Cathay Pacific

In: Business and Management

Submitted By t08679
Words 817
Pages 4
| |Cathay Pacific |


To: Edward Nicol, Director of IM

From: Anthony Yeung, General Manager of IM

CC: Jakob Iverson

Date: 2/05/2003

Re: Cathay Pacific Outsourcing Process


Once again, welcome back to Cathay Pacific! I thought I would take time to articulate the current state of Cathay’s outsourcing processes and more importantly present my recommendations to revise our methodology in managing our strategic partners that will enable future success.

Understanding we are in a mode to reduce costs to compete in this industry, Cathay has outsourced several key IT functions over the past 5 years, with now 65% of our operating budget being managed outside of Cathay. Our first two major initiatives, dubbed “smartsoucing”, were initiated in April 2007. We outsourced our infrastructure to IBM and our applications to SABRE Airline Solutions. Although these two vendors were not exclusive vendors, it was clear they were definitely preferred! In December 2007, we outsourced our data center that we had built in 1995 to IBM as well. In 2001, we outsourced our desktop environment also to IBM. We followed that up in November 2002, when we outsourced our e-business infrastructure to Hewlett-Packard.

Edward, listed below is my assessment of the outsourcing process that was in place and my recommendations to improve going forward.

1. Our IT group is no longer writing code for ourselves, they are being asked to manage the suppliers along with understanding our IT value to the business. This is a different skill set, however, it is a crucial role to be able to control IT, show the value, and bridge the business as a cohesive team. We need…...

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