Graded Homework

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 inChapter 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 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 agate 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 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?

·
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?