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Southwest Airlines’ Digital Transformation Takes Off

Rolling out new software is hard in any company, but it’s even harder when your employees still send faxes.

Southwest Airlines’ Digital Transformation Takes Off
[Photo: Flickr user Andy Blackledge]

Southwest Airlines’ hub in Dallas exists in a world of constant hecticness. Love Field, one of the city’s two main airports, is as close to a private Southwest airport as you’re likely to find. On any given day, Southwest operates 180 flights out of the airport; apart from a few Virgin America and Delta flights, Love Field is Southwest’s home turf. Southwest’s corporate headquarters is even located there.

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Now this busy airport and the 8 million fliers it serves each year are at the center of an amazingly complicated project: Southwest’s effort to digitize massive swaths of the airline experience and migrate employees used to working with ancient tools like logbooks, radio, pneumatic tubes, and whiteboards to 21st century-style digital communications.

A big part of this migration is a project called OpsSuite–a web-based app package that handles many of the tasks that ensure travelers make it safely from destination A to destination B. With OpsSuite tools, Southwest’s employees monitor gate assignments and use, ensure luggage is loaded onto aircraft, and track a myriad amount of other traveler data. If an employee inside an airport needs information from a plane that is sitting at the gate, they use OpsSuite. If workers at LAX want to know what the logistical ramifications are of a storm in Dallas, they use OpsSuite. A whole lot of data goes through OpsSuite–data the airline needs to know in order to operate. Currently based over the web on conventional PCs and laptops, Southwest plans to bring OpsSuite’s functionality to phones and tablets in the coming years. This change will make employee communications significantly easier at the airline, which has operations spread across dozens of airports.

OpsSuite is part of a larger $800 million technological overhaul at Southwest that includes $300 million invested in new technology for operations and $500 million in a new reservation system. Southwest, which prides itself on low consumer costs and therefore is hesitant to overspend on operations, has been slower to migrate to digital solutions than many of its rivals. For instance, unlike Southwest, JetBlue and Delta employees frequently use tablets to record information. Even though the change costs money, Southwest needs such innovations to stay competitive–and the airline does expect, by 2020, to see significant earning boosts as a result of the software and related workflow improvements.

Southwest Airlines handles immense amounts of data in the course of a typical day.

Why Fax Machines Still Exist

OpsSuite was built by Southwest and a Texas-based software design and UX firm, Projekt202, which specializes in what they call “complex digital transformations” for their clients. Projekt202 works with clients like Mercedes-Benz Financial Services, Capital One, Neiman Marcus, and Samsung to both improve the user experience in existing online products and develop new digital tools and websites.

Jenny Bean, Projekt202’s acting creative director, says the project began over three years ago.

One of OpsSuite’s biggest selling points is making it easier for Southwest’s employees and contractors to see when a task was completed, and allowing employees thousands of miles apart to collaborate digitally on tasks like tracking in-transit aircraft, making sure gates are prepped for arrival, and overseeing equipment maintenance without picking up the phone or sending a fax.

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“A lot of what [Southwest] help with is being able to find time stamps or ways to start tracking that,” Bean says. Because Southwest’s employees work in extremely busy airports, switching to apps–something the airline industry has been slow to adopt compared to similarly complicated fields like health care–significantly eases the behind-the-scenes communications process, since employees often turn to whiteboards or faxes when phone calls are rendered impractical by noisy airport working conditions.

Indeed, OpsSuite deals with a massive amount of data–according to a Slideshare presentation published by Southwest, the platform consumes more than 10 million messages posted daily both by employees and the software they use. Before OpsSuite’s deployment, employees at Southwest used a complex web of older software programs, paper logbooks, and phone communications for these tasks.

Airlines like Southwest need products like OpsSuite because of the unique challenges they face. On the one hand, airlines serve millions of travelers daily and need to keep massive amounts of data flowing between colleagues who may be hundreds or thousands of miles apart. On the other hand, airlines can’t afford major disruption from software issues, which makes software deployments especially challenging. IT errors at airlines can significantly delay travelers or even risk lives. Because airlines rely on complex IT systems to keep track of planes, passengers, and cargo, IT outages can increase the likelihood of pilots or air traffic personnel making errors.

A major computer outage grounded United domestic flights in January 2017, and a five-hour-long systems outage at Delta cost the airline $150 million. Southwest isn’t immune from these sorts of issues either; a systems outage in 2016, which Southwest traces back to a router failure, cost an estimated $54 million and led to days of delays. According to an employee memo by Southwest CEO Gary Kelly that was later published by Bloomberg, “When the router failed, the data . . . piled up like a freeway traffic jam . . . Like it or not, we live with some old technology.”

Software upgrades at airports can easily go wrong on a huge scale; one recent software deployment gone wrong at Customs and Border Protection led to a massive delay processing passengers at airports across the U.S.

As a result of this conservatism, airlines and airports frequently use older tools like Windows 3.1-based computers and fax machines, which went out of fashion in much of corporate America years ago.

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Putting together OpsSuite involved a large number of steps for Southwest and Projekt202.

”A Simultaneous Heart Transplant, Brain Transplant, And Face-Lift”

Software replacements or upgrades at airlines often resemble a game of Jenga. Henry Harteveldt of Atmosphere Research Group, an industry analyst, says, “These systems are incredibly complex. Changing out any one of them is equivalent to doing a simultaneous heart transplant, brain transplant, and face-lift.”

As OpsSuite rolls out, it replaces the complicated and antiquated web of tech and communications systems that were already in place. Harteveldt notes that, due to aviation’s unique nature, the commercial airline industry does not invest as much in technology as a percentage of revenue than some other industries. This means that older systems stay in place longer at airlines than they might at, say, an e-commerce company. As a result, upgrading systems and software is much more complicated because the systems they are replacing are older.

In fact, Mark Sims, managing architect at Projekt202, says that “Southwest is going through an exercise of upgrading their technology and applications that are 15, 20, and even 25 years old. Systems of that age tend to be desktop applications, and we saw in the Network Operations Center that the users sometimes have six or seven monitors on their desk,” he says. (The Network Operations Center is a $30 million center facility where hundreds of flight dispatchers, crew operations leads, and customer service coordinators oversee the more than 3,000 flights Southwest makes every day.) “They have two or three monitors hooked up to a Windows machine, two or three to a Linux machine, another to an ACARS machine–there are lots of different platforms,” he notes. The Network Operations Center, really, is the closest thing to a Mission Control that Southwest has.

“Airlines tend to run highly specialized IT setups,” Harteveldt explains. “Unlike retail banking and some other industries where there is a lot of widely available software and systems that might be used, airlines tend to use industry-specific software only from a handful of providers. The unique challenge for airlines also is that a small number of applications actually power, in turn, hundreds or perhaps thousands of other applications.” Airlines need hundreds or thousands of specific applications to help flight planners, pilots, maintenance teams, and customer service representatives do their very different jobs. Because airlines use a handful of high-level software products like OpsSuite and then build a large number of products on top of them–and any software rollout risks problems which can delay flights–these setups can be extremely complicated.

An Airline’s Worst Enemy: Delays

David Loose, a senior technology manager at Southwest who oversees airport operations and cargo areas, says “irregular operations”–delays caused by bad weather, cancellations, and other causes, end up creating spiraling problems for airlines. OpsSuite helps Southwest deal with these issues much more efficiently by transmitting real-time info to personnel and streamlining communication between employees in different departments; in some ways, it functions a bit like a Slack or WhatsApp for employees.

Irregular operations such as a weather-related airport closing, Loose adds, “can result in a major disruption to an airline’s operations and its on-time performance, or OTP, which is the airline’s ability to operate its flights on schedule. In the hypercompetitive, operationally focused airlines industry, OTP is a closely monitored metric. A couple of percentage points up or down in an airline’s OTP is huge, given the costs of delayed flights to the airlines and their customers.” By working in tandem with other Southwest software tools, OpsSuite saves money for the company by enabling employees to communicate more quickly and share information when every second counts. A big part of this highly expensive software rollout for Southwest is making sure the airline (and its employees) reap the benefits of faster communication and easier coordination when things go wrong.

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When a flight is delayed or canceled, problems stack up for the airline. Planes that were supposed to fly to another airport and depart from that second airport can no longer make it in time for their next scheduled flight. It’s a scenario that every commercial airline has to deal with, and one that requires significant IT wizardry to resolve.

OpsSuite is now being used by Southwest to handle gate management, turn management (the time between a plane’s arrival at an airport and its departure), tarmac delay management, and as a tie-in for employees with a system called “The Baker” that helps finds alternative routes for individual passengers if their flights are delayed or cancelled.

“The Baker” is a complicated flight routing system Southwest uses to move passengers where they need to go.

The Baker is another part of Southwest’s digital transformation and was implemented at the beginning of 2016. Properly called a “recovery optimization engine,” it helped lead to on-time performance on days with poor weather or other challenges that was 10%-15% higher than similar days before the system was adopted. During three major snowstorms in the winter of 2016, it contributed to on-time performance of over 70%–which largely outperformed rivals Delta and American during those storms.

The Baker’s system helps Southwest do things like predict potential delays and find airplanes for airports if there are weather problems. Airlines typically have an airplane fly in from another destination, unload passengers, and then have a new group of passengers board and fly to another destination; a storm in one part of the country can lead to delays in another part of the country as a result. This system allows dispatchers and other employees to solve weather-related issues much more quickly than it was before.

According to Southwest, the airline is currently expanding OpsSuite and the digital transformation to the actual boarding process. Southwest hopes to complete that process in 2018; this process includes expansion of OpsSuite to places like the Network Operations Control Center. OpsSuite’s rollout there offers modern software for tasks that were previously completed on paper or with substantially older computer programs–their operations impact every part of the airline, from ticketing to cargo to customer service.

Rolling Out

A big part of the reason OpsSuite takes so long to implement is that the airline needs to make sure software works safely in new environments, and that Southwest’s employees–who are used to these older methods–are comfortable switching over to very different technology.

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Jeffery Hillis, Southwest’s senior director for technology, says a big part of OpsSuite is making sure that the airline is able to quickly push out information to employees. Because airports are high-pressure places where even a one-minute delay can lead to irate customers or delayed flights, this is a small but important change.

OpsSuite has already led to improvements in Southwest’s performance. Peter Eckert, Projekt202’s cofounder, says one of the first parts of OpsSuite to roll out was a tool that helps with decision making when the airline is dealing with delays or bad weather. The tool automatically reviewed and evaluated potential solutions–things such as rerouting flights or shifting unused airplanes from one airport to another–and assigned them a score. These scores were then recorded in Southwest’s system to speed recovery on future days with inclement weather.

“To improve the customer experience of an airline, there are a lot of places to look,” Eckert tells Fast Company. “Ironically, days after the launch of (OpsSuite’s) first test, the airport in Austin was hit with a Texas-sized storm that cut power to the entire facility for 24 hours. Using the new tool set included in their OpsSuite system, Southwest personnel were able to recover from the weather event faster than ever before, including faster than other airlines. Overall, we saw significant improvements in their on-time performance metrics on inclement weather days with the deployment of this new system.”

The recovery improvement on days with inclement weather, Projekt202 adds, is approximately 15%.

Stock Prices Versus IT

Southwest’s effort is part of a larger sea change in the airline industry. Because software upgrades at airlines are so complicated, they’ve largely taken place as a result of mergers–both Alaska Airlines’ merger with Virgin America, and United’s merger with Continental resulted in a host of IT changes, for instance.

The last major acquisition by Southwest was AirTran, at the end of 2014. As an airline, Southwest has preferred slow growth to sudden, large-scale acquisitions. This conservatism has benefited Southwest’s shareholders and, arguably, their passengers and employees–but it’s also meant a tech backend that lagged behind the airline’s competitors. At the same time, the approach appears to work for Southwest as a company: Southwest is the highest-performing airline stock on the Dow Jones Transportation Average, and expanded to serve several international destinations in 2014.

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Neglecting technology investments, however, can cause big headaches for airlines down the road. For Southwest, the equation is simple: They need to upgrade their employee technology game to stay competitive and attract the best talent. As a publicly traded corporation, they’ve been up front about prioritizing such things as their stock performance, ticket prices, and turnaround metrics. Now they need to show the same commitment to their employees’ experiences at the company. For Southwest, those cumbersome fax machines and whiteboards might just be a thing of the past.

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