Virgin Blue grounds Oracle outsourcing

Virgin Blue has grounded plans to outsource the maintenance of its Oracle e-business systems, chief information officer David Harvey said late yesterday.

After indicating last year it would outsource the management of its Oracle e-business systems, infrastructure and IT help desk, Harvey yesterday told ZDNet.com.au that the Oracle component had been "put on the back burner".

The decision not to outsource that component was a response to new labour market conditions; a year ago it was difficult to retain and recruit Oracle e-Business experts in Brisbane, however that has since changed, said Harvey.

"As it turned out, the employment market has subsequently tightened and we have been fortunate to retain and indeed build on our in-house expertise, which reduced the immediate driver to seek a long-term managed services partner," he said.

News of the decision might have come as a disappointment for Western Australian-based IT services outfit ASG, which early last year trumpeted its nomination as Virgin Blue's preferred partner for Oracle services.

Virgin Blue has, however, forged ahead with its broader outsourcing strategy, following in the footsteps of its competitor Qantas, which outsourced maintenance of key systems to Satyam, Tata Consultancy Services and ASG in 2006.

Global telco Verizon Business inked a three-year deal with Virgin Blue at the end of last year covering the airline's server infrastructure.

"Last week we transitioned a number of servers hosting production systems for our new V Australia airline into Verizon's remote management control," said Harvey. "Over the next month a number of production servers running enterprise systems for the Virgin Blue group will be transitioned to Verizon."

Should the airline decide later to outsource its Oracle systems, Harvey pointed out that Verizon did have capabilities in application management also.

Virgin had also recently struck a deal with Brisbane-based IT services outfit Corpnet, which will see the two share "first level" around-the-clock IT support to all business units, according to Harvey. "This shared partnership is in its early days, but the intention is for VB to increasingly leverage Corpnet's growing scale in the IT help-desk area," he said.

Virgin Blue is also gearing up for a major business transformation project, known internally as Next Gen. A key component of the project will be the replacement of its reservation system. Contracts are expected to be signed in the coming weeks with software vendor Navitair for its New Skies reservation system.

The broader transformation project will be headed up by former general manager of Virgin Blue's ground operations, Andrew Lillyman.

The new reservation system will be different to that selected for the company's recently launched trans-Pacific V Australia service, which inherited the Amadeus system that is used for its short-haul Pacific Blue service.

Harvey said Virgin Blue's recent decision to axe 400 jobs would be unlikely to affect the technology team, which today consisted of around 160 staff — 130 permanent and 30 contractors — down 40 on last year.

"With V Australia going live, and completing that work, we've reduced the number of contractors we have," he said.

"We have been deliberately not been replacing staff over a number of months. In parallel we are cranking up a huge new reservations project and a lot of staff will be working on that for the next 12 months."

Author: Liam Tung @ ZDNet.com.au

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