Week 7 Case Study Assignment Instructions
Summary
The end-of-chapter application case “Continental Continues to Score with Data Warehouse” will be
used to evaluate the probable costs, benefits, and implementation hurdles of using a data warehouse
We started this book with an opening vignette from a Teradata success story.
This last case is from a similar success story, also covered in Chapter 8.
Continental’s success with using a data warehouse to improve its revenue
management, customer service operations, and so on has been widely
reported (Anderson et al., 2004; Watson et al., 2006). Wixom et al. (2008)
have studied on Continental’s continued success and interesting new uses of
its data warehouse. Although these are not futuristic uses, these cases
suggest the potential for what can be done to continue to exploit
investments in BI technologies.
Wixom and colleagues had studied the use of data warehouses at
Continental in the late 1990s. They recently returned to the company and
conducted follow-up interviews with the users and developers of the data
warehouse. They learned that the data warehouse has become an integral
part of the airline’s operations, helping it make strategic and tactical
decisions. When a system becomes part of the daily operations, it indicates a
different level of acceptance in a company’s culture. It also usually means
that the number of users may grow substantially. The warehouse now
supports over 50 subject areas and more than 1,400 users writing ad hoc
queries to generate business intelligence to make better decisions. In the
following sections, reproduced (and adapted) with the authors’ permission, a
few new uses are highlighted (Wixom et al., 2008):
Tax Department, London
In the United Kingdom, Continental must pay a departure tax for passengers
who leave the UK on Continental flights. Each month, employees in the London
office calculated this departure tax by manually reviewing the records for every
passenger who traveled out of London, and the employees submitted the
appropriate amount to the government. If passengers are passing through the UK
in less than 24 hours, they are exempt from the tax, but the manual process
could not always identify those individuals. Thus, Continental regularly overpaid
1
the departure tax, which equated to a $300,000 annual cost for the airline. Last
year, several members of the Continental London office were visiting Houston for
routine training, which included a presentation by the warehouse group. During
the presentation, the London employees noticed that data in the warehouse
potentially could identify passengers who were exempt from the departure tax.
They approached the warehouse team to build a specialized application. Now, the
group runs a monthly query to the warehouse, prints out a report with an
accurate departure tax amount, and submits the report. The application
eliminates significant time and overpayment.
Flight Performance
Prior to the data warehouse, Continental Operations built and managed their
own information and reporting systems. The systems support staff was very
small; when a support employee went on vacation or was sick, systems were put
on hold until the person returned to work. Eventually, management mandated a
move to the warehouse to improve continuity of the support operations. Steve
Hayes, a manager within this operations support group, has leveraged the
warehouse for his area in significant ways. For example, he has built a real-time
status application that communicates up-to-the-minute performance statistics on
how the airline is operating. And, when Jet Blue and American Airlines were
criticized for incidents that involved stranding passengers in planes for long
periods of time (Cummings, 2006; Zeller,2007), Hayes was able to adapt his
application, and help Continental avoid similar situations. Continental’s old
process for detecting these kinds of events was manual and time consuming.
Hayes explains, “You had to hunt and peck through flight logs. In the middle of a
snow storm, you don’t have time to do that.” Once Operations identified the need
to monitor planes on the tarmac, Steve added an alert to the real time
performance statistics application. Now, flights that sit on the ground away from
a gate for at least 2 hours immediately appear on the screen. In real-time,
Operations can work to get those flights off the ground, or get them back to the
gate in a timely manner.
The warehouse also has helped streamline Operations reporting processes.
In the past, Continental manually tracked the reasons for flight delays (e.g.,
weather, part failure); there are about a hundred delay codes. Sometimes
stations forgot to record the reason for delay, so Operations regularly ran a
query on the legacy system, downloaded the results into Excel, e-mailed the
2
results to the general managers, who would then fill in the blanks and send
information back by e-mail or telex. According to Hayes, “It would take
forever to track down the information and update the codes into the legacy
system.” Using the warehouse, Hayes built an application one weekend that
automatically lists flights that need delay codes for each station. The general
manager now directly logs into the application, clicks on a flight, and enters
the delay code. The new process eliminates multiple steps, and creates
much more accurate results. Hayes explains that this situation is
representative of how he now can quickly develop simple applications or
application enhancements using the data warehouse that have high impact
on Operations processes.
These examples are just two of the many new uses of the data warehouse at
Continental. Wixom et al. (2008) describe many others and also list the
following as facilitators in continuing success of BI at Continental:
• A common data foundation
• “Open data” philosophy
• A culture of data
• Personnel who are business–IT hybrids
***Grading Rubic and Deliverables***
Category
Points
%
Evaluation of probable costs
25
35%
Evaluation of benefits
25
35%
Evaluation of implementation hurdles
20
20%
Total
70
100%
Case Study Paper
Your goal now is to write a two-page paper using 12-point, double-spaced, Times New Roman font in
order to research and answer the questions below.
What were the costs involved for Continental Airlines when it attempted to use a data
warehouse?
What were the benefits involved for Continental Airlines when it attempted to use a data
warehouse?
3
What were the implementation hurdles involved when Continental was trying to use a data
warehouse?
What did you learn from this activity, and do you think data warehouses are a worthwhile
investment for a company? Why?
4
