Qantas suppliers hit by $2bn cost cutting endeavour

[Flashback]

Qantas suppliers hit by $2bn cost cutting endeavour - Hardware - Technology - News - iTnews.com.au

Qantas will review how much it spends with its top 100 suppliers as part of an “accelerated cost reduction program” which could see a number of IT workers lose their jobs.The national airline today revealed it would cut at least 1000 jobs over the next year after announcing an expected pre-tax loss of up to $300 million for the six months to 31 December - a result it attributed to “seriously deteriorating” trading conditions.
It will now attempt to achieve cost savings of $2 billion over the next three years across all areas of the business by freezing pay and abolishing bonuses for executives in FY2014, cutting the pay of CEO Alan Joyce and the Qantas board, sacking at least 1000 workers over the next year, and reviewing its spending with its top 100 suppliers.
Qantas relies on outsourcers for as much as 80 percent of its IT - partnerships which chief information officer Paul Jones last year told iTnews had saved the airline around $30 million in costs.

 

[Mwenenzi]

look here http://www.australianfrequentflyer....jobs-possibly-selling-56071-3.html#post946602

 

[Pushka]

IT workers haven't really enhanced the website of recent times.

 

[Mal]

Plenty of outsourcing fat that can be removed.... Perhaps. Just depends how well the contracts have been written.

 

[QF029]

If they bring ASA's back online they could get rid of a call centre agent or two (or free them up to take more bookings).

 

[wunala]

Why reduce the morale of the face of Qantas even more? They are the ones that we judge the airline by. They are the ones that pass their dissatisfaction onto us (not all do). 1 or 2 Board/Upper management "natural attrition" would cover the wages of the 1000 workers - give or take a few.

 

[Standby]

IT is certainly 1 area most companies look at from a cost perspective..see finance industries who gave been brutal irrespective of their profit. But IT is just one area that's under scrutiny .QF seem a bit different to banks where all are locals and co-incidentally just happen to charge within 0. Nothing % difference in rates, fees &penalties .. Now that's a level playing field most other business aside banking and Groceries wud like to be able to play in.
Qantas has the same rights to demand better deals from suppliers, just as their customers demand travel spend savings. The real question is why it has taken to now to do what most businesses consider standard practice. It's clear QF have too higher cost, both staff and fleet cost, current management haven't been nimble enough to deal with the former and the business is suffering the later because of Dixons "brave" decision to chase Airbus vision of 4 engine guzzlers with the A380 when better cost effective alternatives (see 777s )were the way to go.its a shame because I rate them a better end to end experience now than a couple of years ago.

 

[thewinchester]

IT workers haven't really enhanced the website of recent times.

I honestly don't know where to begin with this one Pushka. Describing the comment as ignorant seems be a good place to begin.

Corporates are sensitive to any changes on their websites, as they're they public faces of their brands. And big, wholesale changes are never smart as they annoy too many people at ones. When websites break, it means people go elsewhere - and they've got lots of options especially in the airline industry.

In times past, if you wanted to buy online - it was an airline website you visited. Now every mom and pop travel agent can sell fares online, and there's a major travel consolidator website or ten for every country on the planet.

Then you have to look at the resource and capacity constraints of the groups and people needed to maintain them, and deal with the politics (project management and stakeholder management) to try and get changes made. Just have to look at how VA stuffed their underpinning res/loyalty system changeover earlier this year - flyers are still smarting from it.

Airline websites then take on other layers of complexity, as they don't control the underpinning systems which control core functions - bookings and reservations, as they lease these from companies such as Amadeus, Sabre, Navitare et al. Working with 3rd party vendors to achieve changes properly in a way that worlds for all is a complex, time consuming process that requires the best minds and attention to detail.

Website changes must be incremental, planned months sometimes years in advance, and done in a way which improves experience over time. And they must have good reasons to be changed - which is driven by consumer feedback, input, industry best practice, and business demands of course.

From my experience watching QF's work as a customer over the last 18mths, they've done reasonably well. Sure, they'll always be a small minority who don't like change or specific changes, but overall what they have done as worked for the majority of their customers.

There's always more work to be done, and there's always more work being done behind the scenes which the majority of us won't hear about, see, or know is being done, until it launches.

As they say in the classics, Rome wasn't built in a day.

 

[anat0l]

I honestly don't know where to begin with this one Pushka. Describing the comment as ignorant seems be a good place to begin.

Corporates are sensitive to any changes on their websites, as they're they public faces of their brands. And big, wholesale changes are never smart as they annoy too many people at ones. When websites break, it means people go elsewhere - and they've got lots of options especially in the airline industry.

In times past, if you wanted to buy online - it was an airline website you visited. Now every mom and pop travel agent can sell fares online, and there's a major travel consolidator website or ten for every country on the planet.

Then you have to look at the resource and capacity constraints of the groups and people needed to maintain them, and deal with the politics (project management and stakeholder management) to try and get changes made. Just have to look at how VA stuffed their underpinning res/loyalty system changeover earlier this year - flyers are still smarting from it.

Airline websites then take on other layers of complexity, as they don't control the underpinning systems which control core functions - bookings and reservations, as they lease these from companies such as Amadeus, Sabre, Navitare et al. Working with 3rd party vendors to achieve changes properly in a way that worlds for all is a complex, time consuming process that requires the best minds and attention to detail.

Website changes must be incremental, planned months sometimes years in advance, and done in a way which improves experience over time. And they must have good reasons to be changed - which is driven by consumer feedback, input, industry best practice, and business demands of course.

From my experience watching QF's work as a customer over the last 18mths, they've done reasonably well. Sure, they'll always be a small minority who don't like change or specific changes, but overall what they have done as worked for the majority of their customers.

There's always more work to be done, and there's always more work being done behind the scenes which the majority of us won't hear about, see, or know is being done, until it launches.

As they say in the classics, Rome wasn't built in a day.

I think you'll find in the end consumers don't care. They want something to work and they want it now now. And they don't care if the company had to sacrifice a small goat, a sixteen-year old virgin or the first son of every employee in the company in order to make it happen / fix the problem.

You could put that bolded part on a billboard. Sure no one would have an objection to that.

More seriously, there's a slew of comments on why the new Qantas website doesn't work. Is it something which Qantas decided to take a risk and needs to be incrementally improved, or is it more a case of a risk which was way too large and has had serious consequences? Is it a bit like someone six months down the track who still has a skeleton kitchen with renovation works going when they could've done nothing and still had a fully functioning kitchen (with no extra cost, I might add)? There's a healthy amount of people who want the old site back. I'm not going to touch ASAs - that's a war unto itself.

I'll confess and say that I would wager most people - especially not on AFF - couldn't actually give two bits. The website, for most of what they need to do, does work. It's not the most effective or efficient website, I'll say, and there are several key UI/UX flaws. They really don't have time to complain about it's functionality unless it prevents them from doing what they want to do. Just as most people don't really kick up the stink they think they should about traffic in the morning because they'll still end up using the car or bus to get to work.

If I wanted to book a ticket for BNE-SYD next year, I can do that with the site. I can even attach my QFF number to it. It does take about 10-50% longer in time to complete this task compared to the old website.

Not playing devils or any which way or not - just laying out the landscape here.

In any case, should it be a case of for the IT people, "off with their heads"? Well, history has somewhat shown us that interfacing people with their imminent mortality tends to drive desired results or at least reduce inefficiency... but then again let's be even more honest... the website / web development is only one service offered by IT contractors (assumed! They could be in house staff). I'd say there's a lot in the backend and a significant amount in data storage and support for the thinking engine within Qantas Loyalty. Then, will the entire 1000 jobs be from IT? No! But of course IT jobs almost make an easy target for cuts in a way (given the little respect given to technological and IT infrastructure generally in the corporate arena).

 

[JohnK]

If they bring ASA's back online they could get rid of a call centre agent or two (or free them up to take more bookings).

Yes and more double SCs offers and more often. That will definitely fix the problem.

 

[Kendall Roy]

I thought their IT outsourcing was done on the cheap anyway?

457 visa rorting: Workers accuse Indian IT giant Tata Consultancy Services of visa abuse - ABC News (Australian Broadcasting Corporation)

 

[Flashback]

I thought their IT outsourcing was done on the cheap anyway?

457 visa rorting: Workers accuse Indian IT giant Tata Consultancy Services of visa abuse - ABC News (Australian Broadcasting Corporation)

Ah.. don't be fooled into thinking it is cheap just because it is an Indian resource...

 

[Kef]

Qantas suppliers hit by $2bn cost cutting endeavour - Hardware - Technology - News - iTnews.com.au

Call centre and IT support offshore?

 

[whatmeworry]

Ah.. don't be fooled into thinking it is cheap just because it is an Indian resource...

Might not be low quality but allegedly almost 200 out 211 of the TCS working in Australia are 457 visa holders. Don't know if anything has changed since the last election.

HAYDEN COOPER: At Qantas, TCS is known as a tier one partner. It's held a $120 million IT contract with the airline for the past seven years. But its Australian based staff working on the account are almost all brought from overseas. This is the list of TCS workers at Qantas. Of the 211 names almost 200 are on 457 visas, filling roles like business analysts, project managers, even accountants. This woman doesn't want to be identified because she's looking for work in the IT sector, but the former business analyst was employed by TCS, and says she witnessed an open reliance on 457 visas at the expense of local graduates.

http://mobile.abc.net.au/news/2013-06-20/workers-accuse-it-giant-of-457-abuse/4769796#transcript

 

[Flashback]

Might not be low quality but allegedly almost 200 out 211 of the TCS working in Australia are 457 visa holders. Don't know if anything has changed since the last election.

Workers accuse IT giant of 457 abuse - ABC News (Australian Broadcasting Corporation)

Sounds similar to my experience with TCS ops in the UK.

 

[JohnK]

Might not be low quality but allegedly almost 200 out 211 of the TCS working in Australia are 457 visa holders. Don't know if anything has changed since the last election.

The 457 visas have become a joke in Australia. You should not be able to overlook an Australian looking for work because you can pay someone on a 457 visa half the salary the Australian demands.

Unfortunately in my experience you would be lucky if you got 1/4 of the productivity. Probably even less if you factor the time it takes to continually manage them.

One particular person has been with us for 12 months now. She came highly recommended and was the expert "bug" fixer. Ha! Her English is barely functional and she cannot start a job without the lead holding her hand. And once she starts the job there are 72 conferences with others around her desk in their language to ensure they have understood the request/specification correctly.

Yep. Great value for money.

 

[SeatBackForward]

Cmon John, surely you've picked up a little bit of Hindi by now??

 

[JohnK]

Cmon John, surely you've picked up a little bit of Hindi by now??

Not Hindi. We have a few in the office and they are some of the better recruits.

 

[MrHyde]

My experience has been that recruiting good people is hard work, no matter where you get them from. Recruiting requires very careful evaluation of the person before they are brought on board. For example, when recruiting people of Indian/Chinese origin, the standard of English is a key criteria for us as we know Indians have strong accents (my accent is still noticeable after 20 years in Australia) and the Chinese are terrible speakers (but their written English is the best I've seen).

I know most of the major outsourcers heavily utilise 457s and that is their business model. In my view that is perfectly legitimate if the end user gets the benefit as they spend less money on IT and can spend more money elsewhere to grow their business.

In our company, the policy is to hire Australians first (citizens), then PRs and finally, if no choice look at 457s. In the past three years, we have hired 4 457s, from India, Singapore, South Africa and USA. The one from India - his English is not so good - but he is a brilliant and capable worker.... we have just helped him become a PR. He was our first experience with 457s and he was better than most of our Australian hires. The one from Singapore never showed up for work. We later found out that he joined one of the big SIs in Australia instead, but never bothered to tell us that he won't be joining us. The ones from South Africa and USA were fired after 2 months because they were completely incompetent.

These days, most of the CVs that comes across my desk is from Indians and we know most of them aren't as good as what we want, so we push them harder during the interview process with questions whose answers can't be learnt through google - put questions that require real analytical thought processes to them and see how they come out - also allows us to guage their English skills, both spoken and understanding and thereby reveal the real gems from amongst them.

 

[cmon0005]

In our company, the policy is to hire Australians first (citizens), then PRs and finally, if no choice look at 457s.

Slightly OT, Not being a employment law expert or anything, but as far as I am aware you cannot prioritise a citizen over a PR when it comes to recruitment and that could be considered discrimination? Someone on a temp visa maybe, but a PR I think not.