High Performance at High Altitudes: KLM Royal Dutch Airlines

High Performance at High Altitudes: KLM Royal Dutch Airlines

KLM Royal Dutch Airlines (KLM) is an international airline offering passengers and airfreight shippers more than 113,000 connections throughout the world. After merging with Air France, the new Air France-KLM group serves 226 destinations worldwide, operates a fleet of 556 aircrafts and employs more than 106,000 people.

KLM and Accenture: Co-sourcing to achieve innovation

Accentures partnership with KLM spans more than three years and is founded on achieving innovative capabilities and high performance results that give the airline a competitive edge. One of the first areas of collaboration for the two companies involved establishing a co-sourcing partnership to develop and enhance KLMs Webbased applications, both intranet and Internet. By creating a co-sourcing approach, KLM enjoyed the benefits of having a dedicated in-house team composed of Accenture and KLM employees, and focused on long-term business goals as well as on short-term cost cutting measures. The arrangement is easily adjusted and can flex to accommodate the changing nature of KLMs business. Accentures deep industry and domain experience help ensure that new levels of business performance are achieved rapidly. Accenture also offered technology solutions like the Accenture General and Reusable Net-Centric Delivery solution to accelerate the development of the Webbased applications. The two companies worked closely to create new shared process ideas, technical innovation and project management methods to improve operational performance. KLM and Accenture solidified the co-sourcing team by christening it UnITor "United in Information Technology. The team operates interdependently within the broader information technology (IT) community of KLM. It aims to decrease time to market as well as the cost of delivery of Web applications, and introduces best practices to be adopted across KLMs IT organization. KLM and Accenture employees work side-by-side at a KLM site, with Accenture responsible for day-to-day operations, project management and the co-sourcing teams results. The first achievement of the team: the creation of a single high performance electronic booking tool that would replace the current set of proprietary and third-party outsourced tools, and enable the airline to provide its own reservation system online. The solution was seen as a way to add new front-end, electronic business functionality to KLMs Corda central reservation system.

Dirk Kronemeyer, director of eProduct development for KLM: "The e-booking tool makes it much easier for customers to do business with KLM anytime, anyplace, anywhere. Within a few seconds our customer can find out what KLM has to offer and book a ticket. The tool will be a key accelerator in achieving our goal of 40 percent online sales by 2007.

Branded fares increase customer satisfaction and business performance

The online booking tool was designed to move KLM away from processing reservations through myriad points of entry that used a variety of engines. The new system is integrated within KLMs IT environment, and uses a single booking engine for all Web channels, countries and points of sale. A leading-edge J2EE packaged booking solution was chosen to jumpstart the solution and enable high performance. Given the global scope and complexities of the application, the electronic booking system was implemented in an aggressive 11month timeframe. In February 2003, the pilot went live in France. Based on the success of the pilot, the online booking tool was rolled out across an additional 61 countrieswith more locations targeted in the future. The KLM and Accenture team focused next on enhancing the companys online presenceensuring that it was significantly easier and more customer-responsive than those of competitor airlines. The team developed a solution that moved performance to a higher level: the Branded Fares concept. Branded Fares makes shopping for tickets online considerably easier. KLMs site differs from its competitors because it provides a transparent view of different cost options. How? The system color-codes flight optionsgolden tones representing the least expensive and purple the most expensiveso that fares are transparent and choices are clearer. A calendar view is also available to end usersdays of the week are coded with colors so that passengers can see how changing departure or arrival dates can impact the final fare. The Branded Fares approach allows KLM to calculate final fares with tax included and take into account any discounting. The end result: significantly easier customer transactions and flexibilityand higher loyalty among buyers.

From online tickets to online training

Training is critical to any service business and particularly crucial to the success of an airline. KLM had conducted employee training in a decentralized fashion, with each division of the company executing it differently. Each division had invested in different solutions resulting in a diverse range of platforms. The resulting patchwork of systems, software and platforms made standardized learning impossible. Higher costs, registration and certification problems also arose. KLM turned to its trusted partner Accenture to architect an online learning solution that would unite the disparate approaches across company divisions and so improve operational performance. The project team created an approach to maximize return on investment in training while boosting business performance. The joint team configured and deployed a standard online learning platform that gave the responsibility for the content and execution of the training to the divisions. To streamline the training process, administrative tasks are centralized through the new approach. This learning solution delivered instant availability of training, consistency and standardization of training approach, and increased employee empowerment and performance. The integrated approach is expected to pay off in other ways as well. It will lead to significant process efficiencies and realize substantial labour cost savings.

Bernd van Diemen, Vice President ICT Development for KLM: Co-sourcing with Accenture gave us access to world-class project-management, architecture and technology capabilities.

Taking less costs to process non-revenue tickets

KLMs Travel and Meeting Services Department is responsible for arranging work and leisure travel for KLM employees. Each year the department handles more than 130,000 non-revenue tickets for the airline staff. Yet, the requesting, processing and distribution of tickets was labor-intensive and mostly manual. A significant number of full-time employees handled the non-automated processes and transactions and three different systems were used. The end result: an error-prone, costly approach to non-revenue ticketing. KLM turned to Accenture with its deep industry expertise and insight to make its employee ticketing run as smoothly and efficiently as its customer processes. The project team developed a high performance booking tool that allows employees

to request non-revenue tickets without involvement from the Travel and Meeting Services Department (T&MS). The business-to-employee (B2e) Booking Tool is a self-service, Web-based application offering around-the-clock access. It offers a transparent view of available flights and ticket costs. The system recognizes users through an SAP HR interface, and can automatically levy associated flight charges to the appropriate departments. The tool

also provides management information about system transactions and functionality. Another benefit of the approach: employees are free to focus on value-added services that will boost KLMs business performance. The booking tool will help KLM reduce T&MS staff and will significantly reduce supporting tools/applications.

From waiting in line to checking in online

In November 2003, KLM became the first carrier in Europe to introduce bar-coded boarding passes, resulting in quicker service for passengers and greater efficiency for KLM and from Schiphol Airport, Amsterdam, as well as from 46 other countries. The KLM Internet Check-In tool enables passengers using an e-ticket departing from any of these enabled airports to print their boarding passes from their personal computers. The barcode offers a mechanism instead of using common boarding passes, so passengers do not need to use those anymore. Besides the barcode makes it possible to print from the Internet, decreasing time spent in lines at the airport and thus increasing customer satisfaction. With the new system, passengers go straight to high-speed baggage drop-off points where their documents are checked, and their bags are weighed and linked to their boarding passes through a barcode reader. Passengers without baggage can proceed to the gate immediately. Self-service kiosks enable passengers who havent printed out their boarding passes before arriving at the airport to print them there without waiting at a check-in desk. Over the course of the 15-month project, Accenture was responsible for overall IT project management and Web application development. The Accenture and KLM team was able to reuse technology assets from previous projects as well as standard Accenture Web application development products. This accelerated the time to delivery of the new system, reduced costs and moved KLMs performance to new levels. KLM now aims for a worldwide roll-out of the self-service check-in. The Internet Check-In system will improve staff efficiency and reduce overall operating costs. The system will also drive more users to use KLM e-tickets because the service is only open to passengers booking this type of ticket. Besides the solution will increase synergy between KLM and its US partner Northwest Airlines, which already uses bar coded boarding passes. The success of the project is spreading. Basic Aira unit of Transavia Airlines that is owned by KLMrecently adopted the system. The back-end functionalities were replicated from the KLM system, creating significant development savings and increasing performance. The front end has been designed to reflect the Basic Air brand.

For more information please contact: Marc A. Schuuring, Partner Apollolaan 150 1077 BG Amsterdam marc.a.schuuring@accenture.com www.accenture.com

Bart Vos, Senior Vice President Distribution and eCommerce for KLM: "KLM and Accenture have worked as a seamless team and together have realized some of our most ambitious goals. Accenture with its proven experience was the business partner that was capable of navigating the range and complexity of projects that the project team accomplished.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With approximately 90,000 people in 48 countries, the company generated net revenues of US$ 11.8 billion for the fiscal year ended August 31, 2003. Its home page is www.accenture.com.

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