CIO: In June last year you replaced Grainne Kearns, who had restructured Jetstar’s IT team and put into action a transformation plan made up of 21 initiatives. Kearns moved the organisation from a cost-driven start-up where teams were executing in silos to behaving more like an enterprise. Where are you taking the organisation from here?
Ogilvie: Jetstar has always been a fast growing/evolving organisation. We’ve moved from a siloed start-up to an enterprise model, and this has created a foundation for the team to take the next steps.
These include creating a business-focussed and strategically-aligned technology function, supporting and also helping the business drive its strategic directives; and continuously improving our operational model and effectiveness of our technology function to support Jetstar-branded airlines and the broader Qantas group.
We have moved from operating separately from the rest of the Qantas Group to exploring synergies, i.e., major contracts with companies like Telstra, and leveraging economies of scale. Qantas is becoming increasingly lean and efficient and has much to learn from Jetstar’s low cost history and evolution.
Jetstar has grown into an organisation of a size that demands mature systems and processes but is no less agile and cost-effective and can learn from Qantas Airlines’ and Qantas Loyalty’s journey. We are aiming to adopt the best of both worlds and apply it to enhance the value proposition offered by the Jetstar brand.
Finally, technology is the launch pad for innovation at Jetstar. Our innovation framework is focusing on achieving specific strategic outcomes. These include improving customer experience and employee engagement, which helps us grow (particularly in Asia), providing the lowest, most affordable fares by keeping our TCO low, and innovating with the business through automation etc.
CIO: In the past, Jetstar has had a heavily outsourced model with a lean internal IT capability. Kearns said in 2014 at the beginning of the transformation that outsourced work should be brought back in-house. Has this happened? What’s the split between in-house and outsourced services?
Ogilvie: We need to ensure we maintain strong technical leadership, retain corporate IP and business knowledge and relationships in-house. This was a focus when I built my current team shortly after joining Jetstar.
Another consideration is balancing the need for ongoing business-as-usual resources (cost savings in permanent versus contract staff), having the ability to up-scale and down quickly (speed to value), and culture change (the ability to be agile and work differently).
The percentage split is less important than ensuring the latter. If we can get the balance right, it will create competitiveness.
CIO: You recently signed an outsourcing agreement with HCL. What services is the outsourcer providing to Jetstar?
Ogilvie: HCL is providing infrastructure, operations and client services (service desk) to Jetstar. It can provide these services more cost-effectively and efficiently than through an internalised model. In the past, these services were partly in-house and partly outsourced to a number of providers. We saw benefits in simplifying the model and consolidating services under one provider.
CIO: Jetstar recently appointed Yvette Lejins as head of cyber security. What were the reasons for her appointment? How important is the airline’s cyber security strategy going forward?
Ogilvie: Cyber security is an important part of any organisation where technology is an integral part of the business model. As Jetstar has grown and matured as an organisation, it makes sense to elevate the cyber security role to a visible and senior part of Jetstar’s team. Cyber security is also an increasingly important enabler to evolving our technology landscape while mitigating the associated risk. It’s dynamic and fast changing, which means we need strong internal leadership to stay on the ball.
CIO: Are you adding technology staff in other areas too?
Ogilvie: Only where it makes sense to keep the IP in-house and where the business knowledge and leadership is important to our competitiveness as a low cost airline. Recent changes to the IT team are a realignment to Jetstar’s evolving business rather than any expansion.
CIO: Qantas is building in-house software expertise, working on placing API layers in front of legacy systems. Is Jetstar doing the same with the Axway API gateway? Which software capabilities are you keeping in-house and which ones are being outsourced?
Ogilvie: Both Jetstar and Qantas use the Axway API gateway, however Jetstar’s technology environment is quite different to the Qantas environment. We have internalised some technical leadership (technical support, configuration and optimisation), and integration will continue to be important. However, at this stage I don’t see Jetstar building out a particularly large team in this space.
Wherever possible, we will adopt off-the-shelf solutions which are fit-for-purpose rather than a premium product. This helps us stay agile and low-cost, which is important. Where software opportunities do arise that align with Jetstar’s strategy, we will explore how we can best leverage Jetstar’s and Qantas’ resources while not duplicating our capabilities and making sure we stay as lean as possible.
CIO: What innovations are planned in the coming months? Artificial intelligence and machine learning technologies are being talked about quite a lot so far this year. Does Jetstar have plans to utilise these technologies?
Ogilvie: Innovation is an integral part of our culture. We are focusing our innovation on growth across Asia with technology as a leader and enabler to improve customer experience and employee engagement. Cabin crew and airport staff are equipped with iPads, and we are supporting operations to deliver on time performance and net promoter scores to automate and remove human error.
We will continue to invest in infrastructure with cloud so we remain flexible and agile; while improving decision making and technical direction and ensuring it aligns with our business strategy.
We also have Jess, our virtual assistant, and will evolve towards using robotics to improve the customer experience, provide efficiencies and cost savings. We are investigating ways to better automate operational processes to reduce cost and human error to improve compliance and minimise rework.
Follow Byron Connolly on Twitter: @ByronConnolly
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.