JetBlue and WestJet: A Tale of 2 I.S.

Projects
• JetBlue was incorporated in 1998 and founded in 1999 by
David Neeleman.
• The company is headquartered in Queens, New York and
flies to 63 destinations in 21 states and eleven countries in
the Caribbean, South America and Latin America.
• JetBlue’s goal has been to provide low-cost travel along
with unique amenities like TV in every seat, and its heavy
reliance on information technology throughout the
business was a critical factor in achieving that goal.
• JetBlue met with early success and continued to grow at a
rapid pace, consistently ranking at the top of customer
satisfaction surveys for U.S. airlines.
 JetBlue and WestJet: A Tale of 2 I.S.
Projects
• Headquartered in Calgary, Canada, WestJet was founded by
a group of airline industry veterans in 1996, including
Neeleman, who left to start JetBlue shortly thereafter.
• The company began with approximately 40 employees and
three aircraft.
• Today, the company has 7,800 employees and operates 420
flights per day to 71 destinations in Canada, the United
States, the Caribbean, and Mexico.
• Earlier in this decade, WestJet underwent rapid expansion
spurred by its early success and began adding more
Canadian destinations and then U.S. cities for its flights.
• By 2010, WestJet held nearly 40 percent of the Canadian
airline market, with Air Canada dropping to 55 percent.
 JetBlue and WestJet: A Tale of 2 I.S.
Projects
• The time had come for both JetBlue and
WestJet to upgrade their reservation systems
• Each carrier had started out using a system
designed for smaller start-up airlines, and
both needed more processing power to deal
with a far greater volume of customers.
• They also needed features like the ability to
link prices and seat inventories to other
airlines with whom they cooperated.
 JetBlue and WestJet: A Tale of 2 I.S.
Projects
• Both JetBlue and WestJet contracted with Sabre Holdings, one of
the most widely used airline IT providers, to upgrade their airline
reservation systems
• Sabre’s newest system, SabreSonic CSS, performs a broad array of
services for any airline.
– It sells seats, collects payments, allows customers to shop for flights on
the airline’s Web site, and provides an interface for communication
with reservation agents.
– Customers can use it to access airport kiosks, select specific seats,
check their bags, board, rebook, and receive refunds for flight
cancellations.
– All of the data generated by these transactions are stored centrally
within the system.
• JetBlue selected SabreSonic CSS over its legacy system developed
by Sabre rival Navitaire, and WestJet was upgrading from an older
Sabre reservation system of its own.
 JetBlue and WestJet: A Tale of 2 I.S.
Projects
• When WestJet went live with the new system
in October 2009, customers struggled to place
reservations
• The critical issue was the transfer of WestJet’s
840,000 files containing data on transactions
for past WestJet customers who had already
purchased flights, from WestJet’s old
reservation system servers to the new ones
 JetBlue and WestJet: A Tale of 2 I.S.
Projects
• In contrast, JetBlue learned from WestJet’s mistakes, and
built a backup Web site to prepare for the worst case
scenario
• The company also hired 500 temporary call center workers
to manage potential spikes in customer service calls
• WestJet also ended up hiring temporary offshore call center
workers, but only after the problem had gotten out of hand
• JetBlue made sure to switch its files over to Sabre’s servers
on a Friday night, because Saturday flight traffic is typically
very low
• JetBlue also sold smaller numbers of seats on the flights
that did take off that day.
 Approaches to Acquiring Information
Systems
Learning Outcome
• discuss the alternative approaches for
acquiring business information systems;
• evaluate the suitability of the various systems’
acquisition approaches for a particular set of
circumstances
 Introduction
• Organizations should have I.S. Strategy Policy
• If I.S. does not meet organization’s needs they
have to acquire or develop
– custom systems development
– purchasing ready-made systems
– application service providers
– end-user development
– hybrid approaches
 Custom Systems Development
• In House
– Qualified professionals available
– Qualified professionals have time
• Outsource
• Pros and Cons
– Customized
– Lengthy Process
– Could have many bugs
 Purchasing
• Increased availability of high quality sw packages
• Standard of Customized
• Advantages and Disadvantages
• Software already exists – it has already been used for similar problems
elsewhere, the organisation can try it out and also talk to existing users.
• Immediate system availability – shortening the time from the decision to
implement a system to the actual implementation; the risk of cost and schedule
over-runs is reduced.
• High quality – a software company specialises in developing its products and if
it does not produce high-quality software it will soon go out of business.
• Low price – software companies can spread the product development costs
over many units, so the cost to a single customer is a fraction of what it would
cost to develop a similar application from scratch.
• Available support – typically the purchaser can contract for long-term service,
which should include both telephone or online support in the case of problems
arising, as well as upgrades to newer versions of the system when they are
produced
 Application Service Providers
• Use of software via www
• Softwares are at the service providers location
• Cloud Computing
• Advantages and Disadvantages
– No mantainace
– No down time worry
– No hosting issues
– No install learning required
– Control is not there
– Modification is not easy
– Response time may be a problem
 End User Development
• Business professional develop applications
• Advanced softwares have enabled this
• Advantages and Disadvantages
– Shortened lead times
– Good fit to needs/culture
– Acquisition of skills
– Freeing up IS staff time
• End users are not as skilled
• End users may create private databases etc.
• Usually they don’t create documentation
 Hybrid Approaches
• Quite likely that an organization will adopt different approaches to
acquisition
• For generic business systems, such as operating systems software
or basic office productivity packages, ready-made software is
almost always purchased.
• But for more specific needs or where there is an opportunity to
achieve a competitive advantage by the use of information systems,
an organisation is more likely to choose to develop a custom-made
system or to customise a readymade application to its own
particular requirements.
• Where an organisation has existing legacy systems, there is always a
need for in-house legacy systems and systems purchased from
different vendors to be integrated and this can be quite a challenge.
• Insistence on the use of ‘open systems’, which can be used in
combination, makes this process easier.
Choosing an appropriate approach
Alternate Evaluation
 Other Criteria
There are a number of other criteria that the organisation should take into account when choosing the
best method of software acquisition:

• Size of the organization – the smaller the organization the more limited will be the resources for
purchasing information systems. Smaller organizations tend to purchase ready-made systems or
encourage end-user development.
• In-house IS expertise – if there is not much in-house IS expertise then outside vendors will have to be
used in the acquisition of new business information systems. This may take the form of outsourcing
custom development or buying a ready-made system.
• Uniqueness of the required system – if the business information system is for an unusual application
that is not available as a ready-made system then custom development will be the only solution. Some
very complex systems are not unique, so complexity is not necessarily an indicator that a ready-made
system will not be available.
• IS expertise among end-users – if there is a high level of IS expertise among users, then end-user
development becomes a possibility.
• Linkage with existing applications software – when new business software has to be integrated with
existing information systems, it is highly likely that some customization will have to be carried out to
integrate the two systems. However, it is possible to buy packages for different business areas that
integrate well with each other.
 Summary
• Acquisition refers to the approach for sourcing BIS.
Alternative acquisition methods include:
» custom systems development – build from scratch
» purchasing ready-made systems – purchasing from a
software vendor
» application service providers – leasing an application that is
hosted by the vendor
» end-user development – development of applications by
end users
• Complex and organization-wide BIS such as e-business
systems often require hybrid sourcing approaches and
enterprise applications integration of different
components from different vendor
 Key terms
• Custom systems development
• Bespoke systems development
• Outsourcing
• Ready-made systems
• Customised
• ASP
• End-user system development
Questions