When information overload hit the information technology department at Vancouver International, officials concluded that IT support wasn't one of the airport's core businesses and outsourced it. By contrast, when the same thing happened at Las Vegas McCarran International, officials decided to beef up their in-house team to take on the new work.
The dichotomy is consistent across the board. Like Las Vegas, about 50% of airports handle IT support internally. The rest, like Vancouver, farm out parts considered to be noncore, says Jim Martin, senior director-ARINC Managed Services. Vancouver, however, is among a small but growing number of airports that have decided to outsource all of it. ARINC late last year won a five-year level-of-service contract to maintain and support the entire IT infrastructure theremore than 50 different systems in all.
The coup started innocently enough. When the airport bought a common-use passenger check-in service from ARINC four years ago, it also requested ongoing maintenance for the system. Later, when it added 60 self-service kiosks, AMS, a wholly owned ARINC subsidiary, was a natural fit to take on that upkeep work as well. AMS was spun off last year to provide performance-based IT services at airports and in other sectors.
After off-airport check-in kiosks and a new bag screening system were added, a decision point was reached. "We had integrated all of our systemsflight information display system, self-service kiosks, access control doors, check-in and boardingand we had 10,000 devices hanging off the network," says Kevin Molloy, the airport's VP-simplified travel. "The rapid growth was putting a strain on our resources, and we knew we would need to move to a 24/7 support mode." Enter AMS. Martin says the contract allowed Vancouver "to focus on airport development and customers" rather than IT support. AMS recently won a similar deal with Dallas/Ft. Worth International.
Vancouver wasn't the first airport to make such a decision. In August 2005, Düsseldorf Airport contracted its IT support to ARINC competitor SITA. John Jarrell, SITA senior VP-airport and desktop services, says the 10-year, $200 million contract covers "a total 100%" of the airport's IT. SITA two years earlier launched a less comprehensive arrangement at Belfast City Airport in Ireland. Jarrell said his company was on the verge of announcing another 100% outsourced customer at this writing.
Aside from giving airports the chance to focus on more pressing topics, both companies say outsourcing saves money. Martin says his integrated team of fewer than two dozen employees at Vancouver probably comes in at half the cost and two-thirds the size of the group that would have been required if the airport managed its IT services through the "traditional procurement cycle." Under that method, an airport buys operational support for systems like signage, self-service kiosks, security, baggage and perimeter control when contracts are signed, he explains. "Each may require one or two people on-site to help with the operation of the system. If you look at this from an integrated standpoint, a properly hired and trained team of four or five people could support all of those platforms."
At Vancouver, he says AMS first inventoried every operational system under the airport's care, then hired new people locally and focused on training and "making sure we had the right expertise." AMS also last April acquired TechMart, a company that specializes in software development, IT systems support, help desks and systems maintenance.
In practice, the AMS-run service desk electronically dispatches maintenance help around the clock and escalates matters up the management chain if required. "Their whole mode of operations is how do you recover from a situation creatively?" says Martin. "It's workarounds and operational solutions first, then taking the issue away to work on permanent fixes." He says the contract calls for 97.5% of all problems to be resolved within 30 min., a LOS he says AMS has "consistently provided" since taking on the first contracts four years ago.
Düsseldorf reportedly plans on saving almost $2 million a year with its outsourcing contract with SITA. Jarrell says performance metrics were the "primary driver" behind the airport's decision: "They wanted to focus on the airport business overall; they wanted cost savings. They got cost savings." Part of the benefit of having a specialist like SITA run the operation, he says, is that it can "leverage learning" from hundreds of airports around the world. "We have that information, that knowledge," he notes, adding, "Any airport can be a good candidate" for 100% outsourcing, though many of the top 15 or 20 have large IT departments "and may have to keep it that way for political or other reasons."
For at least one major airport, the sales pitches ring hollow. "We have always taken the approach that no one would care about end users as much as we would," says Samuel Ingalls, assistant director of aviation and information systems at Las Vegas. "We felt like nobody would be quite as responsive." McCarran's IT team has 50 unionized employees who handle most of the operational and maintenance needs of the airport's networks, telecommunications, geographical information systems and airline systems. The team works 21 hr. a day and is on call for the other 3 hr. "We measure our response time in minutes," he says. "The typical service-level agreement might be hours or days. We are hyper-responsive to users' needs."
Though Ingalls says his team occasionally pulls in outside expertise, for the most part the technicians in the IT group are cross-trained on systems and even do depot-level work on most equipment, including specialty items like bag tag printers. Having those skills in-house saves shipping costs and dovetails nicely with the "valleys" in the help desk call cycles. During the usual lulls, the technicians work on equipment in the shop. "The reason we wanted to keep the service internal is that we have worked hard to build a team of folks who are interested in what they're doing," he says. "I can't remember in ten years losing even one employee. With outsourcing, you usually churn through people very quickly. My people know the airline agents on a first-name basis. They know the entire airport environment inside and out. That is a more intangible metric. Perhaps it is one of the most important."
For other airports, outsourcing doesn't fit due to timing. Toronto Pearson International is currently home to the largest construction project in Canada. Along with building new terminals and demolishing some old ones, the IT system must be kept up and running while a new system is brought online. "What we have is a dynamic situation," says James Burke, VP-IT and telecommunications for the Greater Toronto Airports Authority. "It's difficult to outsource that." Burke's IT department currently has 40 full-time employees plus contractors and consultants to "handle the peaks." One area that traditionally has been contracted out is the call center where IT and electronic faults are reported. "That is not the leading edge of technical innovation," he says. Overall, he says farming out the IT department wouldn't be a good idea because the lost continuity would impact the "massive construction effort. When we stop this, we can take a different view."
When the time comes, that view might be influenced by the likes of Martin and Jarrell. "Many companies have outsourced parts of airports for years," says Jarrell. "What we have not seen in this market is outsourcing of complete IT departments. Now that [airports] are operating like businesses even if they're government-owned, it's making more sense to consider." He adds: "Our goal is to enable operators to focus on core business, on running the airport instead of running IT systems."