Let’s face it – it wasn’t all about the perfect winter storm that led to the recent Southwest Airlines IT disaster, where hundreds of thousands of customers were left without flights home for the holidays. The real failure was Southwest’s executive leadership’s missed opportunity to prioritize strategic IT investment when and where it was needed most – ignoring multiple pleas from operational business units, including their pilot and flight attendant unions, for investment in new technology.
Over the last 50 years, Southwest has built a renowned brand and a loyal customer base. Recent operational and technical hiccups predicted the possibility of more dire consequences, but it appears they were ignored. Within a matter of days, the Southwest brand and consumer loyalty were destroyed with many impacted customers vowing “never to fly Southwest again.” The clean-up to compensate impacted customers is approaching the $1 billion mark, and this doesn’t include the cost of the outstanding IT upgrades and the loss of goodwill.
As leaders in the IT space, we must reflect on this situation and ask ourselves a few important questions: It wasn’t for a lack of IT funding – Southwest spends millions each year – so how did leadership allow IT to be treated as a commodity versus a strategic enabler of Southwest’s success? More importantly, how can CIOs get their executive leadership teams to recognize the importance of making IT investments that are in lockstep with the business strategy and the realities of running a thriving operation?
The Case for Strategic IT Investment
At the forefront, IT can’t be thought of as a commodity. Rather, it’s a vital enabler of the business strategy, and as the Southwest case study points out, a key to thriving operations and consumer satisfaction. For CIOs, there are a few key lessons learned here for successful IT strategy development:
- Recognize that the lack of strategic investment in IT that created the debacle with Southwest is not specific to an airline, it’s industry agnostic. This breakdown could happen to you.
- Realize the CIO’s job, first and foremost, is to influence and navigate the focus of IT investment on initiatives that will drive high-value results aligned to the priorities and realities of the current business environment.
- Strive to deliver an exceptional user experience to the spectrum of system users. Whether they’re your customers or employees, your system users want their transactions to be easy and comprehensive, not only delivering on expectations but also exceeding them.
- Confirm that your IT strategy is in lockstep with organic growth and M&A integration activity. As acquisitions continue to abound, understanding the IT implications – especially if the thought is for the future state to be an integrated business operating model – is imperative. IT will need to be at the forefront of rationalizing, integrating, and standardizing the IT ecosystem.
- Explore the opportunity to innovate by leveraging advances in technology – you may not want to be bleeding edge, but are you staying on the leading edge?
- Consider the potential of optimizing current application systems, including enterprise platforms, if replacement isn’t feasible, as revenue declines and high inflation present new constraints on capital investment.
Enabling Successful IT Transformation
Ok, the tactical and strategic priorities are agreed upon, and leadership has a plan. Now it’s time to put the plan into action and deliver results. CIOs will need to confirm they’re taking a comprehensive approach that isn’t solely focused on the IT development; rather, think of it as a transformation that encompasses aligning leadership buy-in, engaging the right resources and stakeholders, and deploying robust communication and learning programs. You can set yourself up for successful delivery by:
- Securing the resources, including funding and the right talent, whether it be in-house or sourced through strategic partners.
- Recruiting your advocates and creating the right messaging to engage all your stakeholders.
- Equipping your users to excel with tailored in-class and self-learning.
- Providing transparency to project progress and results, aggressively resolving issues and mitigating risks.
- Delivering high-quality solutions that exceed expectations on time and on budget with demonstrated value delivery.
Looking Ahead: Learning from Southwest Airlines IT Disaster
As mentioned earlier, the meltdowns that Southwest and now the Federal Aviation Administration (FAA) have recently experienced are not unique to just the airline industry. If strategic IT investments aren’t prioritized this type of IT disaster could just as easily occur to any company – to a CPG manufacturer in the event of a distribution or logistics shutdown, to a retailer with a point-of-sale solution crash, or to a pharma company losing years of valuable clinical trial research data with a system failure. Any company, within any industry, can be just one IT error away from a total disaster without a proper IT strategic plan in place.
If your IT strategic plan needs a refresh, consider Clarkston Consulting as your strategic partner. With our expertise in business strategy and technology transformation, we help align business and technology priorities to focus efforts on IT initiatives that benefit the business to differentiate and thrive.
Subscribe to Clarkston's Insights