The end-of-chapter application case “Continental Continues to Score with Data Warehouse”will be used to evaluate the probable costs, benefits, and implementation hurdles of using a data warehouse
We started this book with an opening vignette from a Teradata success story. This last case is from a similar success story, also covered in Chapter 8. Continental’s success with using a data warehouse to improve its revenue management, customer service operations, and so on has been widely reported (Anderson et al., 2004; Watson et al., 2006). Wixom et al. (2008) have studied on Continental’s continued success and interesting new uses of its data warehouse. Although these are not futuristic uses, these cases suggest the potential for what can be done to continue to exploit investments in BI technologies.
Wixom and colleagues had studied the use of data warehouses at Continental in the late 1990s. They recently returned to the company and conducted follow-up interviews with the users and developers of the data warehouse. They learned that the data warehouse has become an integral part of the airline’s operations, helping it make strategic and tactical decisions. When a system becomes part of the daily operations, it indicates a different level of acceptance in a company’s culture. It also usually means that the number of users may grow substantially. The warehouse now supports over 50 subject areas and more than 1,400 users writing ad hoc queries to generate business intelligence to make better decisions. In the following sections, reproduced (and adapted) with the authors’ permission, a few new uses are highlighted (Wixom et al., 2008):
Tax Department, London
· In the United Kingdom, Continental must pay a departure tax for passengers who leave the UK on Continental flights. Each month, employees in the London office calculated this departure tax by manually reviewing the records for every passenger who traveled out of London, and the employees submitted the appropriate amount to the government. If passengers are passing through the UK in less than 24 hours, they are exempt from the tax, but the manual process could not always identify those individuals. Thus, Continental regularly overpaid the departure tax, which equated to a $300,000 annual cost for the airline. Last year, several members of the Continental London office were visiting Houston for routine training, which included a presentation by the warehouse group. During the presentation, the London employees noticed that data in the warehouse potentially could identify passengers who were exempt from the departure tax. They approached the warehouse team to build a specialized application. Now, the group runs a monthly query to the warehouse, prints out a report with an accurate departure tax amount, and submits the report. The application eliminates significant time and overpayment.
Flight Performance
· Prior to the data warehouse, Continental Operations built and managed their own information and reporting systems. The systems support staff was very small; when a support employee went on vacation or was sick, systems were put on hold until the person returned to work. Eventually, management mandated a move to the warehouse to improve continuity of the support operations. Steve Hayes, a manager within this operations support group, has leveraged the warehouse for his area in significant ways. For example, he has built a real-time status application that communicates up-to-the-minute performance statistics on how the airline is operating. And, when Jet Blue and American Airlines were criticized for incidents that involved stranding passengers in planes for long periods of time (Cummings, 2006; Zeller,2007), Hayes was able to adapt his application, and help Continental avoid similar situations. Continental’s old process for detecting these kinds of events was manual and time consuming. Hayes explains, “You had to hunt and peck through flight logs. In the middle of a snow storm, you don’t have time to do that.” Once Operations identified the need to monitor planes on the tarmac, Steve added an alert to the real time performance statistics application. Now, flights that sit on the ground away from a gate for at least 2 hours immediately appear on the screen. In real-time, Operations can work to get those flights off the ground, or get them back to the gate in a timely manner.
The warehouse also has helped streamline Operations reporting processes. In the past, Continental manually tracked the reasons for flight delays (e.g., weather, part failure); there are about a hundred delay codes. Sometimes stations forgot to record the reason for delay, so Operations regularly ran a query on the legacy system, downloaded the results into Excel, e-mailed the results to the general managers, who would then fill in the blanks and send information back by e-mail or telex. According to Hayes, “It would take forever to track down the information and update the codes into the legacy system.” Using the warehouse, Hayes built an application one weekend that automatically lists flights that need delay codes for each station. The general manager now directly logs into the application, clicks on a flight, and enters the delay code. The new process eliminates multiple steps, and creates much more accurate results. Hayes explains that this situation is representative of how he now can quickly develop simple applications or application enhancements using the data warehouse that have high impact on Operations processes.
These examples are just two of the many new uses of the data warehouse at Continental. Wixom et al. (2008) describe many others and also list the following as facilitators in continuing success of BI at Continental:
· • A common data foundation
· • “Open data” philosophy
· • A culture of data
· • Personnel who are business–IT hybrids
***Grading Rubic and Deliverables***
|
Category
|
Points
|
%
|
|
Evaluation of probable costs
|
25
|
35%
|
|
Evaluation of benefits
|
25
|
35%
|
|
Evaluation of implementation hurdles
|
20
|
20%
|
|
Total
|
70
|
100%
|
Case Study Paper
Your goal now is to write a two-page paper using 12-point, double-spaced, Times New Roman font in order to research and answer the questions below.
· What were the costs involved for Continental Airlines when it attempted to use a data warehouse?
· What were the benefits involved for Continental Airlines when it attempted to use a data warehouse?
· What were the implementation hurdles involved when Continental was trying to use a data warehouse?
· What did you learn from this activity, and do you think data warehouses are a worthwhile investment for a company?Why?