Continental Airlines: Outsourcing IT to Support Business Transformation
Continental Airlines: Outsourcing IT to Support Business Transformation
Prepared by Neils Christensen and Keri Pearlson
As the Texas sun began to set, Janet Wejman, the Chief Information Officer for Continental Airlines looked out the window of her Houston-based office and considered what her next move should be. It was now November 1996 and while she had only been with the company for a few months, she faced a dilemma relating to the airline’s information technology outsourcing agreement with Electronic Data Systems (EDS). The ten-year contract was beginning to show some strains as a result of the dramatic changes that had taken place at Continental since the contract’s inception. Tensions had developed between some of the: Continental and EDS staff regarding expectations of what services should be provided by the agreement and more generally, what an outsourcing relationship required of each of the respective parties.
Management of Continental’s participation in the outsourcing relationship fell to Wejman in her new role and she had to formulate a plan to meet the needs of the airline without ignoring the perspective of EDS. In many respects, the relationship, which Wejman viewed as generally good, had been very successful and mutually beneficial for both parties. However, recent managerial changes coupled with an improved financial performance and outlook within Continental necessitated that the expectations of the outsourcing relationship be reviewed with EDS so that together the parties could determine the best approach to go forward. The issues being discussed, as well as the changes that had occurred, would have implications for the appropriate structure of Continental’s internal IT functions and Wejman considered how best to manage this process. Wejman wanted to improve the relationship with EDS and define an IT vision for Continental. As she prepared for a meeting with Continental’s President and Chief Operating Officer, Greg Brenneman, Wejman
Prepared by Neils Christensen and Keri Pearlson
As the Texas sun began to set, Janet Wejman, the Chief Information Officer for Continental Airlines looked out the window of her Houston-based office and considered what her next move should be. It was now November 1996 and while she had only been with the company for a few months, she faced a dilemma relating to the airline’s information technology outsourcing agreement with Electronic Data Systems (EDS). The ten-year contract was beginning to show some strains as a result of the dramatic changes that had taken place at Continental since the contract’s inception. Tensions had developed between some of the: Continental and EDS staff regarding expectations of what services should be provided by the agreement and more generally, what an outsourcing relationship required of each of the respective parties.
Management of Continental’s participation in the outsourcing relationship fell to Wejman in her new role and she had to formulate a plan to meet the needs of the airline without ignoring the perspective of EDS. In many respects, the relationship, which Wejman viewed as generally good, had been very successful and mutually beneficial for both parties. However, recent managerial changes coupled with an improved financial performance and outlook within Continental necessitated that the expectations of the outsourcing relationship be reviewed with EDS so that together the parties could determine the best approach to go forward. The issues being discussed, as well as the changes that had occurred, would have implications for the appropriate structure of Continental’s internal IT functions and Wejman considered how best to manage this process. Wejman wanted to improve the relationship with EDS and define an IT vision for Continental. As she prepared for a meeting with Continental’s President and Chief Operating Officer, Greg Brenneman, Wejman