Creating an efficient single operation, as David Marcontell, Executive Vice President & Principal at TeamSAI Inc. explains, is no mean task when MRO IT systems are merged.

Airline mergers are challenging – at the best of times. And these may not be the best of times. Air carriers, like all other business segments, are faced with the realities of a global financial recession, the broad effects of terrorism and rising fuel costs. Mergers are challenging for many reasons; different work cultures, processes and procedures conspire to slow and mire the best efforts of planning and execution. Chief among these challenges are the various IT systems resident in the merging companies.

Theresa Wise, Chief Information Officer for Delta, recently stated that the Delta/Northwest Airlines merger required the culling of 1199 computer systems down to 600.[1] MRO IT systems are among the most complex in any airline, but compounded in a merger. Multiple systems are responsible for inventory control, purchasing, maintenance records, planning and forecasting, production management for hangars, shops and line maintenance, human resource management and training. Compliance data and required reporting draws from this matrix of applications and platforms to satisfy the requirement for a ‘System of Record’ and the goal of a Single Operating Certificate. This is the landscape in which the MRO IT merger must be effected.

Laying out the roadmap:

The key to a successful MRO IT merger begins with a solid understanding and acceptance of, and buy-in to the strategic importance of the merger. At the highest levels of management there needs to be a clear commitment to communicating the shared vision to the organization as a whole. This is where the will to merge two different cultures – people, process and procedures – wins out in the battles of politics and over the ‘our way is the best!’ mindset. From the information that underpins this solid understanding, a roadmap can be created to guide those whose task it is to deliver the merger at this level. The roadmap then serves as arbiter when hard choices and trade-offs need to be made in the interest of improved compliance, value, and efficiency in the new maintenance organization and in support of the merger as a whole. Legacy systems that are familiar and ‘comfortable’ to employees of both merging partners will elicit strong emotional arguments in favor of one system over the other. In some cases, although these are rare, it may be more beneficial to select an entirely new system instead of attempting to migrate from one poor legacy system to another poor alternative. This one aspect alone suggests that rigorous thought and effort should go into integration planning and development of the roadmap. Key elements of a comprehensive roadmap should include:

Project Management Office (PMO)

A successful MRO IT merger will depend on the establishment of a dedicated Project Management Office (PMO) to lead and manage the effort. A properly selected project manager is essential – typically at the Director or even Vice President level – who has the right technical, organizational and even political skills, who understands the strategic vision and goals, and who has sufficient authority to lead. This understanding and ability is both upward and outward as well as downward facing within the organization. It is upward in that the project manager needs to be in tune with other parts of the organization and the way each fits into the strategic goals of the merger. Effective communication from the project manager up the organization is critical for setting corporate expectations and milestones as well as covenants and commitments with the regulatory agency. As the effort unfolds, the project manager will need to communicate effectively outward to the enterprise as an advocate for the MRO IT roadmap. This will include leveraging relationships with key leaders affected by the new processes and systems. Downwards, the effective project manager will not only be leading a team of dedicated subject matter experts and resources specialists, but will often also be responsible for internal and external developers necessary to support data migration and functionality equivalence efforts.

As with any complex project, the MRO IT merger roadmap will benefit from the use of project management tools incorporating well developed work breakdown structures (WBS). There are many robust tools available and they should have the capability to give visibility and insight into task dependencies, communicate critical path elements and have broad reporting capabilities. The project management tool is the control panel that guides the PMO team down the path set by the roadmap and ensures that nothing becomes invisible.

The use of cross functional teams, comprised, in balanced fashion, of personnel from each of the merged airlines, will provide an opportunity to involve and engage employees. Each employee brings a perspective that is essential to be heard and understood across functional lines. Teams comprised of subject matter experts, with knowledge of the current processes and applications, and having a positive and energetic outlook, will help to streamline the system selection process and support the bringing together of two cultures.

Finally, it is through the PMO that decision criteria and communication methods are established and originated. Having a common voice for the MRO IT merger will be essential to managing the invariably emotional aspects of the change process and keeping everyone working together to a common end. Communicating frequently and broadly with the enterprise on ‘why’ and ‘how’ decisions will broaden engagement among the workforce.

System selection process

Often erroneously considered one of the simpler elements of the MRO IT merger, the systems selection process must adequately and rationally weigh complex differences in systems compatibility, functionality, best practice, costs, and transition risk; each having both objective and subjective merits. Herein lies one of many hidden challenges to the successful MRO IT merger; the system selection process cannot simply choose which of the current systems should be retained without its first having a deep and comprehensive understanding of the systems and their unique characteristics and merits. At the beginning of the MRO IT merger process, no legacy system should be considered the ‘survivor’ without first establishing those attributes and selection criteria that best support the vision and goals of the merged maintenance and engineering organization. These attributes and criteria must be fully documented so that not only is there a consistent measure by which the system selection team can do its work, but also stakeholders outside the system selection process can understand why certain decisions have been made. Here balanced cross functional teams provide valued input, guidance and understanding of the current systems. It is also at this point in the execution of the roadmap that best practice assessments will help to better understand the current state of each legacy application; whether it is nearing a point of obsolescence or whether exceptionally high upgrade or integration costs will be incurred to allow the system to run on the merged company’s system architecture. Additional questions regarding integration, interoperability, and data migration challenges and risks are also answered during this phase.

During the best practice assessments identifying certain time or labor saving functionalities resident in one system or the other, but not both, often emerges as an important benefit of the process.  As an example, one recent merger of two US airlines identified critical hot-key scripts and background resident programs in a non-surviving legacy system that were key to the lower maintenance control unit staffing levels at one of the merging partners.  These best practice driving functional enhancements must be captured and transitioned to the surviving systems.

In very rare cases, following a rigorous assessment of the current systems, it may become apparent that the best interests of the merged airline cannot be adequately served by either of the airline systems in place. While presenting a unique opportunity for the newly merged company to springboard into new technologies or functionality, this situation also introduces significant challenges and risks of its own including extended timelines for achieving the synergies of a single MRO IT system and the potential for significant parallel transaction period (i.e. dual data entry and maintaining both old and new systems concurrently), all the while retaining the data migration challenges and risks to be discussed later. This decision should not be made lightly or quickly.

System Integration

Following a rigorous system selection process, it is inevitable that some development will be required to bridge from existing systems to the single surviving system(s). For example, data migration, conversion of part numbers, tracking of installed and spare inventory, material ordering processes, operations and maintenance control functions, system access, and compliance record keeping are several areas that often require supplemental software development to facilitate the differences in timing of the combined airline’s new operating schedule versus the execution of the MRO IT merger. Almost universally, the marketing and revenue benefits of the merger compel the maintenance organization to begin servicing the merged airlines’ aircraft long before the underlying control and support systems have been fully integrated or transitioned. Thus, additional software development will be required to facilitate the use of multiple systems in a single operating certificate environment until the MRO IT merger can be completed. To account for this, the roadmap will need to allow for supplemental software development, adequate testing, and data validation before final integration and data migration can take place.

Training

An often overlooked challenge in the MRO IT merger is one of proper training in the surviving systems and processes. As discussed above, the successful MRO IT merger is difficult not only because it involves rationalizing and selecting IT systems, but also because two distinctly different employee and corporate cultures are being combined. Employees, at every level, accustomed to working within a familiar framework quickly become unsettled and possibly irrational during a merger, even when no negative employment impact is anticipated. Fundamentally, hidden behind much of this anxiety is a training challenge. The impact of the merger – manifested for many employees through their daily transactions and interactions with the MRO IT system – comes front and center when the very tools they use are being changed.

During a merger, just like other affected groups, maintenance organization personnel simply want to know what is happening and why. So, the first element of training needs to be focused on the merger and its strategic value and importance to the survival of the airline. The buy-in comes most quickly when the employees as a whole are well informed by energetic and clearly articulated leadership that can answer questions in an honest and straight forward manner.

As system selection and modification decisions are finalized, specific course content will need to be developed to train employees in new system logic and procedures. Any interim procedures and processes needed to facilitate the transition to the steady state environment will also have to be covered. Depending on the size and complexity of the organization, training may need to be rolled out to multiple locations and during atypical work hours. Whenever possible, training should be accomplished by trainers that are intimately familiar with the applications, and underlying use and purpose of the systems. Engagement of traditional IT training companies without deeper understanding of the underlying systems and focused primarily on key-stroke transactions should be particularly discouraged.

It is essential to remember that success or failure for the MRO IT merger can hinge on one of the combined airline’s most controllable variables – the informing and training of its employees.

Challenges beyond the roadmap

While a well-developed roadmap built around the combined airline’s vision and goals along with an inspired and disciplined PMO will go a long way to realizing success for the MRO IT merger, data migration and harmonization often prove to be the most significant challenge for any IT mergers. Many sound and robust MRO IT merger roadmaps have failed to deliver on expected benefits because the PMO failed to adequately manage the challenges of data migration and harmonization.

Data Migration

On the surface, data migration sounds simple; just move it from here to there. The reality, however, is far more complex. As noted by Thanos Kaponeridis, founder and CEO of Aerosoft Systems, “One more critical factor emerging from MRO implementations is the process of initial data load. All Best of Breed MRO system vendors will attest to this. The initial data load/clean up and verification is the costliest and riskiest part of any project.”[2] The scope of the data migration impacts several critical areas of MRO to include ‘Perfect Assembly’ or configuration definitions, material inventory, technical manual content, engineering data, maintenance program schedules and work cards, fleet reliability data, planning and forecasting data, and aircraft technical records. Further, as the MRO lifecycle becomes more integrated and data-centric with the increasing capabilities of new aircraft and ground based systems, the need for universally accepted data standards has become ever more evident and critical. Yet, for many MRO IT mergers, the landscape is one of legacy systems with fundamental designs and architectures dating back even to the 1970’s and 1980’s. Thus the debates raging over adoption and enforcement of SPEC2000, iSPEC2200, and SD1000 become somewhat meaningless when few of the legacy systems being merged or transitioned are compliant in the first place. As a result, considerable effort will need to be planned and expended to ensure the migrated data is complete and in the correct format for the surviving system(s).

The migration process will also likely require custom developed and tested data migration tools, data preparation, and data validation before and after migration. This last characteristic cannot be overemphasized. Several recent MRO IT merger efforts between US airlines have gone over budget and schedule due to late arising data validity questions. Thus, it is essential to define processes for handling obsolete or bad data and to establish a data migration plan that considers the timing and potential requirement for concurrently run transactions until the retiring system is no longer needed.

Data Harmonization

While data migration addresses moving information from one system to another, data harmonization is the assessment of data that looks different, whether by name, format, source, or repository, but is really the same or equivalent. Applicable to material, technical manuals, maintenance programs, and work documents, data harmonization is where significant merger synergies and cost savings can be found; often in the tens and even hundreds of millions of dollars annually. Here again, the utopian objectives of SPEC2000, iSPEC2200, and SD1000 become immaterial if the legacy systems are non-compliant to the standards. A recent executive roundtable of airline maintenance and MRO IT industry thought leaders hosted by IBM affirmed the need for data standardization, but for various reasons, it was pointed out, that the “industry commitment and motivation continues to be a vexing challenge.” Furthermore, it was stated that, “Safety and reliability data should be the first to be harmonized. Before doing so, a collaborative business case with a defined return on investment must be defined and exactly which data are willing to be shared must be determined.”[3]

Thus in the MRO IT merger, data harmonization, like migration, becomes a customized and often very labor intensive project, occasionally even requiring hundreds of man-years of effort. Development of enabling tools to quickly digest differences and compatibility will be essential, along with the necessary engineering and technical resources to research and approve common programs, procedures, documents, and material equivalents; all under the close scrutiny of regulatory agencies due to the inherent airworthiness sensitivity.

One question that is often hotly debated is whether data should be harmonized before or after migrating to the surviving systems. A systems ‘purist’ might suggest that there is little value in migrating obsolete or redundant data, but this argument falls victim to the reality of integration timelines and schedules. As the harmonization effort is by far a more time consuming and labor intensive task than migration, the immediate requirements of a Single Operating Certificate often dictate that migration must take place before harmonization.

Summary

As we said at the outset, airline mergers are challenging – even in the best of times! A successful MRO IT merger starts with a strategic vision and goals that are well understood and shared at all levels of the organization, and disseminated through an effective and well led PMO office.

Out of the PMO, the MRO IT merger roadmap defines the ‘why’, ‘how’, ‘when’ and ‘who’ of the effort and will be critical to managing the significant internal and external resources that will be required to execute the merger. It will be essential to avoid the temptations of creating the perfect system and to remain focused on the clearly defined objective and guidelines laid out in the roadmap.

The systems selection process should be founded on consistently applied objective and subjective evaluations that consider both direct and indirect costs as well as best practices, often resulting from key system functionality. Following the selection process, system integration success will rely on effective management of software developers building tools that bridge key functionality differences and allow information to be shared among not-yet-merged systems.

While highly valued with often lofty merger synergy and cost savings targets, data migration and harmonization represent the most significant challenges and risk for the MRO IT merger, and are almost universally underestimated in terms of the effort required to realize the eventual benefits. Data requirements must be carefully incorporated into the larger project plan and well executed to complete the merger and realize its full potential.

IT and data migration/harmonization issues aside, the human side of the transition is ultimately the most important in any merger effort. Guiding the organization through the remolding of cultures in a merger remains the single most significant contribution that the maintenance and MRO IT leadership team can offer to the combined company.