African Airlines Rising in Airline Strategy Awards

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Last Sunday I was privileged to announce and present the SITA-sponsored Award for Executive Leadership at the “Airline Strategy Awards” held, as always, at Lincoln’s Inn in London.  The very well deserved award went to James Hogan, the CEO of Etihad Airways, from Abu Dhabi.

I was very struck by the fact that two of these prestigious awards went to African airlines – the first time that any airline from Africa had won one of these awards.

The CEO of Ethiopian Airways, Tewolde GebreMariam, won the Regional Leadership  Award. He won because Ethiopian Airways has delivered consistent profits whilst expanding its network and fleet.

The CEO of Kenyan Airways, Titus Naikuni, won the Airline Business Award, awarded by the magazine’s Editor.  In the 10 years that Mr Naikuni has been CEO, Kenyan Airways has trebled its revenues and doubled its fleet.

This is a very interesting development and shows how quickly the world and the airline business is changing.  Parts of the African Continent are now experiencing fast growth.  The World Bank reports that the economy of Sub-Saharan African countries grew at rates that match or surpass global rates.  The rate of return on investment in Africa is currently the highest in the developing world.  During 2011, Sub-Saharan economic growth rate was 4.9%.  Excluding South Africa, which accounts for over a third of the region’s GDP, growth in the rest of region was 5.9%.

Trade has driven much of the growth in Africa’s economy. China and India are increasingly important trade partners with 12.5% of Africa’s exports being to China and 4% to India.

It is therefore not surprising to see African airlines rising, and it was good to see this recognised at the Airline Strategy Awards.

Speech to the Chemistry Club Part 4: The Three Dragons we have to Slay

You may have read some of my previous posts based on my speech to the Chemistry Club, so let’s go back now to the 3 Dragons we have to slay.

IGNORANCE

St George And The Dragon 1456

Here comes Dragon Number 1, breathing fire.  His name is IGNORANCE and his mantra is “IT does not really matter”.

If you accept that technology is fundamental to the competitive success and cost-base of almost all industries in the UK. And that is is also fundamental to how the public sector interacts with us all as citizens and meets its cost and efficiency challenges. Then why is IT something of a ‘second class citizen’ in the UK?

Every IT conference I go to, someone asks “Why aren’t CIOs on the Board?”  Technology is always somewhere on the Government’s policy agenda – but not at the top.  It sometimes seems to me that the “T” in STEM (i.e. “Science, Technology, Engineering and Maths”) is silent.

I was appalled to be given a lecture by an industrial psychologist at a recent business event on how – as a member of the IT profession – “I must get out more and talk to the business”.

That approach made it sound as if I was wearing sandals, flares and a bad haircut. I loved the “IT Crowd” as a show on Channel 4 – but I do recognise that it played (very successfully) on the stereotype of the techie geek.

I just don’t think this kind of conversation about technology happens in Boston, Berkeley, Bangalore or Beijing. As we know, in India and in San Francisco, the heroes are the technology entrepreneurs who have literally transformed their societies, bringing jobs and prosperity to many people.

Two of the founders of the Indian IT industry – who I am pleased and proud to know slightly – are, for instance, engaged in setting up a social security system in the Indian countryside and spreading low-cost mobile banking to farmers.

It should be as unacceptable for a CEO, a Permanent Secretary or a Government Minister to say they do not understand technology as it would be for them to say they can’t read a balance sheet!

INCAPACITY

The Second fire-breathing Dragon’s name is INCAPACITY, particularly in the quality and effectiveness of IT Training and Education.

We are simply not, in the UK, turning out the number of technology graduates and apprentices that we need:

  • employment in the IT industry is growing nearly 5 times faster than the UK average,
  • 1-in-20 members of the UK work-force is now employed in IT, and
  • at e-skills UK we calculate that over 110,000 new IT professionals are needed each year.

BUT look at the numbers for graduates:

  • only 17% of the intake into the IT industry comes directly from education,
  • the proportion of IT professionals under the age of 30 has fallen from 1-in-3 to under 1-in-5,
  • the number of applicants to computing courses in the UK halved between 2001 and 2007 – down from 31,000 to 15,000, (It has now gone up to 17,000, but is still far too low at 1/2 of what it was and 1/3rd of what it needs to be),
  • The proportion of IT graduates unemployed 6 months after graduation is increasing to 14% – double the average, and
  • more disturbingly, of those employed only 45% – less than half – are actually in IT jobs.

The school numbers are equally worrying:

  • students taking technology A Levels have fallen by 60(yes, six-zero)% since 2003,
  • grades for these subjects are significantly lower than the average, and
  • at GCSE level, the number taking IT has fallen by 57% since 2005.

The problem is not just about overall numbers – the male/female imbalance is catastrophic and shameful. Only 15% of computing degree applicants and 9% of computing A Level students are female.

This sounds like a TECH SKILLS SUPPLY CRISIS to me.

What we need is VERY SIMPLE – we need an educational system that does 3 things:

First – we must recognise the importance of IT in nearly every industry, whether its retail or airlines, media or manufacturing, public or private sector.

Second – we need courses – at GCSE, at A level and at Degree level – that produce students who are genuinely inspired and excited about how you can USE IT to really make a difference in their business or department or charity.

Third – we need to attract talented individuals from the OLD industries into the IT industry of the future.

INCONSISTENCY

And, finally, the Third Dragon whose name is INCONSISTENCY: we need a strong voice for IT in the UK.

We have excellent organisations that speak for the IT industry in the UK: BCS, Intellect, e-skillsUK, universities and colleges of further education.  We have excellent allies and supporters in the political and media worlds.

In the UK, we all need to talk confidently and loudly about the importance of Technology  and make our case that excellence in IT and e-skills are today’s successes that will be essential to our future performance in the connected globalised highly competitive World.

So in conclusion I believe that:

  • the UK’s future prosperity and competitiveness depends on us securing a greater share of the World’s high-value-added work,
  • the UK should become a generator of – and magnet for – digital talent and high-value technology-enabled businesses, and
  • we must, in the UK, strive to be a world leader in the development of IT-enabled business solutions.

And, in my view, to do all this we need to slay the 3 Dragons of IGNORANCE, INCAPACITY and INCONSISTENCY.

We will, in my view, in this way generate Prosperity, Growth and Jobs:

  • for IT experts in the UK
  • in other industries throughout the economy, and
  • for people transferring from declining sectors and industries.
Do you recognise these Dragons? And how would you go about slaying them?

Speech to the Chemistry Club Part 3: How IT is Revolutionising the Retail Industry

The same thing is now happening in Retail with John Lewis innovating customer service using technology.  We have:

  • Partner-assisted self service jl.com kiosks in the stores- these were tremendously successful during the ‘Back to School’ season where parents ordered in-store from the Internet.
  • ‘Never Knowingly Undersold’ online compared to ‘Clicks and Bricks’ competitors
  • Ratings and reviews online
  • ‘Click and Collect’ – where you order online and collect from a John Lewis store – is going fantastically well, at almost double last year’s volumes
  • We have extended this to many Waitroses and by October we will have 120 ‘Collect’ sites,

So what I am seeing in Retail is what I saw in Airlines,  around 7 years ago – an explosive channel shift that is turning the whole industry inside out.

You can see the “online flood-waters” approaching categories that no-one thought would be bought online and they begin to switch.  So now on johnlewis.com a third of sales are in the fashion category.  Customers will now buy a £6,000 summer-house online and certainly no problem about £1,500 television.  Afterall we have trained everyone to buy £5k holidays online

So, what do you do about this sea-change in how customers shop – do you “fight the last war” or do you work out what the new “terms of trade are”?

We think in John Lewis that the answer is omni-channel retail.  What is John Lewis famous for:

  • VALUE – “never knowingly undersold”;
  • our ASSORTMENT – the breadth of what you can buy in Oxford Street JL or on JL.com;
  • the SERVICE – that our Partners who co-own the business bring with good advice and real care for customers;
  • and TRUST – that you know you can bring anything back you bought in John Lewis and we will replace it without fuss.

These factors: V-A-S-T – equal “VAST”, an approach devised by John Spedan Lewis, founder of the Partnership, who gave his business to its employees between the 1920s and the 1950s.

We believe that this VAST Concept is as relevant to the Retail World of 2011, as it was to 1921 and 1951!  What we have to do is to present our core values in the new multi-channel world of

  • Shops
  • Online
  • Mobile
  • International as well as UK
  • Facebook, Twitter and Blipfoto

The shopping experience of 2015 will of course be very different from the shopping experience of 2005

  • Customers will expect to try in the shop and then buy online
  • They will look online and buy in the shop
  • They will buy on their smart phone and pick up in the shop
  • They will get advice in the shop and order from the call centre
  • They will bring online orders back to the store for a refund

People will want the same service and the same products in any and indeed all channels.  You will expect our Partners to be able to look after them with the same high level of service wherever they bought the product.

So the IT Director or CIO has to be able to “join it all up”.  This is easy to say and, of course, hard to do.  BUT at least our challenge is very clear.

Now, I mentioned at the end of my list of Channels, Facebook and Twitter.  They are of course but the latest – and staggeringly successful – manifestation of the way that technology is simply very cool these days.  Thank you, Steve Jobs and Mark Zuckerberg

You have to be there in the social networks, simply because your customers are.  Any company that does not agree that social networks matter should adopt the dodo as its logo.

The original Dot.Com Revolution was one-way.  People built shops online where you bought things – they even tried to make web sites look like shops.

This Dot.Com Revolution (call it 2.0 if you like) is two-way.

  • If we get good service we want to tell our friends about it
  • If we take a great picture, we want to share it with people interested in our passions
  • If I get poor service, I am going to tell the World – the viral complaint-song “United broke my guitar” being a great example of this
  • Woe betide you if you let someone down and they post on Twitter or YouTube and it goes viral

Recently, John Lewis put up on YouTube – with links from Facebook and Twitter – our John Lewis Oxford Street designer fashion show.

Personally, I try to ‘practice what I preach’ with a Blog on WordPress; my Twitter and Blipfoto accounts – and two books published electronically and on paper on Lulu.

The new National IT Skills Academy skills and training site

I would not normally plug products in my blog, but this is going to be a shameless plug, in what I believe is a very good cause…

I feel passionately that we in the UK IT industry need to continuously improve our skills and our skills training, and – very importantly – widen access to technology training and skills throughout the economy.

I have long been a supporter of e-SkillsUK, and I am privileged to be Chair of our latest venture which is the National Skills Academy for IT.  

The Academy has just launched what we hope will be a very useful site and will make a real difference in this area. This is aimed at helping individuals and SMEs in the UK, who need broad access to IT skills but at affordable prices.   

The Academy has therefore brought together IT training content from multiple sources (including globally-recognised training provider SkillSoft). This will give individuals and small businesses access to the type of high-quality IT training and resources that up to now have only been available to large corporations.

It’s basically a subscription service for over a thousand online courses from bite-sized chunks to the knowledge needed for major certifications. Mentoring, e-books, test preps and express guides are also available .  

The subscription will also provide access to resources for solving immediate problems, plus up-to-date knowledge from IT industry experts.  There will be news as well as articles, reference materials, tools and templates.  And the whole content is to be regularly refreshed to keep it current.

The Academy is providing unrestricted access to all of this content at a price of £95 for the first year. If you would like to see what’s there, please do take a look at  http://www.itskillsacademy.ac.uk/subscription   and spread the word about it.

I would be very interested in knowing what you think of this new Academy initiative. I am also keen to hear about people’s experiences of using the tools available as we go forward, so we can continue to improve it.

We now need to drive for economic growth! Technology is the key

Now we are past the Government’s Spending Review, technology is the key to sustainable economic growth.  IT underpins public-sector productivity improvement and also private-sector business growth.

Creating the best technology skills pool in the world should be the UK’s strategy for growth across ALL industry sectors.

Consider the following:

First, Information Technology holds the key to innovation and global competitiveness across the whole economy.  IT supports the majority of future job creation in the western world.

Second, about half of Europe’s productivity gains in recent years can be attributed to IT.

Third, IT is at the heart of new fast-growing economy sectors from low-carbon to biotechnology to space.

Fourth, the technology sector delivers £71 billion a year in direct Gross Value Add (GVA) contribution to the UK Economy.

Fifth, the technology professional workforce has continued to grow throughout the Recession.

So, on the assumption that IT will grow at four times the UK average for the next 10 years, we will need over 100,000 new people a year to enter IT careers in the UK to be competitive.

I believe passionately that the future success of the UK as an economy and a society, and our national growth prospects and future jobs, will be driven by the availability of bright capable e-skilled people.

It is important that IT professionals, business people, students and anyone who cares about the future success of this country makes this point loudly and clearly.

IT is a UK success story – and it matters even more now.

The Fog on the Tyne

“The Fog on the Tyne…” was the name of the first cassette – yes, a pre-recorded cassette – that I bought back in 1971, by Lindisfarne of course.

Actually, there was no fog on the Tyne when we celebrated 20 years of BA’s IT in Newcastle, UK, recently – it was a beautiful Friday evening. And the next morning, as I headed back to London, the rising sun shone over the stunning Millennium Bridge…

British Airways established an “IT Shop” in Newcastle way back in 1990, and its anniversary is indeed cause for celebration. In the afternoon, there were awards to the 12 founder recruits of “OnTyne Systems”,.which became “Im Newcastle” and is now “BA Technology Services Newcastle”.

There were pictures on display culled from corporate and personal history over what has clearly been a pretty lively 20 years. There were cutting-edge in-house animations and a showing of the now justly-famous “Road to Amarillo” video – you need to be an insider to appreciate this one, but you can imagine…………..

Willie Walsh was there for the whole event and thanked everyone for their magnificent support of BA over the last two decades, and especially during our recent volcanic ash and strike periods, when BA Technology Services Newcastle staff volunteered as cabin crew and worked shifts in the call centre, as well as managing the many IT system changes required with effective professionalism.

So why am I telling you all this? Well, British Airways have stuck by our investment in IT on Tyneside. Back in 1990, when the then Prime Minister John Major – yes, John Major – opened Cragside Court on the banks of the Tyne this was a very important sign of the future for the North-East of England. Several of the original recruits to the IT team had previously worked in shipyards, which had then closed or were closing down. Indeed, the author of the excellent Speedbird NCL Twitter-feed on airline news telle me that he worked in the shipyards early in his career.

So what is my point? Well, since 2006 we have expanded our Newcastle IT Centre both in numbers of staff and in our skills. This is decidedly counter to the prevailing outsourcing trend over the last decade, which has seen much IT work go to Bangalore and Mumbai.

Great things have happened in Indian IT, of course – and I wrote about them recently on this blog– but great things are happening in UK IT too. OnTyne Systems started as a coding shop doing the “less exciting” back office HR and finance systems.

Now we have Newcastle fully integrated into everything we do in BA Technology. They still support legacy HR and finance, but the crew and airport systems are also supported and developed there, as is our award-winning web-creative centre of excellence. We also have our outsourced IT call centre there, so our Newcastle Office includes something of everything.

Why Newcastle? Well, we have great people working for BA there at very competitive rates, reflecting the cost of living – as well as the great quality of life – in the North East. Our Newcastle Centre itself works with Indian partners to support its work, making Newcastle even more cost-competitive. We have also run two graduate recruitment campaigns and we have strong ties with local universities and schools.

The quality of our recruits both experienced and new graduates, is excellent – and some of them do great animations as well!

So I do urge UK companies to consider investing more in UK IT in the Regions. It’s not an alternative to India – it’s part of a cost effective smart-sourcing strategy that ensure you keep control of your own strategic systems whilst securing overall high quality and lower costs.

And of course, as Willie mentioned in his speech at the event, not only do we have excellent IT skills, we have committed colleagues who are also volunteer trained cabin crew and call centre agents – and perform miracles with the systems!

Business-savvy technologists and IT-smart business people are the key!

So what would you say when called on to do a keynote speech to a group of young IT professionals?

I was asked to do this by eSkillsUK at this morning’s conference for our Professional Programme (growing their business skills with the OU and Lancaster Business School).  Difficult!

I was asked “to give you some insights into both your company and your IT career” –  a subject fraught with challenges for me, if ever there was one, especially now with volcanic dust clouds and strikes.

So where did I decide to go with this theme?  I started with my view that British Airways – and all airlines for that matter – have been a technology-enabled companies, right from the late 1960s when my predecessors connected global stations with copper wire, minimal storage and processing power.

Since then, airlines have invented Frequent Flyer programmes, Global Distribution Systems and low cost fares on the web.

Almost every process that gets an aircraft airborne is supported or delivered by IT.  About a third of our bookings and more than two-thirds of passengers now check-in online.  Well, so what is this telling us?

My background is not technical – I was a civil servant and I have a degree in history. But I have always been passionate about using technology to solve business or public administration problems.

Those on the Professional Programme, I said, have one of the scarcest and most valuable skills sets in the economy today.   Business people who understand IT and how to deploy it – and IT people who understand what the business needs and can articulate it – underpin the competitiveness of many industries in our globalised economy.

IT matters in fashion design, architecture, benefits administration, the NHS, retail, pharmaceuticals, transport… You name it, it needs IT.

So, I told them, their career choice of IT was a great one: they should tell their colleagues – who had gone into finance or the law or wherever – how central they and their fellow IT professionals are to the economic future of the UK.

I suspect there was some scepticism about this message, but I reminded them that such a statement would not sound eccentric in Shanghai, Bangalore, Boston or Palo Alto:  the UK needs to recognise the importance of technology to business success and the value of business-savvy technologists.

Then I ran them through my schedule for today – from looking at improving customer service though innovative IT at Gatwick Airport first thing to this morning to an eSkillsUK Board this evening , and much else between.

Just one day’s illustration of IT in business and business in IT.

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