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Digital Transformation Craig Maccubbin Chief Technology Officer

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Page 1: Digital Transformation

Digital TransformationCraig MaccubbinChief Technology Officer

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Southwest Airlines History

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Southwest Airlines Today

TODAY SOUTHWEST AIRLINES IS THE NATION’S LARGEST DOMESTIC

AIRLINEIN TERMS OF DAILY DEPARTURES & CUSTOMERS CARIED

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Our Philosophy

HAPPY EMPLOYEES=

HAPPY CUSTOMERS

HAPPY CUSTOMERS=

HAPPY SHAREHOLDERS

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Southwest Success

And a number of Firsts…Ticketless Travel

Southwest.comOnline ticket purchase

Employee Profit SharingSelf Service Check-inMobile App DING!

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The Desire for Modern Capabilities Supporting the Long Term Vision of the Company

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Implications– Little or no resemblance to past results,

configuration, or structure– New outcomes– New technologies– New processes– Change in who does what– Change in how the what gets done– Change in character?

What is Transformation?

-- “Profound and radical change that orients an organization in a new direction and takes it to an entirely different level of effectiveness.”

Challenges– Weak sponsorship– Winning hearts and minds– Unclear communication– Lack of understanding capability/capacity – Uncertain roles and responsibilities– Maintaining momentum– Destination or journey?

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Southwest Airlines Technology Transformation

Enable up to $3B in Southwest business

value…

…by developing new capabilities and strengthening

existing...

…while delivering excellence

• Strengthen technology practices, processes and methodologies

• Invest in disciplines critical to quality delivery

• Minimize technical debt• Improve career development

and performance management

• Redefine our operating model to support our capabilities and business demand

• Support strategic initiatives• Maintain systems to keep the

airline running• Drive innovation in

partnership with business

Through leveraging of the skills and talents of our People to deliver cost effective, sustainable, innovative, and Customer-friendly solutions

Our People Quality-Minded Enterprise-Focused Transparent & Actionable Disciplined Innovative

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Five Year Transformation RoadmapFocused on Strategic Business Initiatives and Transformation of Technology

Stabilize Optimize Innovate

Stabilize the FoundationStability Task Force

Enterprise ArchitectureData Strategy Definition

Program Management PracticeProductivity Improvements

Must Win / Critical ProgramsCR1

International / CODAOperating Platform

NextGen Network PlanningO&D Revenue Management

Multi FleetTRAX Maintenance

Customer Experience Strategy

Reservations ReplacementConsolidate to One System

Operating Platform OptimizationImproved Irregular Operations

Maximized Customer ExperienceIntegrated Customer Solutions

Mobile Customer Solutions

Enterprise Data StrategyNew Business Analytics

Very Large Program• Scope, finance, resourcing oversight

and mgmt• Managed risk during Test, Release

Plan and Deployment• Alignment to Architecture Strategy• Rationalization Strategy

Complex Business Transformation• Strategy, Architecture & Data

Alignment• Integrated Business & Technology

Operations• Disciplined Demand Mgmt• Change Leadership

Tactical Revenue Generation Projects

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Transformation: Changing More Than Just Structure

• Creation of capacity• Meeting business

demand• Vendor management

• Key measurements• Baselines• Future state targets• Continual assessment

• Alignment of enterprise standards

• Risk management• Disciplined delivery

framework

• Consistent• Enterprise-focused• Clear ownership &

interdependencies

• Functional org chart• Cross-functional

teaming• Anticipated interaction

patterns• Distinct hand-offs

• Career opportunities• Clear roles &

responsibilities• Knowledge, skills &

abilities

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Transformation Approach

Our strategy:

• Build the things that make Southwest different

• Buy the capabilities that are commodities

Focus of in-house development:

• Implementing our unique business ideas

• Integrating our systems

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Transformation Approach

Our strategy:

• Build the things that make Southwest different• This is where Partners come in!

• Buy the capabilities that are commodities• This is where Partners come in!

Focus of in-house development:

• Implementing our unique business ideas• This is where Partners come in!

• Integrating our systems• This is where Partners come in!

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REQUIRED: Business Customer Assessment

Customer Satisfaction Change Readiness

• High level of understanding of the Technology Transformation Vision.

• High level of Urgency and Commitment / Buy-in from all corners of the Company.

• Very strong Willingness to Change.

• Opportunity exists to close the Readiness gap with all constituents.

• Senior Leaders believe Technology is driving Business Value, and Trust is strong among Southwest Leaders.

• Overall, Technology has a strong reputation in Quality, Enterprise-Focus, Transparency, and Accountability.

• Discipline and Innovation are the biggest areas for improvement.

Applies to Partners too!

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Data Center of the Future Transformation

Solution: Data Center of the Future address key operational risks

Current State Future State Business NeedsLimited Scalability Unlimited scaleAbove industry average High Severity outages Industry or below industry High Severity outages

Limited geography mix & higher risk Broader geographic mix and lower riskGrowing technical debt and costs Modernization and optimized operating cost

Limited architecture Advanced architecture and integration

Burning platform: As Southwest moves to 24x7 operations, our current Technology Infrastructure and Security support model serviced by 8x5 staff is unsustainable

Our current support structure is only designed for 8x5 support…. …But our business requires 24x7 support

Central Time

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• Infrastructure and Security L2/L3 services that operate 24x7x365

• Partner takes over services in SWA facilities and transforms to new Data Centers

• Improved service levels that are consistent with industry standard

• New Data Centers and Infrastructure equipment

• Fully redundant DCs with separate Disaster Recovery Facility

• Capacity to ramp up and down as required to meet demand

• Energy efficient and environmentally friendly

• Cloud-like economics and elasticity upon which to build future business

• Increased stability and reliability

Data Center of the Future Transformation Goals

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Objectives • Establish Enterprise Product Support and leverage a cost effective sourcing

strategy against our scope of applications, while driving increased product stability and reliability

• Design an operating model that will support growth while providing appropriate governance

Benefits• Improves operational efficiency• Realigns SLAs to support Technology and Business goals• Ensures continuity of skilled resources assigned to our account• Establishes an effective cost model• Creates growth and career opportunities for our People• Aligns Application and Maintenance support to our Technology operating model• Assures consistent performance for our People & third party Partners• Increases efficiencies by bringing all product support under EPS

EPS/AMS Transformation Objectives and Benefits

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• Incorporate industry best practices in to Support Model

• Adhere to Technology Transformation processes such as SAFe, Service Management (ITIL), Project Governance

• Define and implement consistent roles, responsibilities and processes (one approach for all EPS Teams)

• Create shared accountability between EPS and other capabilities for providing reliable business services

• Utilize performance metrics across our EPS Partners to proactively manage and drive intended results

• Expand view of shoring options

EPS/AMS Transformation Guiding Principles

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The Next 5 Years

2021 ThemesDifferentiating

Trends

• Contextual Personalization

• Operationalized “Extreme” Data

• Seamless Customer & Employee Experiences

• “Work My Way”

• Cognitive Learning

“Table Stakes” Trends

• “Umbrella” Ecosystem

• Ready to Diversify & Acquire

• Payments & Loyalty Systems

• Sustainability

• Always Connected (In Secure & Private Way)

Underlying Influences• Sharing Economy• Lower Attention Spans• Population Shifts

• Population Shifts• Wearables / Implantables• Security

• Self-Service• PaaS

Digital Customer

Enabled Workforce

Optimized Airline

Enterprise Everywhere

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Four Strategic Themes and Guiding Principles

Digital Customer Enabled Workforce

Optimized Airline Enterprise Everywhere

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• Tier 1 companies are struggling to deliver and perform–Delivery cures a world of ills

• The world is flatter than it has ever been

• Big opportunity for mid-tier companies• Customer agility is key• The Pursuit Team vs. The Delivery

Team• Transition excellence is table stakes• Transformation excellence is where

true Partners shine

A Customer’s Perspective on the World

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Strategic Partnership Success

OUTCOMES

Strategic Partnership Characterist

ics

Delivery

Trust Co Investment

Top-to-top Relationshi

ps

Integrity

Partner on Strategic Programs

Long-term engagement

Business Success

Must be aligned to our business values and our business outcomes

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Spectrum of Partnership

Contract focused

Make it up as we go along

Where should we be?

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Spectrum of Partnership

Partnerships – not vendorships, supplierships, or third-partyships

Contract focused

Make it up as we go along

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• The lessons we learned from the dating sites and matchmakers is that we are not looking for people just like us

• We want people and a culture that is complimentary to us• You are only as successful as the people you put on the ground

Cultural Fit 101

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• Not just looking for someone to take our mess for less• We engage partners for the innovation they can bring to

our business• Process innovation• Tools innovation• Business process innovation• You need to clarify how you bring innovation in order to

obtain (and retain) the long term engagement• Innovation can’t look like, “let me sell you more stuff”• Innovation should be pervasive in approach…tools...who

does the work...outcomes...

The Role of Innovation in Partnerships

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Success

SUCCESS

What people think it looks like

SUCCESS

What it often really looks like

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Success

SUCCESS

What Customers rely on Partners to deliver

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Questions