Question

WESTJET AIRLINES

Case Synopsis:

WestJet Airlines was a "high-value, low-fare airline" that began in 1996 as a regional carrier serving five western Canadian cities from its home base in Calgary, Canada. By 2011, WestJet had over ninety aircraft in the air serving eighty-one destinations in North America, Mexico and the Caribbean. With nine thousand employees, the company had become the second-largest carrier in Canada and the ninth largest in North America. But a 2009 move by IT to the Sabre reservation system "that did not go as smoothly as planned" and a strategic move to implement code sharing and several other strategic IT applications to enhance WestJet's competitiveness prompted the CEO and his executive team to hire an experienced CIO to bring WestJet up to par with other airlines.

Cheryl Smith was an extremely experienced and highly successful IT executive who had held senior positions in a number of large organisations including McKesson, a Fortune 50 company where she served as executive vice-president (EVP) and chief information officer (CIO). Smith was hired by WestJet in April 2011 to assess IT competence and take IT to the next level as part of a corporate drive to gain competitive advantage by delivering innovative guest services. Smith saw IT as the key to WestJet achieving its ambitions and corporate growth. She formulated an ambitious plan to restructure the IT organisation by providing WestJet with a new IT governance model. The transformation included a major reassignment of IT personnel and a reorganization of IT planning and budgeting, which impacted several other related processes. But senior IT staff members, some of whom had been with the company since the beginning and played a major role in developing the existing systems, believed her plan was unworkable. Smith had to convince both senior management and the IT group that implementing her new IT governance model was essential if WestJet hoped to achieve its strategic goals.

Basic Issue

The case focuses on how an organisation's IT governance model can be restructured to play a critical role in enabling the company to execute its corporate strategy. The case also describes a senior IT executive's process of assessing overall IT competence and the challenge involved in demonstrating to senior management and IT staff the strategic importance of IT.

The focus of the case is shortly after the new CIO was hired in April 2011 and had formulated a major plan to restructure IT operations and processes to make IT more responsive to business unit needs. The CIO was about to formally request executive-level approval for the changes and hopefully gain the support of IT staff. The case is thus a vehicle for discussing IT governance models that enable an IT function to best serve the needs of an organisation. As IT in the WestJet case was portrayed as a constraint on organisational growth, and also as the critical success factor in executing corporate strategy, the case also provides a context for discussing the "strategic impact grid" concept which the CIO could employ to better inform management regarding the critical role of IT in both sustaining operations and achieving strategic goals.

When Cheryl Smith, the new CIO, arrived at WestJet, she was asked by the CEO to advise whether the company had adequate IT or not. Discuss?

Answer 1

When Cheryl Smith was asked by the CEO to advise on company's IT adequacy, She determined IT adequacy by addressing following aspects -

• Structuring of the IT organisation.
• Plans, estimations and budgets of IT.
• Associating IT with the corporate goals and objectives.
• Resources availablilty which helps in judging the responsiveness of IT to various needs of business.
• IT personnel, their skills, their working hours, their specialisations, trainings given, etc.

By researching on all these aspects she was able to find out that though there are some problems and issues with IT, that can be restructured and alligned again but IT of company is technically competent to bring those changes.