Data Warehousing Strategy for Airlines, Banking, and BI

Strategic Information Systems and Airline Frequent Flyer Loyalty

In highly competitive industries such as airlines, where optimization of services, physical assets, and employees' roles and responsibilities must all be synchronized to deliver exceptional service, the use of strategic information systems is essential. For airlines to gain and keep customers, service must become their greatest differentiator. Because there are many aspects to service — from flight attendant performance to on-time delivery, to adherence to aircraft maintenance schedules — the ability to create customer loyalty depends on gaining a process-based view of information and service performance. Strategic information technology must deliver critical data into each customer-facing and customer-supporting process that airlines rely on to meet and exceed customer expectations, requiring information systems, architectures, and frameworks that ensure the data delivered is accurate, relevant, and actionable.

The progression of airlines from strong functional IT system designs, which created information silos, dramatically slowed their ability to fulfill customer requests for exceptions to standard processes. These processes included checking in to connecting flights, creating itineraries that incorporated third-party airlines, managing meal requests across thousands of daily flights, and managing and promoting customer loyalty programs to nurture and strengthen customer loyalty over time. It is important to note that strategic information is not limited to customer-facing initiatives — that is the specific role of Customer Relationship Management (CRM) systems. CRM systems are often used for creating and initiating customer loyalty programs and integrating customer-specific data with marketing strategies to increase customer lifetime loyalty. Delta's Medallion Program, for example, is managed by an enterprise-wide CRM system focused specifically on sustaining and strengthening customer loyalty over the long term. To the extent a CRM system is integrated with legacy and enterprise-wide databases containing customer-specific data, it can provide insightful information that serves as the foundation of loyalty programs. The intent of these programs is to inform, persuade, and reward airline customers to become frequent flyers.

CRM systems in airlines cover the critical business processes involved in attracting, selling to, and serving flyers, and in creating programs that lead customers toward greater loyalty over time. These strategies, however, do not operate in isolation — they require enterprise-wide support for the systems that deliver on the expectations set through advertising, public relations, branding, and prior customer experiences, both positive and negative.

Enterprise-wide systems manage the complex, integrated, and often difficult transactions that form the foundation of reservation and booking systems. For American Airlines, the SABRE system represents this type of enterprise-wide strategic information system. Apollo, from United Airlines, is another example. The role of these strategic information systems is to coordinate the scheduling of aircraft of all types and configurations by passenger load for each leg of a flight schedule. While not directly used in creating loyalty initiatives, these core systems are essential for the entire airline to consistently deliver exceptional service every day. It is through the consistent delivery of that service that the unique value proposition of any airline begins and is strengthened.

The heavy reliance airlines place on Business Process Management (BPM) and Business Process Reengineering (BPR) illustrates this point clearly. The use of strategic information systems to enable continual process improvement through BPM and BPR has gained prominence across nearly all airlines as they strive to make each process more streamlined, efficient, and focused on the flyer's needs. The continual improvement of these enterprise-wide systems is also critical for flyers to receive the levels of service they expect, based on the many incentive and marketing strategies aimed at converting them into frequent flyers. Ultimately, strategic information systems must create a highly synchronized set of processes, systems, and people for customer loyalty to be created and sustained over time.