The Business Of Technology

by Randy Sloan, SVP & CIO, Southwest Airlines

As the CIO of Southwest Airlines, my role is to think strategically, ensuring that our Technology organization plays a key part in achieving Southwest’s vision to become the world’s most loved, most flown, and most profitable airline. In order to approach that vision and take steps to realize it, myself and the rest of Southwest executive leadership leverage the Technology organization in such a way that it becomes a business partner and provides solutions that deliver tangible, competitive solutions to drive measurable business value and company growth.

In many cases, regardless of industry, technology falls into one of the top five expense categories of a company. If technology fails to articulate the business value behind that kind of spend, the IT organization will never be given serious consideration by executive leadership and company decision-makers and will consistently face pressure to reduce costs. In my three years at Southwest Airlines, I have been particularly focused on transforming the technology organization to ensure we are fully integrating ourselves with the rest of our business to provide high-value business solutions. Throughout this process, technology at Southwest has garnered critical executive support from both the CEO and CFO and is building a great foundation for our company to realize the benefits of innovative solutions that drive company growth now and into the future.

Transforming Technology to Deliver Value to the Company’s Strategic Goals

In order to truly deliver business value, a CIO and his technology organization must first understand the business. In my role at Southwest, that means that I must be up to speed on our key business metrics—revenue, seat miles, fuel costs, labor costs, and fleet management costs—and the business capability set required to meet the underlying targets. Without this critical understanding of business drivers, the Technology organization cannot hope to solve business problems in a way that will deliver the desired value back to the rest of the business units.

Southwest is heavily reliant on Technology to deliver on the company’s strategic imperatives, which include transitioning to one reservation system and integrating a new type of aircraft into our fleet over the next two years. In order to ensure technology is pushing Southwest forward toward these strategic goals, my leadership team and I have been leading an all-encompassing technology transformation at Southwest. We began with a complete restructure of Technology’s operating model and have since worked to optimize the technology function that partners with our business, update our governance processes, incorporate new technologies, rethink our resourcing strategy, and pinpoint new key metrics and incentives to help us assess how we are progressing against our goals. The purpose of this transformation is threefold: 1) to allow Technology to meet high business demand, 2) to ensure the increased investment that comes with higher business demand is deployed in a way that delivers enterprise solutions that are highly integrated, serving cross-functional business needs, and most importantly, 3) to provide a career with a cause for our technology employees. With the recent transformation of our operating model, processes, and technologies, along with our consistent push for continuous improvement, our technology organization has been delivering quality solutions to our business that are directly improving the Southwest customer experience, modernizing our company as a whole, and driving us towards achieving our company-wide strategic goals. In the last three years, we successfully launched the 737-800 aircraft, integrated the acquisition of AirTran Airways, increased the number of cities served by Southwest to approximately 100, and launched Southwest’s first ever international service. Over the next three years, we will leverage a new reservation system to drive new product and service offerings and the combination of mobility, Big Data and Analytics, and the power of Cloud computing to personalize our already outstanding service to every customer with innovative improvements to our customer experience.

Changing the way we think about CIO’s

In order to create technology organizations that are empowered to deliver business value, grow a company, and provide competitive advantage, we have to change the way business decision makers think about CIOs. The CIO is the advocate for the technology organization and a critical partner with the business at the executive level. Successful CIOs continuously balance priorities and maintain strong relationships—becoming close colleagues with the CEO and CFO without isolating themselves from functional stakeholders within the business. Instead of clinging to a Technology-centric perspective, the CIO should regularly meet with peer leaders to align priorities and technology investment requests with the strategic imperatives of the business. We are positioned to be thought leaders within our companies and we must step up to that challenge.

Additionally, successful CIOs mindfully manage financial performance and take responsibility for the implementation and adoption of change taking place in an organization. Typically, CIOs have large budgets to work with, and using that money with an enterprise mindset promotes increased trust between a CIO and other executive leadership. A CIO’s credibility will only increase if technology commitments to the business are met in a cost-effective manner through disciplined planning and quality delivery; a great solution can only be truly valuable if it is accepted, adopted, and used by the company.

Lastly, if a CIO and the technology leadership team are to play a part in meeting a business’ strategic goals, we must be strategic and make time for forward thinking instead of getting stuck in the weeds of the day-to-day responsibilities. While running the daily business with quality is required to maintain a seat at the boardroom table, a CIO must spend time observing trends across different industries, creating and considering innovative ideas, and getting involved with extracurricular activities such as corporate boards or nonprofits. These experiences, plus individual research and study on topics of interest, can be game-changers that move a technology organization to be more strategic, enterprise-focused, and value-driven.