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Tech Takes Off

An ambitious project is helping airline Lufthansa prove that there's value in IT.
Tim Burke, CFO Europe Magazine
June 2, 2008

If CFOs feel finance is unappreciated by the rest of the company, spare a thought for CIOs. As companies invest more in technology — research firm IDC predicts global IT spend to total $1.4 trillion (€87 billion) in 2008 — the nagging doubts harboured by their colleagues about whether IT creates value grow by the day. A recent survey by consultancy Touchpaper found that only 15% of the 226 IT end-users polled believe innovation is a core task of the IT department.

But just when it seems techies can find few friends, along comes a project like the one led by Christoph Ganswindt of Lufthansa to show how IT can indeed add value. Since 2005, the CIO of the German airline's passenger business has been working with other CIOs in the Star Alliance partner network to migrate the carriers' loosely connected IT systems to a common platform. The aim is to improve how they manage flights, pricing, schedules, seat planning and other critical activities.

While progress has been slow, and only a handful of airlines — United, Austrian, TAP, Adria Airways and Croatia Airlines — have joined Lufthansa on the project, Ganswindt reckons the grind is worth it. As he points out, many carriers "are still using systems that in some cases are up to 30 years old." Not only will the project help drag the airlines' IT into the 21st century, but it should also bring notable financial benefits, saving money on maintenance and improving decision-making capabilities.

Lufthansa's passenger unit was the first airline in the project to move its inventory system onto the new system, with others to follow soon. "The foundation has been laid with inventory, and we'll follow up with ticketing and departure control," says Ganswindt. "We'll achieve significant cost-cutting per annum of several million euros." Something all airlines are seeking to do in light of sky-high fuel prices.

Ganswindt is used to tackling big projects. Shortly after joining Lufthansa Passenger Airlines in 2002, he was charged with centralising the entire IT function in just three months, largely in response to the industry turmoil following the terrorist attacks of September 11th. "It was obvious that cost management and resource management within Passenger Airlines was one critical item to help tackle the difficult situation," he says. "The board wanted to centralise everything immediately and create transparency in information management."

At a time when many companies are seeing big IT projects end in failure, what makes Ganswindt think he can see through the latest monster? "I'm a CIO very much focused on value creation and business processes," he says — something that will ultimately win the support of other parts of the company, including finance, while also giving IT's reputation a lift.

Tim Burke is senior staff writer at CFO Europe.

For the full interview with Christoph Ganswindt, see www.cfo.com/ganswindt




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