Flying into a tangled web

An article in the Australian Financial Review about Flight Centre, titled Flying into a tangled web (5 March 2005), caught my attention this weekend. Others, like the Australian, had already covered Flight Centre's disappointing results but the AFR made a link to the impact of the Internet and discount fares on their performance.

This story caught my eye because I remember reading this case study on Flight Centre's use of thin client computing that apparently cut their IT costs by 40%. At the time I thought this looked like a good strategic decision, but it appears that despite saving money related to the expansion of their physical stores they subsequently found themselves having to catch up in terms of their systems and online store front. In August last year they announced they had acquired some additional e-commerce capabilities and range of other internal IT projects, although from what has been reported more recently it doesn't look like this has all been smooth sailing for them.

While it looks like Flight Centre are big enough to ride through this in the long term, it serves as a good reminder that the results of a good IT strategy aren't always just about controlling costs or simply making organisations more efficient. I made a similar point in this short article I wrote last year for an e-zine, Empower customers with self-service, not automation (PDF, 77KB).