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Qantas looking to bring tech into 21st century
And iron out some age-worn and costly wrinkles with application overhaul...

By Iain Ferguson

Published: Monday 28 November 2005

Australia's largest airline, Qantas, plans to examine how it delivers software applications as the next step in a billion-dollar-plus IT transformation project.

CIO Fiona Balfour confirmed the nine-month review will kick off before Christmas but said the thinking around the review is "at its very earliest stage".

The carrier's 50-year-old IT shop is presently wrestling with the management of 700-odd applications, many of which are written in older programming languages such as Cobol and Fortran, and serviced by an ageing group of programmers.

The antiquated nature of the IT operation is a large contributor to the fact the airline's spend on IT and telecommunications sits at around four per cent of revenues compared with an average among regional competitors of two per cent.

However, Qantas has made a start on its change program, with the proportion of applications managed in-house sitting at 75 per cent to 80 per cent, according to Balfour.

"We have service providers for a significant number of applications already today," she said.

One initiative undertaken three years ago was to replace all its corporate applications - which included 38 separate human resources databases and a 25 year-old mainframe application - with Oracle's E-Business suite running on Linux. Oracle is one of Qantas' remaining strategic partners after the carrier consolidated the number of suppliers it deals with.

Others include Telstra, IBM, Amadeus (which hosts its reservations system) and SITA (which provides the airline's international network).

Other systems to be upgraded or outsourced to date include general ledger and human resources.

However, huge challenges continue to confront Balfour, who is also Qantas Business Services executive general manager. The carrier's engineering and maintenance software - written in Cobol - is long overdue for replacement but getting a business case together for the AU$100 million-plus cost to shift it onto a Unix environment has proven extraordinarily tough.

The Qantas transformation project is designed to turn the airline's information technology arm into a streamlined, largely-outsourced operation delivering cost-efficient service to the AU$13 billion-per-year business.

The company signed in May 2004 deals worth a combined value of AU$1.4bn with IBM and Telstra for management of its infrastructure and telecommunications. Big Blue has a 10-year contract worth AU$650m to handle mainframe and mid-range computing as well as data centre operations and other managed services, while Telstra has assumed responsibility for voice, data and desktop services for seven years under an AU$750m deal.

While the agreements leave Qantas with a 700-strong information technology arm running more than 100 projects at a time, the program is causing massive upheavals at the carrier. Late last month, the airline relocated its mainframe environment from its 35-year old data centre underground in Sydney's central business district to a new IBM facility in Baulkham Hills 45km away.

Balfour said the move encompassed TPF (Transaction Processing Facility) environments and IBM MVS (Multiple Virtual Storage) systems with multiple partitions running up to 120 business applications in a variety of development environments, as well as a Teradata data warehousing environment.

The shift was undertaken successfully between 11pm, October 23 and 3am, October 24, Balfour said, with "Qantas' stringent safety and operational procedures" being followed at all times. The four-hour window was set at the least sensitive time for disrupting airline operations and a full dress rehearsal conducted the previous weekend to minimise risks associated with the actual event.

However, it is far from the last relocation the airline faces in the near term. About 16 mid-range servers must be moved before Christmas this year, while around 80 servers supporting the Qantas.com website are due to be shifted after the Christmas peak load sometime in the first quarter next year, Balfour said.

Telstra is also making its presence felt under the deal, installing 700 new computers per week to a total of 17,000, Balfour said. This is just one component of an overall refresh encompassing 38,000 devices in all, with others including boarding pass printers.

The refresh project also includes a shift from Windows 2000 to XP on the desktop, due to occur progressively over the next 18 months.

She added that a planned shift of the airline's legacy networks to an end-to-end IP network - part of the Telstra deal - was on schedule for completion in the latter half of 2006.

Iain Ferguson writes for ZDNet Australia