Westjet Airlines: Information Technollogy Governance And Corporate Strategy Harvard Case Solution & Analysis

INTRODUCTION

WestJet Airlines is a well reputed, highly esteemed and well renowned Airlines company. It was founded in 1996 by Clive Beddoe, a pilot as well as an entrepreneur, with his three business partners. WestJet has earned its customer satisfaction and loyalty by providing exceptional services and admirable customer care services.

WestJet has expanded its business very rapidly and in a decade and a half it has captured a huge market share in the industry as well as it has received many estimable awards related to its services and excellence.

In 2011, the CEO of the company, keeping in view the increasing trend of IT, realized that in order to compete strongly in the market he must have a competent WestJet’s IT department. Keeping in view the growth of the company, he thought that in order to grab an enormous market share as well as in order to get access to more cities, he should introduce CODESHARE facility as well as innovative guest products and services in WestJet.

The company hired a Chief Information Officer, Cheryl Smith, who is highly educated and has a far reaching experience in the field of Information technology. She has assessed the whole situation and realized that in order to get competitive advantage she had to make considerable changes in the IT structure of the company. She has proposed few major changes and had given justified reason for them.

Most of the deep-rooted employees of WestJet are reluctant to such proposed change. Therefore, Smith wants some more convincing reasons and justifications in order to purchase their interest.

In this report

CASE ANALYSIS

West Jet is facing many problems and most of them are related to IT department. The IT systems of WestJet are standalone and are unable to integrate with the other IT departments. This was creating a hurdle in introducing CODESHARE facility as it requires integration of a single IT department in two or more reservation system. Therefore, the WestJet was unable to cope up with the pace of increasing IT trend in the aviation industry.

WestJet had never maintained a proper hierarchy of management in the IT department, due to which the efficiency and control over IT department is less efficient than it should be in order to cope up with the competitors.

Although WestJet’s IT department consistent of highly competent staff, but despite of this fact the number of employees and their relative skills were in disparity as compared to the industry benchmark numbers. This was creating inconsistency to maintain the benchmark with the industry’s benchmark.

There was scarcity of resources and WestJet has undertaken many projects and was unable to fulfill and complete each project efficiently and effectively because of the lack of enough resources. The company is unable to identify the priority of the projects based on profitability and cost effectiveness because of lack of integration of IT in different departments of the company. They are making an ineffective IT planning and budgeting strategy. There was a mismatch in the views of Vice Presidents of Business and the Vice President of IT department. The Business Units’ Vice Presidents were of the view and were upset that the IT department is unable to meet deadlines of the projects undertaken.

On the other hand, the Vice President of IT department was of the view that the projects are undertaken without analyzing the availability of resources, as well as they are never prioritized on the basis of cost efficiency and profitability. Moreover, the projects are also undertaken even if they are recommended by the IT department to not to undertake such projects.

To some extent, there were no proper structure of separate business and IT departments as people from different departments work as a team, in order to respond quickly to any problem. Therefore, there was lack in proper specific resource allocation to each department respectively.

Westjet Airlines Information Technollogy Governance And Corporate Strategy Case Solution

The data center of WestJet was located adjacent to a runway similar to WestJet’s headquarter, which is a very easy target to any misfortune and there was no backup data center, so in case of any calamity which could led to loss of data from data centre the company would not be able to recover the lost data because of unavailability of backup.

Another concern is that the company works 24 hours a day and seven days a week. The IT staff works overtime at night apart from their business hours. They are supposed to be on call after their regular business timings. They are exhausting the IT employees beyond their limits that is depressing the morale of the employees of IT department, which is then subsequently decreasing the motivation level and results in decline in overall efficiency...............

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