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Story URL: http://management.silicon.com/itdirector/0,39024673,10004206,00.htm

British Airways slashes £50m off IT budget
Flies in face of travel industry crisis by completing cost cutting review early...

By Andy McCue

Published: Monday 19 May 2003

British Airways has completed a review of its IT operations that has taken £50m per year off the bottom line over a year ahead of schedule as part of a massive organisation-wide cost-cutting programme.

The airline reported better than expected results today that showed a £135m profit in the year ended 31 March compared with a £200m loss last year, despite the ongoing crisis in the travel industry due to terrorist attacks, the war in Iraq and the SARS virus.

In an exclusive interview with silicon.com BA's chief information officer, Paul Coby, revealed how the airline has taken major costs out of the IT infrastructure as part of a programme, IT21, implemented after the 11 September terrorist attacks.

"It was the IT department's contribution to saving the airline. We have over the lifetime of this programme significantly improved up-times, performance service level agreements and taken £50m out of the cost of running the department."

One of the key parts of the programme was consolidation, which saw 100 file and print servers being removed while 800 printers were reduced to 70. The costly IT contractor base was also slashed by 100.

A technical architecture team also identified redundant areas that had arisen through siloed departmental level IT developments in the past

Coby explained: "We actually mapped all our systems and this enabled us to have a purge of systems and we turned 40 significant systems off and 550 desktop applications. The next significant reduction is to turn off whole families of systems as we have got something of everything."

Despite these savings the crisis in the airline industry showing no signs of easing with the suspension of flights to Kenya because of terrorist threats this week, and Coby said he has already identified new areas for reducing costs.

This includes a possible voice over IP (VoIP) network and the reassessment of its mid-range Sun Solaris Unix mainframe environment to consider the options of Linux and Microsoft.

"It is a highly competitive market now and understanding total cost of ownership is fundamental."