Information Technology Outsourcing in Airlines Essay

Information Technology Outsourcing in Airlines - Essay Example The changing IT environment at overseas branches and operations of firms has such a big impact on the IT related decision making process. Airlines have increasingly been attracted to IT outsourcing companies mostly based in India. Airlines can be regarded as institutions that strive to provide their customers with safety and service quality by making use of certain kinds of IT in their activities. While big airlines have been making use of IT as the main investment related strategic policy alternative, smaller airlines like budget airlines too have been making use of it in order to achieve positive synergies in IT. However while the former have been able to increase their net investment expenditure on IT on a larger scale, the latter have only been able to increase IT related investment on a smaller scale. As a result a clear dichotomy between the two entities can be noticed. Larger airlines have adopted growth oriented information and communication technology (ICT) policy measures primarily with the intention of enhancing growth drivers such as merger and acquisition (M&A) related synergies while smaller organizations have basically relied on capturing niche market segments. IT outsourcing theories are many in number though very few of them successfully capture the essence of the growth pattern of this industry. The impact of IT outsourcing on global airlines has attracted the attention of many researchers and analysts. Particularly in modern industry situations such strategies have become more relevant against the backdrop of rapid competitive and changing environment. The available literature on the impact of IT outsourcing on airlines' corporate strategies suggests different analytical and conceptual frameworks based on modern IT investment programs that are already being put into practice at some big airlines across the world. As the available literature on the subject suggests there is a substantial amount of empirical evidence to support the ICT related operations and their positive impact on growth drivers such as revenues, profits, market share, share price and integration across a number of market segments without truncation at airlines (Glaser, 2002). Independent analysts have identified three forces that determine the ultimate growth prospects of companies. (a). Differences in the local business environmentThe application of processes and procedures in identifying differences in the local business environment is connected with the overall global business strategy of the firm. ICT is a single aspect of this global strategy. If the firm were unable to identify and isolate the important elements in the global operational environment, there would be much less of an opportunity for the