Qantas

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Revenue Interface Application Integrates 36 Systems at Qantas

The Challenge

Airlines are dependent on accurate, timely data. In today's competitive environment, some of the most critical of that data concerns revenue. Revenue - past, present and future - impacts pricing, route selection and even fleet planning. So when Qantas, Australia's largest airline, merged their international operation with a domestic airline and found themselves wrestling information among multiple data systems, something had to be done. The existing architecture was complex, slow, costly to operate and not very reliable. The response was IRIS, the Integrated Revenue Information Solution.

The IRIS program is a complete re-engineering of revenue-related business processes. It included a widely-used airline revenue accounting system and outsourcing of document processing, both important steps toward streamlining revenue reporting. But one critical problem remained. The central database still had to communicate with 36 downstream systems. Doing this directly from the new revenue accounting system would have required 100 separate file feeds, a design Doug Meagher of Qantas describes as "nightmarish." Implementation and maintenance costs would have been unacceptably high.

The Solution

For assistance in the complex interface to downstream systems, Qantas turned to DMR Consulting, *a Fujitsu company. Together, they developed the Revenue Interface Application (RIA), a sophisticated data repository integrated with the corporate data warehouse. This architecture not only simplifies revenue information management, but also provides a solid foundation for future, revenue-related applications.

Ultimately, 18 separate systems currently in use will be decommissioned. In their place will be just two systems: the revenue accounting system and the RIA. The RIA project is being implemented in four phases.

Phase One was identifying project scope

Phase Two was requirements analysis, examination of options, and strategy development

Phase Three was development of the architecture and a business case Phase Four will be final implementation

The Impact

Once the implementation is complete, the new system will provide a number of benefits. The commercial division, of which the sales organization is part, will be one of the prime beneficiaries. Qantas is facing two new domestic competitors as well as international competitors. This makes fare pricing more complicated than ever. Currently, actual revenue data arrives far too late to be of real use, so pricing decisions are based largely on projections. With the RIA in place, actual revenue figures should become an important part of the process.

With the new emphasis on outsourcing of document processing, RIA will also provide a valuable tool for vendor monitoring and control. "We'll be able to access all the data from a single repository and monitor quality," says Meagher.

Another function that will benefit is "interline settlement," the division of revenue between airlines when one airline books an itinerary that involves other airlines' flights. Some of those revenue divisions are based on industry-standard agreements. Others are negotiated between the carriers involved. According to Meagher, "Qantas managers negotiating those deals with other carriers could use the RIA information to improve the effectiveness of their negotiations."

Meagher also sees value in what he calls "the richness of the data." "You have two or three years of data to analyze," he says, "and you can develop the capability to see what would have happened if you had done one deal rather than another, or even a new deal that is being proposed."

The Longer-term Benefits

Over time, the RIA will allow the sales organization to fine-tune its planning and forecasting. Today, the sales organization uses a variety of means to predict actual revenues. Actual revenue data will allow them to quickly measure the accuracy of these forecasts and correct their predictive tools to make them more valid and accurate. Since either overbooking or under-booking can be expensive, this improved accuracy could be an important revenue enhancer.

If Meagher sounds as much like a financial analyst as an IT specialist it's because he is. "I'm a chartered accountant (CPA) by training," he says. "I headed up the airline's computer audit group for about two-and-a-half years, and then was asked to move to this project as business manager, looking out for the company's interests. I kept focusing on the benefits, which was something I largely learned from the DMR guys on a previous project in audit. It was a project called 'Qube' and was very successful."

The Implementation

Keeping in-house customers happy and ensuring a positive end result is a challenge. Meagher emphasizes the importance of communicating with all impacted groups, documenting their concerns and communicating back to them. At the same time, he stresses the importance of discipline - containing the scope of the design. "We're giving them something of value today," he says, "while laying the foundation for something better in the future."

To help ensure acceptance of the new system, Meagher will be creating a 60-person implementation team made up equally of people from Qantas and DMR. "It's being seen as an in-house managed project," he says. "The DMR staff are being very flexible and very generous in sharing their resources, even in areas for which they are not directly responsible. Their performance has been fantastic."

Client Information

Qantas is the world's second oldest airline, and the oldest airline in the English-speaking world. It was founded in the Queensland outback in 1920. Qantas is recognized as one of the world's leading long distance airlines, having pioneered services from Australia to North America and Europe. Qantas operates approximately 590 international services each week and is also Australia's leading domestic airline, operating an average of 4,400 flights a week serving all Australian states and mainland territories. Qantas employs nearly 30,000 staff across a network which spans more than 130 destinations in Australia, Africa, the Americas, Asia, UK/Europe, and the Pacific.

* Renamed "Fujitsu Consulting" in the US and Canada.