage

• Upgrade product and services

• Invest in our people

Low Cost Carrier

Premium airline -increased service levels

Bu

sin

es

s

Str

ate

gy

• More complexity - service offerings, processes, customer base etc

As the business transforms - IS must transform too…

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IS

Ch

an

ge

s

customer base etc

• Larger, more professional organisation

Low Cost Carrierappropriate

Scale up IS capability

• IS has to enable and facilitate fast-paced business change

• Develop solutions appropriate to a large organisation

• Higher, industry practice expectations

IS strategic framework

Deliver solutions Focus Deliver real Provide

A trusted partner delivering technology

capability that meets business aspirations

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Deliver solutions

that transform

the business

Focus

on customer

outcomes

Deliver real

business value

and efficiency

Engaged and motivated people

Provide

consistently

stable systems

Within this framework, our FY 13 priorities:

• Deliver Unify Program

• Robust systems

• Game Change support

IS team objectives

• Build an engaged and motivated IS team that is empowered to take action

• Deliver solutions that facilitate the transformation of the business

• Enable an improved guest experience through better management of

guest processes and information

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guest processes and information

• Optimise value from sourcing arrangements

• Deliver systems and services in a cost effective manner

• Provide robust and stable systems

• Deliver innovative solutions for competitive advantage

Becoming ticketed airline…

• Transform business operations and processes to deliver guests a

seamless travel experience by adopting worldwide airline standards

• Transition to ticketed operations by introducing the SabreSonic® Customer

Sales and Service (CSS) system mid-January 2013

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• This program of work will:

o Unify four airlines with two different reservation systems under

one strong brand, operating under a single airline designator code

on one reservations platform

Becoming ticketed airline…

• Delivering significant benefits to guests:

o Providing enhanced, seamless, travel experience across the Virgin

Australia and partner airline networks

o Easier to book and travel across our global network, enabling:

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o Easier to book and travel across our global network, enabling:

� seamless through-checking of baggage on partner airlines,

� Easier and more consistent recognition of guest preferences, no

matter where you travel,

� Ability to provide additional Velocity benefits.

Becoming ticketed airline…

• Delivering significant benefits to our industry partners:

o Facilitate enhanced interactions with Travel Management Companies

and travel agencies worldwide

o Our domestic and international products will be available via all

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o Our domestic and international products will be available via all

distribution channels and through the GDS it will be faster and easier

for travel agents to book with Virgin Australia

o Corporate travel agents will be able to book with greater ease, using a

system that is a global standard

o Easier for Alliance Partners to work with us - a single airline designator,

adoption of IATA international airline standards, one set of processes for

international and domestic operations

Becoming ticketed airline…

• Delivering significant increased business capability:

o Removal of ‘workarounds’ currently encountered by our team members

because we use two different reservations systems

o Integration of airline operations with one system and one designator

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o Integration of airline operations with one system and one designator

code

o Improved customer recognition and experience

o Integrated seamless travel with our alliance partners

o A more efficient industry standard Global Distribution System (GDS)

process

Value-based sourcing – the past

• Large number of vendors bringing increased complexity, value dilution and

less consistency of practice as we have grown as an organisation

• Contracts lack optimisation• Contracts lack optimisation

• Often short timeframes lead to indifferent results

• New Group Procurement Policy is bringing improved consistency and

compliance

Value-based sourcing – new approach

• Develop and Implement new Sourcing Strategy

• Communicate it internally

• Communicate it to Vendor Community

• Progressive roll out of tactical initiatives

Sourcing principles

In applying the sourcing decision framework the following dimensions were considered:

• Strategic value - is a service considered core or non-core activity to Virgin?• Capability - does Virgin have the capability and capacity to do this function in-

house?• Risks – what are the risks associated with each sourcing option?• Costs / Value – can Virgin obtain better value through an alternative sourcing • Costs / Value – can Virgin obtain better value through an alternative sourcing

arrangement?

Service Towers

Tower Sub Services

Service Desk Service desk facilities; Level 0 – self help; Level 1 – end user support; Service

management (service integration); Service request management; End-to-end

incident management

Distributed

Computing

Desktop/laptop support; Printer support; PDA support; Desktop build/release;

Messaging & collaboration; Software distribution; Applications packaging & testing;

Enterprise collaboration; Server based computing/thin client management; Enterprise collaboration; Server based computing/thin client management;

Physical install, move, add, changes (IMACs)

Applications Applications monitoring; Applications support & maintenance; Applications

enhancements; Training & knowledge management; Application documentation;

Middleware

Centralised

Computing

Server operational management; Database management; Centralised log

management

Storage and Backup Application backup; Network backup; Storage services

Comms (Network) Network monitoring; Network management; Network IMACs; Lan & Wan

Data Centre Facilities management

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