Southwest Airlines
Operating Model Analysis
MISST Project 6
Sarah Stottsberry
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Largest U.S. Airline in terms of Passengers Flown
32,000 Employees
Based in Dallas Texas
Corporate Structure
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Operations
Strategy, Procurement, and Technology
Internal Audit
Schedule Planning
Law, Airports, and Public Affairs
Finance
Revenue Management
Corporate Communications
Labor & Employee Relations
People &Leadership Development
Corporate Security
Customer Relations and Rapid Rewards
Marketing Sales & Distribution
Reservations
Customer Communications
Statistics
1970’s use of Cash Registers
 IT use is initially Low: Main focus was on
maximizing revenues
 1990’s Fuel Costs Spike and competition
increases. Efficiency is now more
important.
 Focus turned to IT to help improve
efficiency by 2002
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Brief History
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Silos were widespread throughout the
organization
Multiple Databases
Various Technologies used by departments
Groups of technologists were in business
areas
◦ Interactive marketing group who did
Southwest.com.
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Each group used their own technolgies, tools,
and languages
System Outages were common
Before Transformation
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In the words of CEO Gary Kelly on the
need to close the gap…
◦ “It was very logical things. We all had to agree
that we were going to have one foundation
instead of ten. We needed one version of the
truth, not multiple database full of fares,
multiple copies of the schedule, multiple this,
multiple that. We’d had all these siloed
technologies that had been created over time
and just sort of glued together”
Before Transformation Cont.
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Technology Changes
◦ Overhaul of the IT unit
◦ Design and Implementation of a Technology
Foundation
◦ Prioritization and Delivery of new systems
The Transformation
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Centralized all technologists under CIO
Staff numbers were reduced from 1200 to
890
Job titles decrease from 140 to 30
Staff performance monitored by standard
processes
Converted to Standard Set of Tools and
Processes
Fixing the Technology
Organization
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Focus initially on key applications
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Focus turns to Silos by identifying Styles and Stacks
◦ New Testing methodology
◦ Addressed needs like power, redundancy, and backup
◦ Styles: Types of applications(transaction, historical,
analytical)
◦ Stacks: Technology components, development that support
the “styles”
 Main Objective was to solve problems with a standard “stack”,
but to compromise when needed.
 Architecture Working Group under CTO has control to make the
decision.
 Renegotiated contracts with computer vendors
 Implemented a desktop refresh plan
 Analysis of Help desk call to identify needed application fixes.
Technology Foundation
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Focus turned to Sacred Transactions
◦ Two-year project to rewrite reservation system
◦ Engaged Business Managers since they could
help define IT priorities
 Business Strategy Teams(12-15 Senior Managers)
 By 2007, 80% of projects aligned with a team
 Business leaders were involved in delivery and
implementation process
 Tollgate Process: Phase-End review of project
progress with team
Prioritization and Delivery.
“Change Initiatives” group initially
reported to CEO
 Goal was to drive major projects at SWA
 Technology leaders played dominant role
initially
 Core Systems
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Booking Engine
Crew Scheduling
Internet Based Customer Service
Employee Benefits
Changing SWA
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Ownership of change initiatives moved to
business leaders once foundation was in place
“Redefining Excellence”
◦ Initiative of Ground Operations
◦ Largest of the departments with 11,000 employees
◦ Redesign of processes across airport
Ticket Counters
Boarding
Baggage handling
Kicked off in Phoenix
By 2007, Phoenix, Chicago, Baltimore, and Las Vegas
were on board
 Now the Team of 45 people works with 2 airports at a
time
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Changing SWA Cont.
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Customer Relationship Management
◦ Umbrella project to consolidate the 40 icons to
1
◦ Collapse isolated systems into single modular
system with all capabilities +
Changing SWA Cont.
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Technology Department considered
implications of potential changes as
company grows
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Assigned seating
Codeshare agreements
International Travel
Industry standards in communication (ATA
Airlines)
The Future
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Coordination Model
◦ Low Standardization, High Integration
◦ Core Processes are standardized
 HR Processes
 Customer Relationship Management
◦ Business Units have unique processes
 Try to use standard “stacks” but are not opposed
to allowing for unique systems
◦ IT Decisions, Prioritization, and Implementation
occur at business level
◦ Central IT department to support those
decisions
Conclusion
Building Business Agility at Southwest
:Massachusetts Institute of Technology:
http://dspace.mit.edu/handle/1721.1/396
46
 Information Systems Strategy in Air
Transport: Naval Acadey Term Paper
:http://oai.dtic.mil/oai/oai?verb=getRecor
d&metadataPrefix=html&identifier=ADA27
3125
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References