Virgin Blue flags Oracle outsourcing

The nation's number two airline Virgin Blue has revealed it will shortly outsource the management of its key Oracle E-Business applications following a major upgrade of the systems.
Written by Liam Tung, Contributing Writer

The nation's number two airline Virgin Blue has revealed it will shortly outsource the management of its key Oracle E-Business applications following a major upgrade of the systems.


Virgin Blue CIO David Harvey
(Credit: Virgin Blue)

"We're close to locking in a contract to have some of our core production systems managed," Virgin Blue chief information officer David Harvey told ZDNet.com.au late last week, saying the deal would cover remote management of systems, and the monitoring of infrastructure "from the database down".

"We're in the final throes of making a decision," he said.

The move will see Virgin Blue follow in the footsteps of its rival Qantas, which in late 2006 inked several hundred million dollars worth of application support deals with Indian outsourcers Satyam and Tata, in addition to Perth-based firm ASG.

Harvey said Virgin Blue had recently completed major work on the applications. "We've completed a full turnkey upgrade of our Oracle e-business systems with a third party, which focused on infrastructure and our application suite," he said. "We're now looking at engaging suppliers for it to be outsourced."

The airline's culture has always been "to do everything internally", according to Harvey. However, recently it had taken small steps towards outsourcing key systems to allow internal staff to focus on core projects, including Virgin Blue's planned international service, V Australia, which will see the airline launch flights to Los Angeles' LAX airport in December this year.

Additionally, Virgin Blue's head office move this year to a new location in Brisbane had been a catalyst to seek other managed services, the CIO said. The airline's Avaya-based telephony systems were currently being managed by communications integrator NSC.

"Now we're looking at the desktop and multifunctional devices," said Harvey.

However, Virgin Blue has not attempted to downsize its IT operations by pursuing more managed service options. The airline's core technology projects are spearheaded by a team of 200 people, which consists of around 60 contractors.

We're in the final throes of making a decision.

David Harvey

"This is not a sweeping outsourcing move. We're selectively picking pieces to outsource," he said. "We still have a desire to have internal people apply to IT to things that can differentiate the business but as the business grows we'd prefer not to add more numbers to the IT team."

Harvey said Virgin Blue still lacked much of the core requirements it needed from its back-end systems to operate the V Australia business, which is what its internal IT teams will focus on until the latter part of the year.

"That project will run until wheels up," he said.

Reservation system waits in the wings
Outsourcing is not the only major decision hanging over Harvey's head in the coming weeks as Virgin secures a new reservation system for its domestic flights.

"We're in the final stages of selecting a new reservation platform [for the domestic business]. This is a very critical decision that we hope to make within the next few weeks," he said.

The new reservation system won't, however, affect the airline's V Australia plans. Last year Virgin Blue selected Amadeus for its reservation and e-ticketing systems to cater for its short haul business, Pacific Blue. It will also be used for its V Australia business.

Virgin Blue has also completed a "multi-million dollar" data warehouse project using Cognos reporting tools.

"It's been a huge success for a data warehousing project, which can flounder a bit but this one came in on time and under budget," said Harvey.

"There were few false starts early on in the project, and we've been working on it pretty much for the past year," he said.

"We're taking a lot of the detailed data about Virgin Blue flights and from our existing reservation system to put into multidimensional cubes to allow better decisions."

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