Air NZ wary about drowning in customer relationship data

Air New Zealand is putting its customer relationship management systems under the microscope, although incoming CIO Rob Fyfe admits he is wary of overinvesting in the area.

Air New Zealand is putting its customer relationship management systems under the microscope, although incoming CIO Rob Fyfe (pictured) admits he is wary of over investing in the area.

The airline employs a range of systems including Vantive and various legacy systems for its loyalty and frequent flyer programmes. There are also customer management components in its aging CARINA reservation system.

Air New Zealand is implementing enterprise application software from PeopleSoft as part of a business upgrade that will cost $37 million over six years. A gradual rollout of PeopleSoft 8 is planned with financials, budgeting and procurement to go live by the third quarter of this year, followed by human resources in Q4 and payroll early next year. Fyfe, who has been in the job for seven weeks, says there are no plans to look at PeopleSoft for CRM, although the door is not closed.

He says the company is reviewing its overall CRM and data warehouse architecture but it’s an areas he is cautious about.

“You tend to find organisations are swimming around in data on customers and customer relationships,” he says, claiming most have more capability than they use.

A new reservation system is also under consideration but what happens depends on whether the Air New Zealand/Qantas merger goes ahead. CARINA was first fingered for replacement in 2000.

In 2001 Air New Zealand was understood to be conducting due diligence on Madrid-based Amadeus, which was competing with a Lufthansa Systems/Unisys consortium. Before the airline industry hit its current woes the Air New Zealand reservation system contract was believed to be worth $125 million. This is probably not the case as reservation system providers are moving to provide cut-down systems to their struggling customers.

Fyfe says once again the aim is to not overinvest in a new IT system. “The market conditions have changed since we first looked at replacing CARINA and we have been working with suppliers to ensure that we get something which directly meets our needs rather than something airlines have traditionally had in place.

“I think suppliers are moving in the same way we’re moving. Those who have served the low-cost airlines are looking at adding more capability and the high-end reservation systems are looking at stripping out some capabilities."

Having said this, he says there are still only a couple of vendors that could potentially meet Air NZ's needs.

“Looking at replacing CARINA, we have to determine whether we need the system which will cost a few million dollars or tens of millions. It comes down to what do customers want. Do they value the services enough to spend the money to get that capability?”

Fyfe says it's more of a timing issue rather than figuring out what it’s going to do. If the deal with Qantas goes ahead, Amadeus would be at an advantage as it has had a 10-year contract with Qantas since 2000 and operates a support centre in Sydney.

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More about Air New ZealandLufthansaLufthansa SystemsPeopleSoftQantasUnisys AustraliaVantive

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