Jet Blue Case Study
JetBlue Hits Turbulence
Case Study
1. What types of information systems and business functions are described in this case?
The information systems that were described in this case were as follows:
-Transaction processing system (TPS). Automated key processes such as; ticket sales, baggage handling, and reservation system.
-Management information system (MIS). The system used for managing planes, crews and scheduling was run by an outside contractor.
-Communication System was in place but was not adequate in maintaining stability and proven to be unsuccessful, during this crisis.
2. What is JetBlue’s business model? How do its information systems support this business model?
To provide top-notch service at an affordable low price was JetBlue’s business model. JetBlue maintained a simple atmosphere; employing non-union workers, flying only the Airbus A320 permitting standardized flight operations and maintenance procedures, and updating its business processes to the minimum level of efficiency. The management information systems were also ran by one outside contractor, allowing a small staff that permitted in-house development of systems instead of relying on outsourcing or consultants. Lastly, the company spent 1.5 percent of its revenue on information technology, unlike their competitor’s investment of 5 percent.
3. What was the problem experienced by JetBlue in this case? What management, organization, and technology factors were responsible for the problem?
JetBlue’s spending of only 1.5 percent of its revenue on information technology compared to 5 percent by competitors, was a bad decision. Increasing the spending on IT would have been a proven investment, reflecting greatly in a crisis such as this ice storm. Cutbacks in spending are appropriate at times however the following problems are a result of the lack of IT within the JetBlue company:
- TPS used by JetBlue was adequate for normal operating conditions, however when flights were
Case Study
1. What types of information systems and business functions are described in this case?
The information systems that were described in this case were as follows:
-Transaction processing system (TPS). Automated key processes such as; ticket sales, baggage handling, and reservation system.
-Management information system (MIS). The system used for managing planes, crews and scheduling was run by an outside contractor.
-Communication System was in place but was not adequate in maintaining stability and proven to be unsuccessful, during this crisis.
2. What is JetBlue’s business model? How do its information systems support this business model?
To provide top-notch service at an affordable low price was JetBlue’s business model. JetBlue maintained a simple atmosphere; employing non-union workers, flying only the Airbus A320 permitting standardized flight operations and maintenance procedures, and updating its business processes to the minimum level of efficiency. The management information systems were also ran by one outside contractor, allowing a small staff that permitted in-house development of systems instead of relying on outsourcing or consultants. Lastly, the company spent 1.5 percent of its revenue on information technology, unlike their competitor’s investment of 5 percent.
3. What was the problem experienced by JetBlue in this case? What management, organization, and technology factors were responsible for the problem?
JetBlue’s spending of only 1.5 percent of its revenue on information technology compared to 5 percent by competitors, was a bad decision. Increasing the spending on IT would have been a proven investment, reflecting greatly in a crisis such as this ice storm. Cutbacks in spending are appropriate at times however the following problems are a result of the lack of IT within the JetBlue company:
- TPS used by JetBlue was adequate for normal operating conditions, however when flights were
References: Duvall, M. (2007, April 5). What Really Happened At JetBlue. Retrieved from http://cioinsight.com Laudon & Laudon. (2009) Management Information Systems: Managing the Digital Firm, 11th edition. Upper Saddle River, New Jersey: Prentice Hall.