Delta's Web Strategy Takes Flight

Delta had already spent more than $150 million to overhaul its aging information systems, which, until then, were a tangle of disparate, often unconnected databases that might give passengers one departure time on an airport monitor and a conflicting time inside the Crown Room Club. "It was a nightmare," says Feld, who oversaw the drive to rewire the carrier's airport operations. Today, analysts say, Delta has a technology infrastructure at least equal to those of other major airlines -- and a robust base for its push onto the Web.

But to capitalize on its investment, Delta had to form an effective decision-making organization that was focused on the Web. Its solution: a three-tiered structure that was designed to spur innovation within the company and to attract ammunition from outside. First, Delta identified nine broad e-business opportunities -- among them expanding its reach to small businesses, enhancing the customer experience, and selling to leisure customers. The company appointed a senior executive to be a strategy owner for each opportunity. These owners became the brain trust, charged with seeking Web initiatives that could meet business demands.

Next, Delta appointed a team of e-enablers, Web-savvy representatives from across the company's various functional units. Strategy owners can call on e-enablers to determine how a locally invented strategy will work in practice, function by function: What is the effect of a segmented online-marketing push on distribution? How can an airport's flight-information system be integrated with its reservations system?

Finally, West created the e-Ventures squad. He wanted there to be a group of specialists at the company who were without other responsibilities and who were able to throw themselves full-time into e-commerce implementation. "We needed people who could get going quickly, who could start moving against these opportunities without worrying about their day jobs," he says.

West dedicated two of his own executives to the team, and had Boston Consulting Group (BCG) bring on another five executives as full-time contractors. That was last October. Within three months, the team had identified more than 50 prospective partners for a dozen or more possible deals.

The chase was on. By May, Delta had settled a deal with e-Travel Inc., which provides travel-service software to large corporations, to steer customers directly to Delta's online-reservations system. The deal helped Delta reduce agency reservations fees and gave e-Travel new corporate leads.

Delta also formed a partnership with TRX Inc., which will fulfill online orders for MYOB ("mind your own business") Travel -- myobt.com -- a new site that is aimed at small-business customers. In April, Delta agreed to partner with PeoplePC, which will provide PCs and training to most of Delta's employees. These deals happened at lightning speed. "It's unbelievable how fast these guys move," says Nick Grouf, 32, PeoplePC's founder, chairman, and CEO. "For an organization of 75,000 people, Delta is incredibly nimble."

The Way to Go Wireless

Delta can move fast because the e-Ventures team acts as a hub for strategic information, coordinating tactical relationships across the company. The squad doesn't determine strategy per se; that job is left to business units and, ultimately, to Delta's executive committee. But "e-Ventures is our strategy conscience," says Michele Burns, 42, Delta's treasurer and senior VP of finance, who oversees the team. "The group looks at each initiative and asks, Does this conflict with anything that we're doing now? Does it fit with what we could be doing?"

Such coordination wasn't critical for a transaction such as priceline's, which only involved Delta's finance, network, and distribution operations. But consider Delta's agreement in April to develop wireless services with partner SoftNet Systems Inc. Beginning later this year, the partners aim to offer broadband wireless-Internet services to Delta passengers in up to 54 U.S. airports. If the plan flies, customers will be able to check email, retrieve updates on travel information, and get Web-based entertainment services by plugging an access card into their laptops.

And that's just the beginning. Delta will extend seamless wireless access to hotels and convention centers. It also wants to use the same technology to create wireless links for its airport employees. Baggage-cart drivers could be carrying handheld computers with wireless access to get updated gate information for arriving flights. Gate agents could reduce lines by checking in passengers using wireless links to the central ticketing system.