Carl Friedmann talks to BAA’s Philip Langsdale about initiatives to make sure the organisation weathers future storms.
Can you explain the ways the CIO helps navigate business growth at the IT and boardroom levels?
Philip Langsdale: I think you've got three real roles. One is helping the board and fellow executive committee colleagues to understand how new technology can really help improve the business operating model. And that's everything from how we relate to and inform our passengers of what's going on in the airport through to how to reduce costs and be more productive. I think the CIO is an important part of understanding what's happening in the world of technology, how that's changing the business model and how we can seize those opportunities.
The second thing is to help shape and prioritise the investment programme so it's focused, achievable and effectively engaged with colleagues in the whole business. You can't just invest in technology - you've got to sort out the people and have coherent, well-constructive programmes of change.
The third area is helping to deliver that change in a cost-efficient way, either by taking a lead on some programmes or supporting others depending on how they're best structured.
How has your relationship with BAA CEO Colin Matthews strengthened and become more vital to the overall growth of the organisation?
I think CEOs get the CIOs they deserve. I work for a CEO who understands the role of technology in delivering improved business, so the CIO is on the executive committee and is much more engaged with executive peers.
As CIO, what is your approach to enabling the best possible experience for your customers?
There are many different operating models at BAA. Heathrow is a complex hub; it's one of the biggest airports in the world. That brings huge complexities in terms of business process and technology compared with smaller airports that are more point-to-point and, therefore, more focused on being low-cost, resilient and effective operations. So, there are two very different operating models.
I think we're very focused on improving our customer experience and that engages everything from getting better information on what's happening in the airport, to reducing the time that people queue, and that requires focus on making sure we have the right resources in the right place and we respond to disruption well. A big area of focus is making the airport more resilient to external shock, like snow. But other things happen, like air-traffic control putting on airspace flow-rate restrictions due to storms, which immediately causes congestion in the airport, and we have to respond to that very quickly.
How prepared are you for snow now, compared with last year, as another winter looms?
We had a review of winter resilience in the first quarter, and [non-executive director] David Begg led the 'Begg Winter Resilience Report', from which 14 recommendations were implemented. Some of it will take longer than a few months to do, but we've acquired a lot more equipment, we have a detailed tactical snow plan, and we can drill and test and make sure it works well.
Heathrow works well when everybody cooperates, so we've spent a lot of time with the airlines and with air-traffic control to make sure our plans are well-rehearsed and well-engaged with them. We're putting in a new control centre in one area which will enable us to track the status of the airport - a very big IT-enabled project. There's also a lot of focus on congestion in the airport - how do we best support the quest for information and people who are delayed, and make sure they're supported by both us and the airline.
How much of the passenger automation process is driven by BAA and how much is driven by airlines?
It has to be driven by both. As an airport authority, we have to work closely with the processes of the airlines. From an IT point of view, we're very lucky because we have a real active engagement with the CIOs of the big Heathrow-based airlines and the airport operating committee. And we work very actively to look at those areas through the IT stakeholder board.
What are the main tests of the CIO to nurture good citizenship in the organisation?
We have changed the shape of the IT function here enormously. Three years ago, there were nearly 800 people in IT and now we're just over 100. That's a result of having an absolute focus on reducing costs and improving service quality, which are two sides of the same coin.
There had been a focus of doing that organically and then about two years ago we started looking at outsourcing. In December last year, we decided to outsource the service and most of the project delivery capability to Capgemini. That means you have a very different capability in the IT function, which is more focused on how to engage with the business and the stakeholders, how to lead or nudge them into understanding IT capability and how to deliver complex projects in a way that safeguards the future. These are new skills we're developing in IT and that requires a lot of focus on people development and enhancing their skills.
What are the unique challenges facing the CIO when managing such a massive international organisation, particularly with outsourcing cloud computing?
I think the main challenge right now is that we're in the throes of the transition to Capgemini. That is a big change in many ways, so we're just making sure that lands well; ensuring we have a mutually constructive relationship with Cap. We know we're in this for the long-haul, so we have to change our behaviour to be more mutual and supportive.
The tactical challenge is delivering as many of the Begg recommendations as possible before it snows again. I think developing a stronger IT capability that leads and nudges the business into thinking about how we use technology more comprehensively is an important challenge, and that requires getting people who have that skill and competence and credibility.
Concerning cloud, I think we're seeing a fundamental change in the supply side of IT, and that's one of the reasons why we've outsourced it, because you'll never get the economies of scale and scope, nor maturity of business processes, as an in-house IT function. The straightforward economics of the IT industry are saying "use cloud; use these things when you can".
How are investment decisions taken when working out which new technologies to implement at which airports; for example, security checks?
Under normal circumstances, we produce a business case, we have an agreed capital budget, and within the scope of that budget we get plans for future investment, which we'll take to various approval boards depending on the level and size of the investment. I think what's odd or unusual is the degree of consultation we go through at Heathrow with the airlines.
Because we're a regulated industry, all our investment cases for IT have to go through the IT stakeholder board to get endorsement, which is extremely unusual. I haven't seen that degree of transparency elsewhere. It forces you to really focus on why you're making an investment and what value and benefits it will deliver because you're going to get challenged by your primary customers. In that sense, it's very therapeutic. You get quite a robust debate on investment decisions - and that only applies to Heathrow: we're not obliged to do it at the other smaller airports.
How important is interoperability of airport and airline systems?
It's reasonably well defined. There are de-facto standards you operate in terms of transfer of passenger and bag information, and the linkages between the airlines' departure control systems and ours, so it has to work because the airlines and the airports interoperate so actively.
As new terminals are added and others renovated at BAA airports, what are the challenges in integrating new IT infrastructure with legacy systems?
It's a big challenge. Take terminal 2, which we're opening in 2013. We pretty much have to freeze that design now as the constructors have to know information such as where all the cables are going. Inevitably, you're designing something that has to integrate with what's current and state-of-the-art, but at the same time have flexibility with what we know will be a very different IT world when it opens. The terminal also has to cope with 30-40 years of life after that, so you tend to put in as much flexibility and capacity in the network to cope with the unknown.
So, is there a certain amount of crystal-ball gazing?
As an organisation, we haven't been very strong at that. We've just taken on a new CTO [Simon Fell] who will pick up responsibility for looking at technology innovation. We need to
move forward to get on the front foot in some areas of infrastructure and running IT, safeguarding the future while building for the present.
What will Heathrow look like in five years?
Our focus is making Heathrow a better place for passengers to travel through. It gets back to looking at the time people spend in the airport and making that time more effective and more productive, and minimising queues and disruption.