“Airports are cities in their own right,” says Nick Woods, CIO of Manchester Airports Group (MAG), which manages three of them: Manchester Airport, London Stanstead and East Midlands. “They’ve got shopping malls in their departure lounges. They’ve got manufacturing plants, when you look at the baggage halls. They’re securing the border.”
But if they are cities, airports are unusually focused on operational efficiency: moving as many passengers through as many flights, as safely and sustainably as possible. In 2019, MAG’s airports served 60 million passengers (more than the population of Tokyo, the world’s most populous city). Seventy airlines shipped those passengers to 270 destinations.
When Covid-19 grounded the airline industry in 2020, MAG spotted an opportunity to transform the digital systems that underpin its operations. Tech Monitor caught up with Woods to hear how an ongoing transformation of its core SAP applications, from siloed implementations to a single platform, is helping the group streamline its processes, make the most of its data, and gain a ‘helicopter view’ of productivity.
Digital transformation at MAG
Digital technology is inseparable from MAG’s ongoing pursuit of operational efficiency, explains Woods. “Almost everything’s got a digital play to it.”
There are four areas where Woods is focusing MAG’s digital transformation efforts. The first is “planning and optimising our airports in real time,” Woods explains. That’s a huge coordination effort, he says, both between the airport and other stakeholders, such as airlines, air traffic control, and ground handlers, and within the airport group itself – all of which depends on data.
The second is using AI to ensure aircraft can be turned around as quickly and safely as possible. “We’re looking at how we can use computer vision to spot defects on runways, or detect foreign objects [that] can damage an aircraft.”
Third is digitising machinery, such as baggage systems and lighting equipment, so energy use can be optimised and maintenance predicted. One aim of this ‘smart airport’ strategy is to allow MAG to generate its own electricity, Woods says.
Fourth is what Woods calls the ‘digital enterprise’. This is “all the good stuff that we need to run an efficient business: automating our back-office processes, using a lot more intelligence-led data around predicting what we need to do”.
It is this last impetus that led Woods to undergo a transformation of MAG’s enterprise applications estate. In the run-up to the pandemic, the group had invested heavily in upgrading its airport operations: “We had new terminals being built, we were working on guest experience programme, we were replacing the baggage system down at Stanstead,” Woods recalls.
“But what we found going into the pandemic was there was a real hunger for better access to data that was easy to compare across different airports,” he explains.
Modernising Manchester Airport Group’s SAP estate
MAG had grown through acquisition: it acquired East Midlands airport in 2011 and Stansted in 2013. And while it had largely standardised on SAP for its core enterprise applications, including SAP ERP Core Component (ECC) for finance, SAP SuccessFactors for HR, and SAP Ariba for procurement, they were disjointed. “What we hadn’t really done is think about how it works from an end-to-end process perspective,” Woods says.
The pandemic provided the perfect opportunity to remedy this. At first, the group was focused on survival but after a few months it turned its attention to transformation. “As we looked at how to reshape the business to be the best it can be, there was a need to drive standardisation across those different parts of the business,” he recalled. “How do we get better access to consistent data?”
Woods kicked off a transformation programme with the aim of having MAG’s SAP applications running industry best-practice processes, all from a single cloud platform.
In the past, organisations have tended to customise enterprise applications to their specific needs, says Woods, “and we’ve been somewhat guilty of that as well. [But] that’s built technical debt and complexity into systems, which slows you down.”
“We want to move to a world where we’re in line with industry best practices, and therefore we can take advantage of efficiencies and improvements as you go along,” Woods explains. “Whether that is intelligent automation or AI … you can get it out of the box rather than having to [customise] it to your own processes.”
Moving to a single platform, Woods adds, will also allow MAG to measure its productivity more effectively. Although its core applications are all SAP, “there’s quite a lot of stuff that has to happen outside of the system, non-measurable activities like manipulating data, pulling it out and doing something in spreadsheets and then putting it back in again”.
In the end-state of the current transformation, everything will be ‘on-system,’ Woods says. “So everything’s auditable, traceable and trackable, and we can measure productivity much more effectively.”
MAG is, of course, approaching this programme in stages. One early milestone was moving its ECC implementation from IBM‘s cloud platform into AWS.
“Getting [ECC] onto the right platform and [retiring the] legacy cloud platform that we didn’t need allows us to deliver a level of cost saving, some resilience and efficiency, but also provides us the platform on which to build.” The group hosts many of its data platforms in AWS, so moving its finance app onto Amazon’s platform conferred connectivity and performance advantages, Woods explains.
The migration took place two weeks before the end of MAG’s financial year, but preparation and testing gave the group the confidence to make the switch. “There was a huge amount of control and governance,” Woods explains, “with pre-migration testing and then post-migration testing, including our auditors coming in and giving it a good once over.”
Upgrading to S/4HANA
The next step is to redesign the company’s finance processes ready for an upgrade to S/4HANA, the latest iteration of SAP’s core ERP product. To do so, the companies announced today, MAG will be using RISE with SAP, the software vendor’s ‘business-transformation-as-a-service’ suite, which includes process intelligence tools as well as technical migration support services.
This order of proceeding – AWS migration, then process redesign, then S/4HANA upgrade – reduces the risk in the programme, Woods explains.
“There is a whole load of business transformation that we need to do – simplifying our finance processes, best practice business process automation – and that stuff takes time,” he says. “You don’t want to be doing complex technical and data migration at the same time as you’re in complex business change transformation as well.”
For any CIOs considering a similar journey, Woods’ advice is to get your data in order first. “Any technology person that’s done migrations in the past knows that that data is king,” he says. “There is absolutely value in investing the time upfront in making sure your data is in as good a state as possible, so that when you migrate it across, you’ve got a clean environment.”
“If there’s crap in there in the first place, there’s no point migrating that crap into the new system. Get it right first: that would be my biggest recommendation.”
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