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Outsourcers & Offshorers – Beware of Losing Your “Tribal Knowledge”… A lesson from Brittish Airways


British Airways Shambles – Are Outsourcing, Offshoring or Cost-Cutting To Blame?

What on earth is happening at British Airways?   Tens of thousands of passengers have had a miserable few days (see picture), with flights cancelled, packed airports, lost baggage, poor communications … It is, as they say, a “PR disaster”, and it is hard to understand why the senior management took several days to get out in public or in front of the cameras and apologise. It was an odd strategy, whatever the root cause of this shambles.

Here is the Guardian –  “The airline blamed the computer blackout on a “power supply issue” and said there was no evidence of it resulting from a cyber-attack”.

But most of the specialist IT media says that seems unlikely. What about the back-up(s) that one would assume BA must have, with alternative power supply? That would be a basic disaster-recovery precaution, surely? In his first interview, the CEO said the back-up failed – but why? Whatever the cause, it just shows the total reliance our world has on IT these days.

Questions are being asked of that relatively new CEO, Alex Cruz, whose previous experience seems a little light to make him suitable for the BA role – he previously ran the Spanish budget airline called Vueling. But actually his record there looks pretty good and he seems to have been brought into BA as a cost-cutter. The airline had already gained recent  bad publicity for removing free food from short-haul flights, and there have been reports that expensive IT staff in the UK lost their jobs as work was moved offshore or to Indian technologists brought in to work in the UK.

The Sun reported yesterday that the failure “was made worse because inexperienced staff outsourced to India didn’t know how to launch the back-up system”. We don’t know if this is true but again it brings concepts such as outsourcing and offshoring into the public eye, and not in a good way.  This is from the Sun:

“…one source close to the airline said the problems could have been limited had IT staff outsourced to India known how to get its back-up system online quickly. The source said the system “failed to take over when the primary [IT system] failed due to a power cut.”

They added: “The third-party support providers are generally quite inexperienced meaning it makes a situation like this difficult to recover”. A second source close to Britain’s national carrier told The Sun: “BA have had six major IT failures in 12 months, 12 months since outsourcing their IT”.

We sounds like a broken record at times, I know, but whatever the cause, it does highlight again the difference between cutting costs and increasing value. If (and we stress, this is just speculation) cost-cutting measures in the IT area are indeed to blame, whether through outsourcing, offshoring or simply not spending enough on security and resilience measures, then that saving will now be dwarfed by the £100 million plus that this may well cost the airline.  You can always cut costs by finding something cheaper or indeed stopping spending, as we pointed out recently in the NHS context – stop feeding patients or cleaning wards and your spend ratios look much better.

But just as in our NHS example where health outcomes can be affected by cost-cutting, clearly saving money on IT can have serious consequences. What does the risk register for BA look like, we wonder? There must be some serious questions asked here – and the role of the on-executives comes into play here too. They should have been regularly questioning the executives on just this sort of disaster scenario.

Anyway, more to come no doubt – and our commiserations to anyone who has had a miserable few days courtesy of BA.

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