How SpiceJet’s CIO Found an Innovative Way to Lower Staff Costs

Summary:

The intriguing story of how SpiceJet’s CIO found an ingenious way to save costs by limiting IT support staff—from what could have been 300—to 30.

There was a time, in the not-so-distant past, when airlines evoked only one emotion in the average Indian traveller: Sticker shock.

You can hardly blame them. Airlines were a snooty lot and were seen as a luxury only for the privileged. That isn’t true anymore. And that’s because, the average Indian traveller has found an empathiser in low-cost airlines. Their arrival has made airlines down-to-earth and affordable.

In that bracket falls India’s second largest low-fare airline, SpiceJet.

The Organization: With over 300 domestic flights catering to 46 Indian cities, SpiceJet is owned by Kalanithi Maran’s Sun Group. In February 2005, SpiceJet ordered its first 20 Boeing aircrafts and it started with launching an airline in Delhi.

The Business Case: Last month, the airline sparked a price war by slashing rates to fill in planes in the lean period between March-September. This forced other low-cost airlines to follow suit. That’s a clear indication of the mounting heap of cost pressures troubling low-cost airlines. But fierce competition and a low-margin business are forcing airlines to cut costs and optimize resources.

That’s something Virender Pal, CTO, SpiceJet, realized way back in 2006.

He knew that as SpiceJet introduced new routes, it would need more IT staff to manage ground IMS operations. But some engineers hired for the job weren’t being adequately utilized. Which is why they left the organization. Pal had two options: one, to outsource airport support, or hire a huge army of support engineers, every time a new station is announced. Airport support is a 20-hour job which is divided into two-and-a-half hour shift of eight hours each. This would typically mean that SpiceJet would require at least five to six IT personnel—in every airport— adding up to a packed 300-member consolidated IT team. And this number would multiply as and when new routes are introduced. Clearly, option two wasn’t the way forward. “The idea was not to compromise on quality, but to do more business economically, and save more money,” says Pal.

It was then that Pal came up with an innovative idea.

The Solution: Pal decided to form a band of IT champions. The best place to pick IT champions was SpiceJet’s Delhi office where a one week induction training of new hires—airport customer service agents—was going on. He was also eyeing his existing customer support staff.  These IT champions were chosen over others on the basis of a few elementary parameters ranging from the way they kept or handled their computer systems and their inclination and interest towards technology at the check-in counters.   These customer support agents were then trained on basic IT support operations such as configuring and replacing highly-specialized network and boarding pass and baggage tag printers, handling computer systems, troubleshooting software issues, with the local airport staff and the core IT engineers at the head office in Gurgaon. A refresher training was also repeated after a few months for the selected IT champions. Additionally, a four-member group from the core-IT team in Gurgaon visited all the airports that SpiceJet operated in to meet the IT champions and stay abreast of the problems they were facing.

At any particular airport, there are multiple service providers that support execs have to liaison with. For instance, in case there’s an error while printing boarding passes at the check-in counter, the SpiceJet customer support staff—now also IT champions—is equipped to troubleshoot it.

In the absence of an IT-trained ground staff, this problem would not have been addressed in time, leading to delayed flights. The Benefits: The IT champions have given SpiceJet more than just efficient operations.

Had Pal not taken the IT champion route—a small but powerful team of 30—SpiceJet would have had to recruit about 300 IT staffers at all the airports. “Our customer service levels have gone up as our teams are highly motivated in their roles,” says Pal. Not only do the IT champions understand the urgency of a situation, they are also passionate about learning new skills which earns them an additional monthly allowance of Rs 2,000 each.

The current cost of personnel is just 5 percent of what it would have been in the conventional support architecture. Today, these IT champions are helping SpiceJet cruise the skies with renewed vigour.

The idea was not to compromise on quality, but to do more business economically, and save more money.

The idea was not to compromise on quality, but to do more business economically, and save more money.