1. What types of information systems and business functions are described in this case? Information systems: JetBlue’s reservation system used for tracking baggage and scheduling is an example of a Transaction Processing System (TPS) – a computerized system that performs and records the daily routing transactions necessary to conduct business. JetBlue’s system for managing planes and crews is an example of a Management Information System (MIS). The system served middle management with information obtained from its TPS that was essential in making the right decision when managing planes and crews. Business functions: JetBlue’s communication, reservation and computer systems were described in this case. They represent Sales and IT business functions.
2. What is JetBlue’s business model?
JetBlue business model was saving money both from streamlined information systems and lean staffing, while offering top-notch customer service at budget prices. The airline featured new Airbus A320 planes with leather sears, each equipped with a personal TV screen, and averaging one way fares of only $99 per passenger. JetBlue was able to offer low fares by using information systems to automate key processes such as ticket sales by mostly selling them online and baggage handling, by introducing electronic tags to help track luggage. Both initiatives eliminated paper, increased efficiency and lowered costs. Initially, JetBlue flew only one type of aircraft: the Airbus 320. This approach enabled the airline to standardize flight operations and maintenance procedures. Both measures resulted in significant savings. How do its information systems support the business model?
JetBlue used a single vendor, Microsoft, to design JetBlue’s extensive network of information systems. Using a single vendor provided a technology framework where JetBlue could keep a small staff and favor in-house development of systems over outsourcing or relying on consultants, allowing the company to keep its costs low.
3. What was the problem experienced by JetBlue in this case? JetBlue’s senior management made an incorrect decision to maintain its schedule during an ice storm. Nine airplanes were stranded on the tarmac for anywhere between six and ten hours. JetBlue waited too long to solicit help for the stranded passengers because the airline figured the planes would take off eventually. Meanwhile, the weather conditions and the delays and cancellation of other flights caused customers to flood JetBlue’s reservation system, which could not handle that much traffic. At the same time, many of the airline’s pilots and flight crews were also stranded and unable to get to locations where they could replace crews that had just worked their maximum hours without rest, but did not actually go anywhere. What management, organization, and technology factors were responsible for the problem? Management factors: JetBlue did not have a Decision Support System that would support nonroutine decision making and focus on unique and changing problems by using information from TPS, MIS and other external sources.
Such a system would allow JetBlue’s management to make a better informed decision whether or not they should maintain their schedule during an ice storm or cancel all flights. Organizational factors: JetBlue lacked an Enterprise Resource Planning System that would help significantly to help locate missing baggage and quickly locate airline’s pilots and flight crews. Technology factors: JetBlue’s transaction processing system and lean staffing were responsible for the problem. Under normal circumstances, the lean staff was sufficient to handle all operations and the computer systems functioned well below their capacity. However, during a radical increase in activity, tasks such as rebooking passengers, handling baggage and locating crew members became impossible.
4. Based on what you’ve learned in this chapter, what kinds of systems and business functions were involved in JetBlue’s problem? It seems the company did not plan for something like that to ever happen. All systems and business functions focused on performing day-to-day activities. JetBlue did not have any enterprise applications that are designed to coordinate multiple functions and business processes. Enterprise systems integrate the key internal business processes of a firm into a single software system to improve coordination, efficiency, and decision making. It would allow their SkySolver and Sabre systems to communication more effectively and efficiently. During the crisis, some flight attendants were unable to get in touch with anyone who could tell them what do for three days. The system would help locating the flight crews and off-duty crews and direct them to the correct destination. The transaction processing systems (TPS) used by JetBlue was not designed to handle a significant increase in activity.
The principle purpose of TPS is to answer routing questions and to track the flow of transactions through the organization. Due to an increased number of phone calls, the system was not able to perform those functions. It also looks like JetBlue did not have a decision-support system (DSS) in place to support nonroutine decision making. Since DSS focuses on problems that are unique and rapidly changing, it could have helped the company deal with the crisis more efficiently and effectively. Since a well designed ESS system would expose the fragility of the infrastructure, it can be assumed that company’s executive support systems (ESS) was either non-existing or did not function as intended. There was also no Customer Relationship Management System. A well designed Customer Relationship Management System would allow JetBlue better communication with its customers. During the crisis when so many flights were cancelled, the process of rebooking and looking for baggage became unmanageable.
5. Evaluation JetBlue’s response to the crisis. What solutions did the airline come up with? Throughout the debacle, JetBlue’s CEO David G. Neelman was very visible and forthcoming with accountability and apologies. On the technology front, JetBlue deployed new software that would send recorded message to pilots and flight attendants to inquire about their availability. Once the call is returned, it would be entered into a system that stores the date for access and analysis. From a staffing point standpoint, the airline promised to create backups from the airline corporate office for the departments that were stretched too thin by the effects of the storm. JetBlue also created a customer bill of rights to enforce standards for customer treatment and airline behavior. The company changed its operational philosophy to make more accommodation for inclement weather. How were these solutions implemented?
The new software was implemented by JetBlue. 100 employees from the Corporate Office were trained to serve as backups. Customer Bill of Rights enforced standards for customer treatment and airline behavior. JetBlue set the maximum time for holding passengers on a delayed plane to five hours. JetBlue would be penalized when it failed to provide proper service and customers who were subjected to poor service would be rewarded. Do you think that JetBlue found the correct solutions and implemented the correctly?\ I think JetBlue’s took a step in the right direction. It implemented a new software that would search for available pilots faster and trained additional employees to serve as backups.
What other solutions can you think of that JetBlue has not tried? I believe there are many solutions that would be beneficial to JetBlue. They are: * Creating an Enterprise Risk Management process in the organization. The process would allow JetBlue to identify possible shortcomings that might happen in the future and allow the company to be more prepared. * If JetBlue lacked expertise within the company to identified areas of concern, it could have brought outside consultants that would be able to pinpoint all of the company’s shortcomings. * The case did not talk about how JetBlue fixed its Open Skies reservations system, its website or its system for tracking lost luggage. All of the abovementioned systems failed during the crisis on February 14, 2007. Solutions such as a more powerful reservation system, an enhanced website that would allow more traffic and a computerized system for recording and tracking lost bags would be beneficial to the company.
6. How well is JetBlue prepared for the future? Are the problems described in this case likely to be repeated? Even though JetBlue made some changes to ensure that another crisis won’t happen, I am not convinced all necessary actions were performed by the company. JetBlue should be more proactive in ensuring that future problems won’t affect its operations – rather than being reactive and fixing problems that came to the surface. Which of JetBlue’s business processed are most vulnerable to breakdowns? The bigger problem for JetBlue is changing its culture and philosophy. It seems that JetBlue is still unwilling to invest significant amounts of money into modern and reliable technology and ensure they have proper staffing – that’s why I feel that IT area is most vulnerable to breakdown first. How much will a customer bill of rights help?
The customer bill of rights was designed for the protection of the customer, not the airline. It is there to ensure the airline is responsible for the unfair treatment of the customer. It will help bring some of the customers back, however, it won’t fix JetBlue’s problems to future breakdowns.