Qantas' flight to change

newsmaker Qantas chief information officer Fiona Balfour is no sit-on-her-hands time-server. The holder of arguably the highest-profile tech management position in Australia is roughly midway through a far-reaching revamp of the airline's information technology operation, which saw infrastructure and telecommunications outsourced in May (to IBM and Telstra respectively in multi-year deals with a combined value of AU$1.

Fiona Balfour, Qantas
newsmaker Qantas chief information officer Fiona Balfour is no sit-on-her-hands time-server.

The holder of arguably the highest-profile tech management position in Australia is roughly midway through a far-reaching revamp of the airline's information technology operation, which saw infrastructure and telecommunications outsourced in May (to IBM and Telstra respectively in multi-year deals with a combined value of AU$1.4 billion) and staff organised into individual "practices" overseen by Qantas business systems -- a unit which handles managed services, IT business services and group IT.

These practices cover project management, business analysis, relationship management, architecture and IT specialist.

Over the next 12 to 18 months the airline is planning additional change, such as the relocation of its data centre to a Big Blue facility and Telstra's completion of an end-to-end Internet protocol network.

In an interview with ZDNet Australia , Balfour explains where the airline's IT operation is headed and what else it needs to do to reach its destination.

Q: You've said you wanted to shift Qantas IT from traditional IT to a professional services model. At what point is Qantas on this journey and what are some of the tools you've used to effect the cultural change required?
A: We're probably early in the execution or the implementation phase, but this has been a journey we've been on for a couple of years.

We set the strategy probably at the beginning of 2002. [This included] a number of key elements [including] the strategic decision to get out of our own infrastructure provisioning.

We made that call quite some time ago, but we had to go through an evaluation and RFI process with regard to the network and the data centre.

Those contracts were executed last May, but there was 18 months work that led up to that point.

Where we're going with our professional services model, again, we're probably 18 months into that story now and I think we've probably got another solid two years' work ahead of us.

This is about not only changing a culture, but also changing the way people work.

Those journeys don't happen overnight -- they are usually three-year journeys -- and where we've gone over the last 18 months is to set the strategy and to look at some ways to intervene to start the cultural change.

One of them has been the IT improvement program, which is focussed on, instead of people being put into positions where they're working on a technology in a particular business area, they're now assigned to various pieces of work or a project more typically. For example, instead of being a Cobol programmer in engineering, you're assigned to a role for a certain amount of time.

Those assignments are usually for a six- to 18-month period of time that's agreed upfront.

In addition, we used to have just annual performance appraisals of staff. We're now doing that biannually, [with] two people feeding into that process -- the person that you are reporting to on your assignment and your practice manager. What that's doing is providing staff with a much better feedback mechanism for the performance and the quality of the work they're doing and what we're finding is that this is helping us drive a performance culture through our organisation.

How well do you think you're managing the change process, particularly its impact on staff who can feel threatened by large-scale change?
Staff are telling us we're being pretty successful -- we ask [them] through survey methods. We have got a lot of change on at the moment and you're correct, managing it is very challenging, particularly when it's continuous.

Our industry is going through a whole heap of change and [experiencing] many challenges and threats. We're using various techniques and tools to explain our business plan to our staff.

One of those tools we're using is a strategy map, basically a one-page pictogram which depicts the business plan that we're on. That means that staff don't have to be used to reading business plans and nor do they get overburdened with too much PowerPoint.

But you've got a tool that they can learn to talk about themselves in their own words and they can tell the story of the journey that we're on. If your staff understand that they're part of a journey and if they begin to see various elements of the strategy come together, then actually coping with the change becomes much less challenging.

It's like if you're dumped in the country and told to find your way home. If you have a map, you're not scared, if you don't have a map, you are scared.

The same thing is true in business. If you've got a plan and everyone gets the plan, then when it gets challenging it means that you know what your options are in terms of dealing with those challenges.

You've looked to avoid the mistakes that are made in the whole of IT outsourcing deals by adopting this 'expertise in groups' approach [implemented through the IT improvement program]. How exactly does this approach drive a more productive relationship with your suppliers?
It means that they get to focus on what they do best and you get to focus on what you do best.

What we're trying to do ... [is have] a handful of key suppliers and I want them focussed on infrastructure, so that we can focus on where the value gets added, which is at the application level.

It's not IT itself that's strategic, it's what you do with it that's strategic.

Enabling business outcomes is our game, therefore where we should be focussing our expertise is delivering that change for our business colleagues.

You've flagged the widespread deployment of Linux throughout the organisation, primarily to replace Unix. Do you have idea where specifically you're going to do that, and are there any areas in which you'll be replacing Windows with Linux?
[The answers are] don't know, don't know.

We're just about to start.

Part of the proposition IBM made to us was when we decided to outsource our data centre. Because we had to physically move everything from the old Qantas data centre out to the IBM one, we tested whether we would be able to refresh onto Linux platforms.

Now the reality is that some of the applications we've got are going to be really easy to port across. A couple of them are already on Linux so it's not an issue.

However, there will be some of them which just won't work initially and it probably won't be worth the effort, so we think it'll be somewhere between 70 and 90 percent we'll move across.

Which 70 to 90 percent that is we're not sure yet, we're about to start the work on that. We're doing concept definitions and we'll allocate project managers in the new year, so we're some way off from knowing what that is.

What are your thoughts, if any, on deployment of Linux on Qantas desktops?
[We've] not gone to that space yet. We've got plenty of other stuff to do in the interim. It's not planned in the next 12 months. We might look at it after the next 12 months.

You're shifting to an end-to-end IP network -- whereabouts are you in the planning for that?
We're very advanced.

Probably 80 percent of our network would be end-to-end IP now.

It's the last 20 percent, which is typically our airport infrastructure, which is yet to be converted and it's the fingers in the airport -- all the terminal infrastructure, which is mixed at the moment, some of it's IP, some of it's not. It's driven historically by the types of applications out there.

We are not alone, most airlines are the same and most airlines are also doing what we're doing at the moment. We've got a window over next 12 to 18 months to get that finished.

You've increased your use of the Amadeus booking and airline system management product -- Altea Fly -- but have not yet finalised negotiations over the Altea Fly departure control product. When do you expect to do that?
We're expecting to conclude those at the back end of December.

Do you have any further plans to change staffing levels in the IT area at Qantas?
Staffing levels at the moment are about 700 in the applications space and I wouldn't see that changing, because at this stage we're not planning to do any additional outsourcing.

What we're planning to do at the moment is to focus our staff on project delivery and we've got more than enough demand for that number of staff. So we'll continue to focus on application delivery.

What we will need to do is get a certain group of our staff focusing on decommissioning our older legacy applications, because unless you decommission stuff you don't actually reap the savings.

Probably in 6 to 12 months time we'll probably have a very large group of people actually turning stuff off -- however I can't say how many.

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