Automation of Airline Reservation System - Term Paper Example

I. Introduction to the topic and context Airline reservation system has a unique operating landscape. As a predicate, airlines travel from one location to another and in each location, passengers either board or disembark airplanes. Generally, passengers purchase their tickets at the location where they would board or have pre-arranged reservation to board from another location. One key complexity that needs to be considered in the reservation and purchase of ticket is the availability of seats in the plane. The boarding and disembarkation of passengers at different locations makes the process complex as it is difficult to track down reservations to ensure that no overbooking ensues that will make the airline legally liable in some jurisdictions or under booking that will cause the airline company to lose some money. Manual process - 1 is to have a central location control the information with regards to the availability of seats. The process begins with the ticketing office will have to place a telephone call to the central control office to verify the availability of seats of a particular flight. The challenges faced by this system are—first, a sustained operation over a period of time may cause employees to become complacent that could result to errors. Second, cost for long distance calls will run up to an unmanageable level. Third, the process takes so much time that the turn-around time to confirm a reservation or book a flight will be very lengthy that will test the patience of potential clients. Manual process -2 each ticketing office will have an assigned finite number of seats to particular flights that they can dispose. The challenges under this system are: First, under booking as there is no way that one ticketing office would have filled-out the seats assigned to it. Second, the inflexibility of the system will result to losses in situations where a certain jurisdiction experiences a slump in its sales. Third, there is no way of knowing if a passenger will disembark in one location, ergo there is no way to determine how many seats will still be available after the first disembarkation occurs. A. American Airlines The automation of the reservation and ticketing system in the airline industry is the best example of how to make use of the latest technology available to man. An online automated reservation and ticketing system will make information about seat availability accessible to all ticketing outlets. Seats can be booked and paid for from anywhere in the world and equally, vacated seats caused by the sudden cancellation of passengers can easily be filled from anywhere in the world. Errors are easily eliminated by the drag and point user friendly screens. Passengers themselves can make reservations without any assistance from any airline employee. Payments can even be made online through credit card that would enable passengers to pick choice seats. This paper shall examine the collective experiences of the airline industry’s shift from the manual ticketing system to the online automated ticketing system. The 80-year old airline industry first explored the automation of their reservation and ticketing office in the 1950s. This paper will examine the failures and the successes of the system implemented for the industry with the primary purpose of learning the reason for the failure and their success. B. Sauer Sauer, in 1993 developed a model composed of project organization, information system and its supporters. Visual representation of the model is the “triangle of dependencies” as coined by Sauer himself. The information system depends on the project organization, the project organization depends on its supporters, and the supporters depend on the information system. According to Sauer himself the information systems context consist of six dimensions cognitive limits, environment, technical process, structure, history and politics. He further posits that Information System termination failure is entirely different from that of flaws. Termination failure is the end of the implementation and the abandonment of the goals of the information system development project, whereas flaws prevent the proper usage of the system. To illustrate: An airline system that lost the ability to issue ticket is not a termination failure it is a flaw that can easily be rectified. Examining SABRE, SOCRATE and CONFIRM Information System Development projects this paper shall determine their formula for success or what spelled their failure. II. Background literature John Knight in November 1972 discussed the technical background of the Airline Reservation System through a case study. Knight detailed the technical aspect of the system as well as its expected performance metrics. He also enunciated the complexity of the online system and the importance of maintaining its service level. The most important commodity of an airline is the passenger seat. It is understable, therefore, that the first major use of computeres in airlines was for improving the efficiency of those functions most directly affecting the “load factor” or seat occupancy. By the early 1950’s, American Airlines realized that the number of people required to control reservations manually in locations from coast to coast was generally costly and unwieldly. (Knight) American Airlines introduced and developed its centralized computer system to achieve a successful market strategy. The new computerized system benefited not only the passengers but the market as well. Under the computerized system, a more competitive market was created as the passengers or end-users were given the opportunity to choose from different airline companies various airline services by comparing the prices and other promotions offered by just one click. Sabre had strong impact on American Airlines by introducing the first ever information system processing. This transformed the antiquated process of reservation giving them competitive advantage by the use of automated daily reservation process and providing data for American Airlines’ management to improve passengers’ services. The new information system made data readily accessible to all concerned and assisted passengers in sales and reservation records not to mention ease in the preparation of management reports. With a more efficient system therefore sales and revenues increased and the employees’ productivity likewise showed remarkable improvement (Plugge & Perry). However, a perfect system can never be attained as new parameters are introduced to adopt changes in the market. This view is supported by Oz (2006) when he stated that in order to sustain competitive advantages, the system need to be continuously modified and enhanced. This philosophy became the mantra of American Airlines. Sabre kept evolving over time to cover more than airline services. It expanded its facilities and amenities to booking hotels, cars and other products. The evolution and growth of Sabre was recognized as the industry standard. In 1985, easy Sabre system was introduced. Passengers can now use the more modern system to book services by themselves from the comfort of their homes and using their personal computer. Sabre also started to provide IT services worldwide given that more than 450 clients in 73 countries availed of its services, and the revenue of the company from Sabre accounted for 65.8% of company revenue (Sabre Holding). Also, in 1980, its strategic marketing advantages gained more prominence with its interconnection with other companies. Sabre was used by other companies, including 130,000 travel agencies worldwide (Sabre Holding). Travel agents became ‘lease’ customers for Sabre where they linked their system to the Sabre system gaining access to all airlines and in return, American Airlines gets paid on the use of the system (Schulz). Sabre had also strong impact on airline customers, they more satisfied with the quick service. Sabre evolved from technical solution to solve an airline reservation dilemma. The rewards for the successful implementation of the project cannot be ignored. From a historical perspective even as early as 1962, American Airlines started using Sabre in parallel with Magnetronic Reservisor. American Airlines achieved higher annual revenue and cost saving by adapting computerized reservation system. The annual revenue increased from $3.3 million in 1962 to $5 million in 1970, and saving operation cost increased from $2.5 million in 1963 to more than $5 million in 1970. These revenue benefits came from the reduced numbers of employees that operated the manual system and increasing the productivity by cutting the average time of reservation process from 45 minutes to few seconds (Copland & Mason & Mckenney, 1995). III. Research approach and rationale This paper will explore the success factors American Airlines experienced in the development of its Airline Ticketing and Reservation System using Sauer’s model as basis for the analysis. This paper will also study the contributory circumstances that led to the failure of the same application in the French railway system. It is likewise the intent of this paper to review the benefits, difficulties and challenges of implementing information systems. Identify the applicable concepts that moulded the current information system industry. IV. Analysis A. CONFIRM IMPLEMENTATION The successful development of Sabre by American Airlines does not ensure another successful development by the same corporation. From the failure of one corporation, another company learns from it thus CONFIRM (which is a failure case) was likewise chosen to be evaluated and examined in this paper. CONFIRM gave lessons to learn from, and shed lights on some issues to consider in future system development. What makes this failure unique is that CONFIRM was developed by the same corporation that developed the leading advanced airline reservation system SABRE. CONFIRM was designed by AMRIS (American Airlines Subsidiary), and it was supposed to be state-of-the art advanced reservation system which combined airline, accommodation and car rental. The failure of the system was discovered at testing phase, and the project was cancelled after three and half years with a loss amounting $125million. When analyzing the reason behind that failure, it can be deduced that there were many factors that contributed to the failure. The most important one was the inappropriate system development framework. Lack of communication and unclear requirements caused the failure as the clients did not give sufficient details to their actual needs or requirements. In any endeavour, communication is a key factor to convey the actual requirements. Proper and correct data generation can only be achieved if the stakeholders and developers have gained understanding on what is needed. Communication is therefore imperative to ensure that the clients and developers understand each other not only to comprehend the requirements of the new system but to know what is expected from the new system as well to make sure that the developers capture the requirements of clients. In the case of CONFIRM, there was failure of communication. From the beginning, the project may be said to be disaster-prone as the stakeholders and the developers met once a month. This arrangement was not enough for a project that big. Expediency cannot be a substitute to a well-thought and well-developed system with the input coming from all concerned. In Agile development, however, there is emphasis on daily communication (scrum) and all parties worked closely in small group and communicated effectively which eliminated any chance of misunderstanding or acquiring vague requirements. Nonetheless, there were notably bad management practices from both sides. Both mishandled the development process of the new system. From the clients’ viewpoint, it did not authorize a person in-charged or state the deliverable phases thus it did not meet the clients’ expectations that the process would get better. Conversely, in agile development, mistakes can be avoided because in agile, the deliverables are given prominence after each iteration. So, clients can make sure about the progress if it is going in the right direction or not. Agile development is an iterative and incremental software development methodology which yields high quality product on time. Sabre Holdings moved to Agile development in 2001. It was aiming to replace the waterfall methodology with a leaner software development methodology. Sabre Holdings had to tailor their specific methodology owing to the nature of its business which implies complexity and distributed with a large number of team. Sabre Holdings finally decided to combine Agile methodology with the Rational Unified Process and call that Agile UP (AUP). The first project started with AUP internally. They found better results and quality by using AUP, and overcomes the problems of unclear requirements, miscommunication and misunderstanding with the active involvements of users (Zieliński& Szmuc). In the literature, Layman et al., (Layman,Williams and Cunningham), they examined the use of XP practices (which is a type of agile software development) at Sabre airline solution. The two Sabre teams were compared, one of them used traditional methods and the other one developed the product using XP. It was discovered with that the products created using XP, there was 65% reduction in the products’ pre-release defect rates, 35% reduction in the post-release defect rates, and 50% improvement in productivity. B. SABRE vs. SOCRATE SOCRATE is a French railway distributed system which is a customized version of SABRE. SNFC adapted SABRE airline system (because it was a successful system in American Airlines) to use it in railway environment. It customized computerized system to shift its context from the airline industry to the passenger railway industry. As soon as the French railway company implemented SOCRATE, the system was deemed a failure and it became a national issue. The reason behind this failure could be attributed to the differences between the airline environment and railway environment (MITEV). The main motivation behind SNCF adaption of a new information system is for railway to gain competitive advantages over that of airlines. SNCF purchased SABRE in 1989 for 1.3 billion and modified it in order to meet their requirements. In 1992, the testing phase started which was finished after seven months and the system was finally introduced in 1993. However, there were many technical problems, unfriendly user interface and user resistance which contributed to its failure. Only a few of the technical problems that were discovered were resolved owing to the time pressure imposed by the top management. Also, a limited period of 5 days was allotted for training sessions for the French to get acclimatized to the system. The time allotted is too short to learn the ropes so to speak thus when a problem arose, no immediate resolution was presented. Also, there was little user participation and no risk analysis. Only 6 months after it was introduced, there was a marked declined in sales and lost important market share and envitably, lawsuits followed (EGLIZEAU). MITEV (1998) argued that the difference in the nature of air and railway environment was the reason, while EGLIZEAU et al. (1996) claimed that the failure was because of wrong practice in system design and development. Both arrived at the same conclusion though. The development process was faulty for the reasons EGLIZEAU et al. mentioned but some examples of success story of systems that were based on another system. For example, Thomson Holiday used TRACS (real time platform) as a basis for it reservation system. Mitev also discussed the underlying reasons on why this particular SABRE implementation failed in its mission to provide ticketing service. Mitev, further stated how technical malfunctions, political pressure, poor management, unions and user resistance led to an inadequate and to some extent chaotic implementation. In any implementation of information technology based solution, change is inevitable which may even result in the pruning of the work complement and the response of management in addressing the apprehensions of its stakeholders early on as well as the selection and choice of the system are equally important. The fear of the stakeholders of losing their means of livelihood may impede the implementation of the project as the cooperation of an important component to completely execute the project is absent. The management and its workforce must act in unison towards the accomplishment of a common goal otherwise the project will fail even at its inception. The primary consideration in any project implementation is “What’s in it for me” or “How am I going be affected by this change”. Thus, aside from presenting a streamlined process, the workforce or stakeholders must be motivated to embrace change or innovation. C. SABRE using SAUER The Supporters At the onset, all the stakeholders have their unequivocal support to ensure that SABRE succeeded in its implementation. Logistical support in terms of manpower and time and other resources was provided to the project. The clerks and agents were generous in providing their time and expertise to ensure that the detailed specification of the system being developed corresponds to actual operational parameters. The Project Organization IBM has been in the automation industry for quite some time when they proposed the project and eventually commission to do the project. Their competence in implementing automation projects was equalled by the number of successful implementation and clients they have. The coordinator or project lead between the American Airlines and the technical team is a competent executive and have years of experience as a frontliner. The Information System Having the support of the client the information system was able to gather all the pertinent data needed to ensure that the application becomes a success. Enough time was provided to ensure that testing are conducted and errors are resolved until full integration are scheduled. Statistical information with regards to the volume of transaction or the potential transaction were readily provided that the infrastructure was sized correctly to conform with the needs. D. Critique It should be noted that the systems employed in the initial design and concept formulation of Sabre was used in succeeding projects. However for some reasons, all projects mentioned failed miserably. Other studies indicated that the success of the airline ticketing system was because of the political will of the owners and stakeholders. The developers were experienced or have a history of success. The proponents of these concepts also indicated that their success was due in part to comprehensive training and testing. No doubt that the level of technology envisioned for each projects are the subject of deliberation to determine if it is the correct fit, and are compatible for the existing as well as other essential databases already in place. Projects succeed according to pundits of the two propositions because of the strong leadership and managerial quality of the manager-owner of the application. Projects do not succeed just because of the intimate involvement of the stakeholders. Success comes when the stakeholders themselves own and consider it their own the project. Its success should be their success, and any other way any, projects would just be another statistics under the column of failure. In developing a solution for an organization, a project manager cannot take a pragmatic approach without considering the other areas of the business. It cannot focus on one department alone which is perceived to be the department directly affected. For example, an innovation introduced for the Customers’ Service Department, its primary function is indeed ticket booking and reservation but in reality, such function is only a part and parcel of the organization as a whole. Finance, Operation, and Information System department and other departments should likewise be considered in the development of an organizational system. As one department is not an island in itself that can function independently from the other departments. Its functions are inter-connected thus system integration or data generation must likewise be congruent with the needs and functions of the other departments. In developing applications for a company, any company for that matter, the same process is employed notwithstanding differences in the nature of the business being undertaken. The first thing that needs to be considered is the business process map. Common business vocabulary should also be defined that will enable users and developers to understand each other. Then the processes should be reduced not only to writing but should also be re-written in flow charts so that the programmers and the users have a common understanding of what is going on. However, it should be noted that the policies, procedures and work instruction should support the process as understood by the models. SOCRATE and CONFIRM should be considered in the evaluation. The basic principle of Garbage-In-Garbage-Out is the most appropriate manner to describe why the two projects failed. Since both systems relied heavily on interactions with their users in defining the requirements or specification of the program, the interpretation of the data gathered should not be subjective but should be based on cold neutrality or objectivity as they are developing acceptability of the screen’s modules. The system that was developed focusing only on the experiences and technique of the frontlines, disregarding its written policies and procedures including the work instruction as applied to the module. Consequently, if those interviewed deviate from the official office process, both techniques will be successful in developing applications based on the deviations committed by stakeholders. V. Conclusion The first major computerized reservation system by an airline company was implemented to solve the problem of seat occupancy. American Airlines correctly predicted the market trends and expected that the riding passengers will increase over time if the ticketing and reservation system will be made faster and more responsive to the needs of passengers. It was noticed that success story like Sabre did not come overnight, it took years to introduce it then there were incremental improvement and innovation done regularly. The system has expanded from the original reservation and ticketing office to its current configuration. It should be noted that, under this system, all the stakeholders had the same desire, to implement a computerize reservation system. The tellers, the sales agent, the owners and the developers have one desire and that is to make sure that the computerize reservation system succeeded. In developing applications, the specifications of each module should be in accordance to the written and formal policies and procedures being used by the organization. Since the same policies and procedures are augmented by the experience and techniques of the individual users and these users’ findings should be accorded great respect. In developing applications particularly in defining the details of the database, and also the processes it is best to conduct a map of the entire business operations and pattern all innovations in accordance with the thrust of company and not focus in one department alone. Also, the openness to modify the existing system to enhance its features should be the norm. VI. References: Copeland, D.G., Mason, R.O. & McKenney, J.L (1995) ‘Sabre: the development of information-based competence and execution of information-based competition’, IEEE JOURNALS, 17 (3), pp. 30-57 Eglizeau, C., Frey, O., and Newman, M. (1996) ‘SOCRATE: an implementation debacle’, IET Conferences Harvard Business Review, 68 (4), pp. 118-125. Head, R.V. (2002) ‘Getting Sabre off the ground’, IEEE JOURNALS, 24(4), pp. 32-39 Hopper, M. D. (1990) ‘Rattling SABRE—new ways to compete on information’, Knight, J. (1972) ‘A Case Study: Airline Reservation System’, IEEE JOURNALS, 60 (11), pp. 1423-1431. Koppius, O. et al. (2005) ‘Why are customers coming back to buy their airline tickets online? Theoretical explanations and empirical evidence’, ICEC 05: Proceedings of the 7th international conference on Electronic commerce, August 2005, ACM New York, NY, USA, pp. 319-326 Layman, L. (2004) ‘Empirical investigation of the impact of extreme programming practices on software projects’, ACM, pp. 328-329 Layman, L., Williams,L. & Cunningham, L. (2004) ‘Motivations and measurements in an agile case study’, ACM, pp. 14 – 24. Mitev, N.N. (1998) ‘A comparative analysis of information technology strategy in American Airlines and French Railways ‘, IEEE CONFERENCES, 6-9 Jan 1998 , Kohala Coast, HI , pp. 611-621 Oz, E. (2006) managemet information system. 5th edn. Course Technology Plugge, W. R. & Perry, M. N. (1961) ’ American Airlines "Sabre" electronic reservations system’, ACM, pp. 593-602 (Sabre Holding) http://www.answers.com/topic/sabre-holdings-corp [accessed 17 november, 2010] Zieliński,K. & Szmuc, T. Software engineering: evolution and emerging technologies Read More