British Airways CIO: Paul Coby

INTRO (TH): When Paul Coby became British Airways CIO five years ago, the airline's very existence was under threat as a financial crisis engulfed the entire travel industry following the 9/11 terrorist attacks.

Five years on, and despite rising fuel prices and competition from no-frills airlines, BA's turnaround is nothing short of remarkable, with annual profits up 21 per cent to 620m.

We recently caught up with BA's CIO, at the airline's headquarters by Heathrow Airport.

TH: Paul, it's been quite a turnaround, can you tell us exactly how technology has been central to the revival of BA's fortunes?

PC: Technology's been fundamental to BA's turnaround. We've had to reinvent ourselves over the last five years since 9/11 and I think we're going to have to reinvent ourselves again as we go forward and technology's been a fantastic leader to do that in terms of driving great customer service, taking cost out of the business and inspiring our employees.

TH: How easy has it been to have the culture of innovation within a climate of radical cost-cutting across the board?

PC: If you face great challenges, you need to reinvent your business, so, you know, one of the key things we had to do because the no-frills carriers - I don't say low-cost because we're as low-cost as them on most days - the no-frills carriers had really eaten our breakfast and were about to eat our lunch. So what we had to do was to reinvent, innovate the way that we sell things and that's what we did post 9/11 by developing something that we call 'Calendar-led selling': putting the best fares up on the web. To do that we had to develop a website, we had to change the way we sell and we had to do some pretty fancy IT as well.

TH: When you do innovate is that part of a broader culture of innovation or is tech innovation seen as quite separate?

PC: It's disastrous to have tech innovation as a separate thing. You can have some great ideas in the corner but it's about changing the business that matters. So I talked about our BA.com Calendar-Led Selling - that was a combined effort between the IT department who developed the selling online, the way we do fares, it was the revenue management folks and the pricing people who developed absolutely new ways of doing pricing and it was the marketing folks who then got the message out on the streets. So it's the whole airline working together and that's the key thing. It's about how you use technology to change your business and move the business forward, to address the challenges that the business has got. If you do it on your own it's not worth the time.

TH: So the integration is absolutely key then?

PC: Yeah, I mean that's the point isn't it? We're the IT department of British Airways; we're not a research department for god's sake. So it's remembering that we're the IT department, that's why we exist, that's our sole reason for doing, is to provide the technology and the solutions in the business change that the airline needs to be successful.

TH: Now of course, BA.com has been absolutely essential to your recent success. Can you tell us what sort of customer services you're trying to web-enable or make self-service for the future?

PC: What we did with BA.com originally was to take the no-frills carriers head-on, draw a line in the sand and fight back. And that's what we've done. And last year our short-haul business was profitable for the first time that it has been in 10 years and a large part of that is to do with BA.com. But what we were keen to do was not just sell online but to provide every interaction between our customers, between you our customers and British Airways should be so easy you'd want to serve yourself online. So what we did was we simplified our fares, we enabled you to upgrade, we enabled you to book a seat and one of the things that's really going great guns at the moment which is print your own boarding pass at home and do online check-in and people absolutely love that because 24 hours before you fly you can go onto BA.com, you can bring up your booking, you can choose your seat, you can print your own boarding pass and that takes a lot of the issues out of going through the airport, which is, of course, one of the enormous challenges that we all face at the moment.

TH: How much of the innovation is really customer-facing and how much goes on at the back-end, the big sort of systems stuff that no one really sees?

PC: Well I said we'd have to reinvent ourselves again in the next five years and one of the things I'm keen to do is to look how we reinvent the airline back-office because we've changed things at the front so we've now got nearly 90 per cent, nine out of 10 people have e-tickets globally on British Airways. So this changes all those passenger revenue accounting systems that you've got at the back-end. Now making that change is very difficult but I see simplification and standardisation bringing great benefits there as well and that's something we'll be looking at in the future.

TH: Web 2.0 is a huge buzzword right now. How important is it for CIOs to tap into the kind of consumerisation of technologies and all those sorts of interesting things going on?

PC: Well I'm going to be using BA.com 2.0 for the forthcoming business plan and, as you say, we've already done it with Google Maps [actually Earth]. And, if you like, it's a god-given opportunity because it combines the great visualisation, the great Google maps product, with our great fares so you put the two together; you produce a real, impactful thing. This came out of the marketing guys and we worked very closely with my IT folk on BA.com and put it together. So, if you like, it's another great example of the whole airline working together for smart use of technology. It's fantastic when the business line departments have a great idea and say 'how can you do it?'. Now our challenge is then to respond to it fast and quickly enough in order to produce the sort of thing you've seen with the current World Office campaign, which features Google Maps, and encourage everybody to go and look at it at the moment.

TH: Is there an element though where you really feel the CIO's office should have been leading that co-operation with Mountain View or should it have been OK to work with other parts of the business?

PC: No I feel great about it because it's people getting it, that's the whole point. My job is not to be the only person who thinks about how you can use technology. My job is to stimulate the airline and how we do that and we've got some great concepts coming up on that that we're being party to and dynamic packaging - how we put together air fares and hotels and car hire - is something that we're working on with the businesses at the moment. But that's success. This is the whole business knowing that it's actually founded on technology, thinking how it can exploit it and then us all working together to deliver a great product. That's success.

TH: Now, of course, a lot of us know that Terminal 5 is going to be a huge part of the future life at Heathrow Airport and, of course, British Airways will be the main tenant. Can you tell us what the technology challenges are of a project of that scale?

PC: They're enormous. It's by far our biggest infrastructure project so there's basically wiring and wireless-ing it. There's making sure the new kit will work and we've got a target of four out of every five passengers will either check-in online, as I've mentioned before, or use a self-service kiosk and there's going to be a bank of 90 of them when you come in with fast-bag drops immediately behind them and then customer service desks behind that. So completely new processes and how we do things, completely new management control systems and so the way we allocate resources, we manage people within Terminal 5. We're putting in new sweeper systems that will be put in 12 months before we actually move in and thoroughly tested. One of the most exciting things is that we've worked with the business in order to look at the business process changes and I was talking to my colleagues on the BA leadership team about this earlier this month and we've used lean processes, which are used widely in the manufacturing industry very successfully. But in order for the basic customer flow through the new airport we've worked with the business and we've worked with the actual staff on the front line and held workshops with the baggage handlers and the check-in agents and everybody who'll work in T5 to understand the processes, document them, right down to the lowest level so they'll be guides for how people will load the plane, that we've worked with the business on. Now, having defined the process we've then put the systems behind those. So this is a great example of actually focusing on what the business needs, then defining systems and then defining the infrastructure to support the systems for Terminal 5. So, I'm really proud of the way we've been fundamental to that but it's a heck of a challenge when it opens in March 2008.

TH: OK Paul, and if you could finally give us the future vision, long-term vision. Where is airline information technology going, whether it's on the ground or even in the air. Where do you really see the future?

PC: Well I think the really exciting thing about the airline industry is the way that its embraced technology and, going back to where we came in, it's probably had to given the challenges it had because we had to improve customer service and reduce cost. And that's what technology enables you to do. You can actually produce a much better product and you can do it at much lower cost using technology and that's what we've done with BA.com, that's what we're going to do with how you go through Terminal 5 and I think in every touch point whether on the ground and potentially in the air, though who knows how that will work out, we're going to see technology playing an absolutely fundamental part in how airlines enrich the customer experience.

TH: So, for you, it really is all about business value and not worrying about the bits and bytes?

PC: Yeah, I said five years ago there are no IT projects, only business projects. When you Google me that's the one thing that does come up and that's the one thing that's really stuck because I really believe it to be true.

TH: Paul Coby, thank you very much.

PC: Thank you.