Audit Report 2013
This report aims to draw our attention to our outsourced system, Navitaire, an Accenture owned system, which is used for reservations and check-in. The system crash in September 2010 has caused Virgin to suffer a huge compensation payout and affected its reputation as a rival to Qantas.
Audit report found numerous IS risks with our current system as we have outsourced our reservations system. Due to circumstance such as technical and financially it is practical to outsource to external service providers. The level of risks range from high to low and most risks are in the high range with implications to Virgin as shown in the table.
An audit plan is drawn up using the risk-based approach and incorporating the IT governance controls addressed by the SOX and COSO framework will be discussed. They are classified into areas of IT functions, computer centre operations and disaster recovery planning.
We further classified areas of control such as whether they are preventative, corrective or detective. In addition in the aspect of physical control, segregation of activities have to be set in place as well as and access controls as well as a back-up site in an event of emergency.
Table of Contents
Background to the case
Audit Plan and Objectives
Interview Questions & Document
Background to the case
Virgin is using an outsourced system, the New Skies Reservation System from Navitaire, a subsidiary of Accenture for its flight reservations and check-in. Navitaire has been in the business for about 10 years which deals with accounting and offering sales audit solutions to external companies through the years it has acquired Hewlett-Packard’s Open Skies airline reservation division. (Navitaire LLC An Accenture Company, 2013).New Skies are currently used by airlines especially those that range from low cost to mid-tier carriers.
According to (ATW Plus, 2009), Virgin Blue has been using Navitaire’s Open Skies system since its launch and has migrated to the New Skies system. New Skies system is preferred over its predecessor as it integrates Internet bookings; calls centre reservations, global distribution services (GDS) connectivity and real time reporting.
New Skies system is built on open technologies and is an integrated system comprising of four platforms namely:
Planning and commercial
Distribution and sales
Pre-day and day-of-travel passenger experience platform
Reporting, analysis and performance platform
In September 2010, the New Skies system server that is hosted in Sydney crashed. It was reported from Navitaire that the solid-state drive server that hosts Virgin’s application failed. Navitaire is using the Texas Memory Systems RamSan solid-state storage array, which is built to hold entire databases front ended by a NetApp V-Series controller.
According to NetApp, this V-series in such a high-IOPS (benchmark for computer storage devices) application should be installed as a high-availability pair with RAID protection of the back-end storage when it is hard disk drive-based. Issue here is whether Navitaire installed any RAID protection as they are using SSD hard drives.
This hardware failure resulted in Virgin’s Internet bookings, reservations, check-in and boarding systems being crashed. As a result, Virgin was forced to cancel more than 100 flights, which have affected over 100,000 passengers (Foo, 2010). This has disrupted Virgin flights nationally as well as some international flights. Apparently, this crash is the second time for the system since its last upgrade in which Virgin spent $10 million.
According to Virgin’s service agreement with Navitaire, any mission-critical system outages are to be remedied within a short time (Foo, 2010). However, this has not happened as Navitaire took...
References: ATW Plus, 2009. Air Transport World. [Online] Available at: http://atwonline.com/operations/virgin-blue-opts-navitaires-new-skies-0 [Accessed 1 May 2013].
Foo, F., 2010. Virgin system crash may spark multi-million dollar payout. The Australian.
Jarvis, A., 2008. Tech radar. [Online] Available at: http://www.techradar.com/news/computing-components/storage/ssd-failure-rate-is-10-20-per-cent--268368 [Accessed 2 May 2013].
Navitaire LLC An Accenture Company, 2013. Navitaire. [Online] Available at: http://www.navitaire.com/faq.aspx#NV_03 [Accessed 1 May 2013].
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