InformationWeek
Defining The Business Value Of Technology
November 17, 1997
Delta Seeks Improved IT
CEO says systems aren't good enough
Mullin, who joined Delta in August, assessed the situation in a recent statement distributed to Delta employees. To catch up, the airline plans to accelerate its internal development, releasing system enhancements every 90 days starting early next year.
Delta needs to integrate its core business systems better, officials admit. Lack of integration resulted in sluggish data gathering and analysis that caused Delta to revise a recent earnings forecast two weeks after it was released to financial analysts, according to a Delta spokesman.
Two years ago, Delta announced an IT joint venture and outsourcing contract with AT&T, called TransQuest. The effort was intended to imp
rove Delta's application development productivity and quality, as well as to install a new IT infrastructure and cut costs.
TransQuest helped Delta get at least part of the way toward those goals. The airline was able to cut its overall costs from 9.5 cents per seat mile to 8.8 cents per seat mile-better than the industry average, but well short of its original target of 7.5 cents per seat mile. Delta has also added new flight management systems, developed using object-oriented technology.
But TransQuest became a Delta subsidiary last year when the AT&T contracts ended because of AT&T's spin-off of NCR and Lucent. This year, Delta started new efforts to improve its information systems. Among them was the appointment of Charles Feld as acting CIO. Feld and his consulting firm, the Feld Group in Irving, Texas, have earned a reputation for taking on tough IT challenges.
Feld is a former CIO at Frito-Lay Inc.; most recently he served as acting CIO at Burlington Northern and Santa Fe Railway Co. At
Burlington Northern, Feld oversaw the integration of systems operated by Burlington Northern and Santa Fe. The 22-month effort involved more than 60 million lines of legacy code. The real-time integrated system was switched on in July; Delta hired him a month later.
When TransQuest, renamed last month as Delta Technology Inc., failed as a joint venture, it set Delta back by several years, says Feld. TransQuest "built some neat stuff," he says, "but nothing was integrated because they built in reaction to functional needs." What's needed now, he says, is some "basic block-and-tackling, good design, and motivation so people look forward to coming to work in the morning."
That's just the kind of turnaround situation Feld says he loves to take on. "It's short of a crisis," he adds, "but there is tremendous upside if we can get this working for us."
ne year after Delta Air Lines Inc. dissolved a joint venture aimed at improving its IT, the carrier's systems are still two years away from being state-of-the-art, according to new CEO Leo Mullin.
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