[Summary of The Economist] Computer says no - British Airways botches its response to its latest technical woes
1. URL: http://www.economist.com/news/business/21722880-even-industry-where-computer-crashes-are-increasingly-common-british-airways-botches-its?journey=d
2. Subject: Computer says no
3. Title: British Airways botches its response to its latest technical woes
4. Subtitle: Even in an industry where computer crashes are increasingly common
Print Edition, Business, June 3rd 2017
British Airway had an accident of delaying flights because of, as they claim, IT infrastructure glitch, eventually causing to pay as high as $192m.
When Alex Cruz, the chief executive of BM, offered apologies to the public, some pour scorn on his vague explanation on the cause of the failure blaming "power-supply issue".
During the fray, the staff of BA weren't well-prepared and didn't know how to deal with its angry passengers.
Even though Alex Cruz promised that it would not happen again, that promise is not trustworthy, because since a wave of mergers decade ago, many in the industry were hit by the same problem over and over again.
The horrible standstill of the company was caused by IT systems dealing with quantity and complexity of relevant information required to manage flights malfunctioned and the inability of the backup's kicking-in.
Legacy carriers like BA regard costs of IT systems as overhead, but it should be considered direct operation cost, and the portion of the cost is 2.7% of the revenue in the industry, which is too low and even lower than hotel industry.
Regular tests on systems are not implemented as often as it should be because companies fear that may disrupt business too much.
Firms should prepare contingency plans to deal with irate customers to deflate the worst case problems in case of IT system's failure.
Frugality on IT investment is a false economy and a clumsy cost saving efforts could endanger companies' reputation.
2. Subject: Computer says no
3. Title: British Airways botches its response to its latest technical woes
4. Subtitle: Even in an industry where computer crashes are increasingly common
Print Edition, Business, June 3rd 2017
British Airway had an accident of delaying flights because of, as they claim, IT infrastructure glitch, eventually causing to pay as high as $192m.
When Alex Cruz, the chief executive of BM, offered apologies to the public, some pour scorn on his vague explanation on the cause of the failure blaming "power-supply issue".
During the fray, the staff of BA weren't well-prepared and didn't know how to deal with its angry passengers.
Even though Alex Cruz promised that it would not happen again, that promise is not trustworthy, because since a wave of mergers decade ago, many in the industry were hit by the same problem over and over again.
The horrible standstill of the company was caused by IT systems dealing with quantity and complexity of relevant information required to manage flights malfunctioned and the inability of the backup's kicking-in.
Legacy carriers like BA regard costs of IT systems as overhead, but it should be considered direct operation cost, and the portion of the cost is 2.7% of the revenue in the industry, which is too low and even lower than hotel industry.
Regular tests on systems are not implemented as often as it should be because companies fear that may disrupt business too much.
Firms should prepare contingency plans to deal with irate customers to deflate the worst case problems in case of IT system's failure.
Frugality on IT investment is a false economy and a clumsy cost saving efforts could endanger companies' reputation.
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