Airasia Such As Computer Reservation System Information Technology Essay
AirAsia is one of the Malaysia Airline that established for everyone who dreamed of making flying to reach ones destination. Since 2001, AirAsia has been expanding rapidly with the largest low fare airlines in which everyone can travel with affordable price and AirAsia has also awarded for the world best low cost airline in year 2010 (Miller, P., 2010) [Online]. Let’s put it in this way with a simple slogan, “Now Everyone Can Fly”, Malaysia’s AirAsia has successfully carried out and placed in customer’s mind with the largest low-cost flying trip and largest customer base.
‘Go Holidays’ offered by AirAsia at the low-cost flying trip, whereby they also offer hostel, hotels, car rental and holiday packages at discounted rates. Booking or reservation of airplane tickets can be done at www.airasia.com. Besides, AirAsia provide services such as Low Cost Carrier Terminal (LCCT) and AirAsia’s bus travel to KLIA at the lower cost. According to The Star report under the business section, AirAsia is now announced that several airports in Malaysia and regional countries will offered a self check-in service and for more convenience, customers can also use web-based check-in service (The Star, 2010) [Online].
In the year ended 2009, AirAsia reported a net profit of RM549.1million, a rise by 11% compared to the loss of RM 496.6 million incurred during 2008 (The Star, 2010) [Online].
1.2 Types of Information System
There are few types of Information System were in use in AirAsia, such as Computer Reservation System (CRS), Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) System, and Advanced Planning and Scheduling (APS) system.
CRS is a computer system used in travel industry that allowed storing, retrieving data and conducting transactions. This system was created by airlines. AirAsia used this system is to allow users to access and check seating availability, flight schedules, airline fare, booking reservations and generating tickets.
CRM is a set of applications that give companies to gain insights into customers changing needs, wants, and behaviors in order to better serve them (Haag and Cummings, 2008). This applications help AirAsia to analyse customers’ contact, so that it enable AirAsia to maintain and update electronic customer profile. Moreover, CRM also help to update online answers at AirAsia’s web page – frequently asked questions (FAQs) about their services, such as booking, online payment and etc.
ERP is the information systems to integrate the data from different functional areas of a business, such areas as planning, manufacturing, order entry, inventory management and many more (Oz, 2008). This system also help in planning and allow companies to operate more efficiency because it avoid duplication of information and avoid rework (Oz, 2008). AirAsia uses ERP system is to capturing daily operation’s transactions, manage its supply chain, and also helping to save its daily operational costs as well as to increase the operational performance to become more efficiency (Microsoft Press Pass, 2005).
APS is a type of system also known as manufacturing management process. This system is used for supply chain planning in the sense that it uses information from ERP for planning and scheduling operations (Muzumdar, no date)[Online]. APS also can be used to tracks costs based on the activities in the production of manufactured goods. However, due ERP system does not provide for better supply chain management to analyses the flexibility and intelligence required implemented by AirAsia. AirAsia therefore use APS system helps to improve AirAsia’s strategic and operational performance, classifies and clusters orders from customer, and checks resources availability.
2.0 Benefits from System Adoption
2.1 Customer Relationship Management (CRM)
A good CRM is important for AirAsia to success in airline industry. With CRM, AirAsia’s staff will easily understand and satisfy customer’s needs and wants. The benefits of CRM are such as:
(i) Reduce Operating Costs:
By using CRM system, work and activities done by AirAsia will become more systematic and coordinated. This will help AirAsia to eliminate waste of funds, such as AirAsia use web or e-mail to handle some customer’s queries or problems instead of through a call centre. This results labour cost will be reduced and business operations will become more effective and efficient. CRM also can help AirAsia to organise customer communications if AirAsia facing difficulties, such as struggles to maintain multiple mailing lists for different groups of customers.
(ii) Development of Better Relations with Customers:
Using CRM helps AirAsia to develop their customer’s relationships. CRM systems provide reliable sources to deal with AirAsia’s customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention (Laudon and Laudon, 2010). The benefit of using CRM is because this system provides a better service to customers. For example, on the first page of the AirAsia Website, which has stated the member log in button and this has proven that AirAsia always set their customers as the first priority in every consideration. The benefits of becoming AirAsia members are information provided to customers will always one’s step ahead from others (ie. promotional booking offers, news updates, and so on). All customers’ particular data are fully secured and will be guaranteed for personalization from AirAsia. (Azleen Ilias et al., 2009)[Online]
2.2 Enterprise Resource Planning (ERP) System
There are many different benefits and reasons why AirAsia choose and deploy ERP systems. These are as follow:
(i) Help reduce operating costs:
The ERP systems enable to help AirAsia to reduce operating cost and it’s a benefit when AirAsia is running company analytics. The major benefits of ERP are improved the coordination of AirAsia’s process into one streamlined process where all information can be accessed across departments through a single enterprise wide information network (Anthony, 2005)[Online]. Additional benefit from implementing ERP systems are reduced operating cost, such as lower the cost of production, marketing, inventory control, and help desk support (Anthony, 2005)[Online].
(ii) Facilitate Day-to-Day Management:
Facilitating day-to-day management activities is also one of the benefits from ERP systems. In encourages the establishment of backbone data warehouses (Anthony, 2005)[Online]. The implementations of ERP systems allows employees to access real time information and this helps with research, decision making, and managerial control (benefitsoferp, 2010)[Online]. Besides, it also can perform activity based costing and helps AirAsia to track activities’ actual costs (Anthony, 2005)[Online].
2.3 Advanced Planning and Scheduling (APS)
There are certain benefits which can be found in APS system. These are as follow:
(i) Visibility Across The Whole Supply Chain:
The benefit of using APS system is visibility across the whole supply chain. The supply chain management system will ensure each party, (ie. suppliers and customers) works together in integration in terms of cross-functional scheduling and planning. So that AisAsia will have better connectivity across the supply chain (Muzumdar, no date)[Online].
(ii) Optimizing profit management (Anon, 2010)[Online]:
The most influencing factor in AirAsia’s strategy is the price, this is because the airline competing in the low cost market. Trend analysis also benefited in that the APS system is designed to Maximised revenue of AirAsia by the existing YMS system and optimizing price strategy. On the other hand, AirAsia’s operational cost will be minimized by APS system by using YMS system to generate information to further improve AirAsia’s plan and schedule for the facilities needed (Muzumdar, no date). The integration of YMS system into the APS system ensures profit optimization.
3.0 Pitfalls to Avoid
3.1 Customer Relationship Management (CRM)
Although CRM systems have brought benefits to AirAsia, but there are still some pitfalls exist. AirAsia therefore should avoid these pitfalls otherwise a significant effect will cause AirAsia improperly operate. Listed below are the pitfalls need to avoid.
(i) Inadequate training on the CRM software (Anon, 2010)[Online]:
Anytime when a new system is introduced, employees feel lack of confident to use it and they will always try to avoid from using it. Many training consultants offered by CRM software vendors visit AirAsia during their rollout phase and for refresher sessions (Anon, 2010)[Online]. This system is highly encourage to be provided as adequate training will be given to employees and money saved in the long run even-though it is costly and time consuming (Cost Vs Benefits analysis).
(ii) Misunderstanding customer needs (Anon, 2010)[Online]:
Sometimes, unnecessary time taken to service the customers and not giving good services will affect AirAsia’s image. AirAsia therefore should respond to customers when it is needed. For example, in the CRM process, CRM manager should arrange and reply the customers’ queries that ask for the essential information through easy-to-use access. At the same time, get feedback from customers is encouraged so that able to improve company’s CRM system in future.
3.2 Enterprise Resource Planning (ERP) System
There are some common pitfalls to avoid when AirAsia implementing ERP systems. These are as follows:
(i) Lack of Time and Manpower Required For Implementation (Mutt, 2010)[Online]:
When there is a shortage of time and employees required for implementation, AirAsia may over burden the employees with their regular work by giving them extra responsibilities on ERP implementation (Mutt, 2010)[Online]. This will lead employees could not perform the ERP software properly as they are already over stress with their regular work. To avoid this happen, AirAsia should work out a proper time schedule for ERP implementation process and working hours of each employee so that each employee may contribute as per their ability in the process (Mutt, 2010)[Online].
(ii) Poor Selection of ERP Software (Mutt, 2010)[Online]:
There are many reasons result the poor selection of ERP software, however the most common cause is due to inability to identity the functional requirements. Proper cross checking of the products not aligned with the designed and derived functional requirements, lack of detailed study of the product and its characteristics also lead to poor selection which may result AirAsia fail in implementing ERP properly. Therefore, to avoid this, employees of the company at all levels should be responsible and involved in the testing and study of the product. Assistance from the external expert can be taken to improve the system. Besides, successful implemented ERP from the same industry can be use and refer for the improvement purposes.
In today’s world, the business among airline industry has become more competitive and very tough. Every company in airline industry is trying to implement some strategies to compete with each other. To survive in business world, AirAsia needs to achieve their long terms objective and compete with their competitor in the airline industry.
AirAsia has been so successful in Low Cost carrier (LCC) among all the competitors in airline industry until today and many passengers would like to travel by choosing AirAsia because they offered low fares with no hidden charges, interesting promotion packages, and many more. Recently, AirAsia had offer mobile booking via SMS (Short Message Service) and AirAsia is the first airline in the world provides this service.
Last but not least, CRM is a powerful competitive tool that always serves customers better by understanding their needs, wants, and behaviours. Through the AirAsia’s website applications, they can provide most reliable and potential airline services to customers.
5.0 How AirAsia should use Information Systems for the future, focusing on the competitive advantages of IT
As a CEO (Chief Executive Officer) of AirAsia, in order for AirAsia to improve the performance and management of AirAsia successfully in future, few competitive advantages of IT are needed to focus. However, the most important information system should focus on is Customer Relationship Management (CRM).
First of all, AirAsia shouldn’t approach to CRM initiative development that is learning from other competitors, for example fast check-in system by installing kiosks. In order to differentiate from other competitors in travel industry, AirAsia should carry out CRM program in favor of investing in initiatives with a high return, which will respond to customers’ needs and desires. Therefore, in order to maintain competitive advantages and profitability, AirAsia should foster the relationships between customers (according to Hillman and Keim).
In the business world, company will never compete against company, but will compete network against network. For example, MAS (Malaysian Airline System) does not compete against AirAsia. Their respective networks compete. AirAsia and MAS, both are low fare airlines. In order to attract customers to travel, AirAsia always advertise their promotions through AirAsia’s webpage and newspapers with the most affordable price. With no doubts, poor network services will not have a good relationship in long run. Therefore, network has to work together with CRM to deliver great value of information to customers and solve customer’s problems, is a source of great competitive advantage.
Lastly, a simple notification given by AirAsia to customers can be an opportunity for a valued dialogue. The implementation of CRM is to create a valuable customer relationship and with the two basic functions that are marketing and the customer experience. Marketing is required to build promises with customers, manage the dialogue component of the customer relationship, and motivate customer purchase behaviour. The customer experience is to deliver on the promises, represent the service component of the customer relationship, and reinforce customer purchase behaviour. Time is precious, quick and prompt to respond to customer’s email or SMS (Short Message Service) is very important. Dissatisfaction of customers is also very important because it provide excellent feedbacks to improve the quality and value-added of AirAsia.Order Now