Air Asia's Strategic It Initiative

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Air Asia – Strategic IT Initiative

Submitted by: Charles Kho Sandy Hofman Aruan Christian Tjitrahardja Ramaratnam Narayanaswamy

Faculty of Economics and Commerce University of Melbourne 2005

306-669 Strategic Enterprise Systems

Group Project

Executive Summary

IT is one of the major enablers of AirAsia’s successful low cost business model. Based on the environmental scanning performed, the demand for Low Cost Carrier (LCC) is expected to expand rapidly attracting more players to join the market thus increasing the degree of rivalry within the industry. In responding to this condition, it is imperative for AirAsia to continuously identify new sources of cost advantage so that it can provide the lowest possible price to the price sensitive customer and improve its market position. In this project, Advanced Planning and Scheduling (APS) system is recommended as the new source of AirAsia’s cost advantages. Using Venkatraman and Henderson’s model APS fits smoothly to the Technology Transformation Perspective where business strategy acts as a driver. The functionalities provided by APS system to improve AirAsia’s performance include event management technology, supplier portals, inventory planning, demand forecasting, maintenance management, and route profitability analysis. As a result of implementing APS system, AirAsia can obtain both strategic and operational benefits. AirAsia is strongly recommended to outsource the development of APS system. As project management plays critical role in ensuring successful implementation, it is suggested that AirAsia follows the recommendation provided in terms of planning, structure, practices, and postimplementation strategy.

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306-669 Strategic Enterprise Systems

Group Project

Table of Content

Executive Summary .......................................................................................................... 1 Table of Content................................................................................................................ 2 1.0 2.0 Introduction .............................................................................................................. 3 Business Strategy Analysis ...................................................................................... 5 2.1 2.2 2.3 2.4 3.0 Company Background..................................................................................... 5 Mission Statement and Value of AirAsia ......................................................... 5 Business Strategy ........................................................................................... 6 Environmental Scanning ................................................................................. 7

Strategic Alignment Analysis.................................................................................... 9 3.1 3.2 Current IT Implementations ............................................................................. 9 IT Implementations and Strategic Alignment................................................. 12

4.0

Advanced Planning & Scheduling (APS)................................................................ 14 4.1 4.2 4.3 4.4 Why APS Matters and Its Role In The Supply Chain Management .............. 14 APS Development ......................................................................................... 15 Functions Provided by APS System.............................................................. 16 Benefits of APS implementation .................................................................... 16

5.0 6.0

Outsourcing ............................................................................................................ 20 Project Management .............................................................................................. 23 6.1 6.2 6.3 6.4 Planning ........................................................................................................ 23...
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