Information Systems - Comair - Essay Example

A Report On Comair Case Study Submitted by 0 Introduction Comair, a regional airline carrier with a market cap of approx $800 million, ownedby Delta Airlines, was started as a small airline company with three propeller planes in year 1977. Delta partnered with Comair in year 1984 when Comair was having 25 Propeller planes and the flight crew schedule was managed using pen and paper. Later in 1986, Comair leased the software system from SBS international to track and schedule the crew for the airlines. As a wholly owned subsidiary of Delta airlines Comair was widely appreciated for its track record of its profitability, management, time keeping, cancellation and lost luggage statistics. In spite of maintaining a high performance on the business parameters, Comair was simply grounded for a full 3 days during the peak holiday season because it faced a highly damaging IT risk issue on December 24, 2004, when the company’s Information system for managing the scheduling of the crew and flights crashed. It is impossible for an airline to fly when its mission critical crew scheduling system fails. In case of Comair, this IT failure resulted in a loss of approx $20 million which was actually wiping out it previous quarter earning of $25.7 million. This report is a study in the Comair Information systems and highlights the gaps between the IT strategy and business strategy. The report also attempts to suggest an information system which can take care of the gaps between business and IT strategy so that such failures as mentioned above are prevented as much as possible as well as identifies the people, technology and organization issues which Comair must take into account before building a resilient information system. 2.0 Comair Information Systems Comair information system was purchased from SBS international in the year 1986 after union and federal regulations forced Comair to meet higher standards in its management procedures. To comply with the regulations, Comair leased software from SBS International to track & schedule its flight crews. The system worked admirably and was a welcome relief for the staff who were managing the schedule using the pen & paper until then. As the business started growing, Comair felt a need to upgrade its information system as the existing system was written in FORTRAN for which there was no in-house expertise available. Moreover it was the only system using old IBM AIX platform compared to current HP UNIX. Following table lists down the milestones in Comair’s IT journey until Dec 24, 2004 against their business strategy. Year Milestone IT Strategy for Crew scheduling software Business Strategy 1977 Comair started None. Crew was scheduled using pen & paper To be the regional airline 1984 Alliance with Delta ---- do ---- DELTA connection program 1986 Federal Aviation Administration safety regulations for effective management of Crew time in the 24 hour window SBS international legacy system purchased To march towards the top of the industry 1996 Other airlines started adding jets to their fleet and hence blunting the advantage Comair gained by adding Bombardier regional jet, two years earlier. Need felt to upgrade the Crew scheduling system but nothing was done on the face of various people issues To gain a competitive edge by improving identified bottlenecks like SBS legacy system 2004 Comair’s crew scheduling software crashed ---- do--- ---- do --- 2.1.1 Gaps between Comair business and technology strategy As can be clearly seen from the comparative table in the previous section esp. the events in 1996 and 2004, there were huge gaps in translation of Comair’s business strategy into the IT strategy. The gaps can be identified as below – 1. Lack of knowledge on Software maintenance: Comair was aware that the SBS international’s software was written in FORTRAN; still they did not have the relevant technical support. In spite of constant pressure from business to make IT a competitive weapon, the IT strategist of Comair chose to look in other direction. This resulted in IT losing its edge to support the business strategy which was to enhance the revenue which means more crew, more aircrafts, more scheduling and hence more scheduling changes. Thus dangerously lurking towards the impending disaster of reaching the software limit sooner or later ! 2. Lack of awareness on System limitation: On the business strategy Comair wanted to compete with the other regional airlines while on the IT Strategy no body was aware about the critical system limitation that the software can not handle more than a fixed number of schedule changes. 3. No business continuity plan for any IT breakdown: Comair wanted to become highly competitive in the area of their operations without really having a BCP for information systems. This oversight came back to haunt them on the fateful day when their mission critical system failed leaving their operation paralysed because of lack of any backup system. 4. Key IT inputs not taken to define business strategy: This is quite evident from the case that even though IT had become key business driver to enhance various parameters of business success in the twenty years of purchasing SBS international package but Comair did not suitably modify the decision making processes so as to ensure participation and key inputs from IT and IT risks. 5. Tendency to keep IT Risk management on the backburner: Even though in some situations business leaders of Comair tried to bridge the gaps between the business and IT strategy, they couldn’t succeed because of unforeseen situations like Delta acquiring Comair, Director of Risk & IT left the organisation, pilots strike etc. This essentially portrays the low priority business leaders of Comair gave to managing the risks associated with the IT systems they were using. 3.1 How Comair should have developed their Information system A computer based information system refers to an application package which provides the facility to store and retrieve data along with automating some of the information processing tasks in an organisation. There are various types of information systems as give below – TPS or transaction processing systems MIS or Management information systems DSS or Decision support systems BI or Business intelligence (also know as ETL or extraction, transformation and loading) The airlines industry can be broadly classified into Transaction processing systems. The following sections talks about the process involved in the development of Information systems as well as the scalability, risk management and organisational aspects of the suggested information system. 3.1.1 Developing the new information system The diagram on the next page represents the process involved to develop a system to take care of existing flaws in it. The system would be developed considering the following parameters - Scalability Ease of maintenance Integration with the other mission critical application Warning to the operator on the impending limitation MIS reports highlighting the usage with details on what may happen if critical patches are not installed Diagram 1: Process to develop new Information system The above diagram lays the process which can be utilised to develop an Information System which not only takes care of the exposed breakdown issue but also it can identify more items which might be hidden somewhere in the package waiting to be discovered on another fateful day. The model in the above diagram addresses the requirement to develop the system matching the current needs along with the future scalability option by selecting the performance goals and consistent improvement focus with a feedback loop in place to point the gaps between the goals and results. 3.1.2 Selecting the right technology After identifying the software specification through the diagram 1, the next step is to identify the technology which can deliver the expected system. In case of Comair, they were still operating on FORTRAN and old IBM AIX platform. This resulted in a gap where it was difficult to find out the programmers of FORTRAN within the organisation when it was needed the most. Following diagram is useful in identifying the right technology for the right specification. Diagram 2: Selecting the right technology 3.1.3 Organisational aspects of Information technology Management Developing the right Information technology package for the business is not the end of the process. The system developed must be neatly tied up with the organisation management and business strategy development. Information technology strategy must be derived from the business strategy and the business strategy must be developed in consultation and awareness of the limitation of system in place. If the business needs to scale up, the Information systems must also be upgraded to keep pace with the higher volumes of growth. The organisation should be structured in a way that CIO (Chief Information officer) of the company is part of the meeting where the business strategy is being formulated, results are being discussed and enhancement to volume is being discussed. His advice must be sought on whether the Information system would be able to take the additional burden due to expected increase in transaction volume. If the CIO raises a red flag over a certain proposal then either the systems must be upgraded to manage the additional volumes or the proposal must be held until CIO approves. CIO on his part must answer following questions before accepting any new proposal which results in additional transaction volumes on the Information systems on following aspects: 1. Whether the systems would be able to absorb the additional data generated 2. Will the additional volume result in slowdown of the response time to the GUI user 3. Will the suggested business strategy compromise with the existing architecture of the Systems 4. Is the BCP plan in place and regularly visited to ensure that people are aware of their responsibilities during the breakdowns 5. On a proactive basis CIO should survey the market to identify any gaps between the platforms being used in the organisation and the ones available in market 4.1 People, organisation and Technology issues There are several people, organisation and technology issues which Comair must consider if it chooses to develop an Information system. 4.1.1 People issues in developing a new IT system at Comair Thorough internal analysis to identify Core strength e.g. quality and quantity of resources available and the distinctive competencies. In case of Comair, they had very good business metrics which were widely appreciated by trade magazines. In addition to above it is also important to identify the weaknesses i.e. In-adequate resources, managerial and organisational deficiencies etc. Comair failed to take note of the inadequacy of people in the organisation to support the archaic legacy system and hence nobody could sense the impending disaster. Comair should also focus on building an effective knowledge management system so that IT support staff and others are aware about the system they are supporting and the kind of limitation or dependencies it has. The KM system may look like below diagram – Diagram 3: Proposed EL (Employees learning) System at Comair 4.1.2 Organisational issues in developing a new IT system at Comair Following aspects must be kept in mind regarding the organisational issues in developing a new IT system at Comair – Business strategy and technology strategy must be integrated and developed in coherence. In fact, the highest decision making body of the organisation must consist of people drawn from all areas but representation from IT department must be mandatory. Any IT development must be a justified expense while no business area must be developed with cascading development in IT. One of the well researched Harvard study in the subject notes that the most Information Technology risks in an organisation arise from the failure of the enterprise’s IT governance processes and not because of any on-the-ground worker issues or any complex technical phenomenon. Any IT governance failure results in a cascading effect of not-so-good decisions. Hence organisations having a dependency on IT must ensure that they have effective IT governance, controlled complexity in the system, and full exposure to the risks with a relevant mitigation plan. Ignored IT risk, over a passage of time results in various risk-blinded actions which cumulatively create the conditions for chaos and potential of a runaway risk incidents increase. This is exactly what happened with Comair where a disaster was waiting to be happening. Two more aspects which need to be taken care are attention to risk and controlled complexity. Lack of attention to risk increases chances of operational failure. Everyone involved in managing IT risk must think differently. It the job of CIO (Chief Information Officer) to make the business results of IT risk apparent to business executives. The CIO should provide an environment where such discussion can take place executives can brainstorm on the IT risk in terms of business impact. Business executives on their part give a full visibility to CIO of the business strategy and any changes therein. 4.1.3 Technology issues in developing a new IT system at Comair It is important to note that the IT risk to an organisation increases simultaneously with the investment in the high end IT product. A firm becomes dependent on the smooth functioning of a sophisticated IT system by utilising it for its key processes, competitive efficiency thereby increasing their vulnerability to external threats. Following diagram illustrates the process of integrating the business strategy and the Information systems strategy of an organisation. Diagram 4: Process to integrate business strategy with IT to tackle organisational issues Work Cited: 1. Baldwin, Howard (2009) The Expanding Boundaries of Risk Management [Internet], Available from: [Accessed 20 May 2009]. 2. Ciborra, C. (2002). The Labyrinths of Information: Challenging the Wisdom of Systems. Oxford, UK: Oxford University Press 3. Galliers, R.D., Markus, M.L., & Newell, S. (Eds) (2006). Exploring Information Systems Research Approaches. New York, NY: Routledge. 4. Kock, N., Gray, P., Hoving, R., Klein, H., Myers, M., & Rockart, J. (2002). Information Systems Research Relevance Revisited: Subtle Accomplishment, Unfulfilled Promise, or Serial Hypocrisy? Communications of the Association for Information Systems, 330-346. 5. Langefors, Börje (1973). Theoretical Analysis of Information Systems. Auerbach. ISBN 0-87769-151-7.  6. Laudon, Jane P.& Laudon, Kenneth C. (2007) Essentials of Business Information Systems 7th Edn , Prentice Hall. 7. 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