Creating the Brain and Nervous System for Delta Airlines By Angela Klein, Assistant Professor ICS Park University April, 2004 On any given day, Delta services “2,100 flights, carries about 300,000 passengers, uses 7.3 million gallons of fuel, serves 87,000 cans of soda, and, to keep the soda cold, boards 219,000 pounds of ice.” (Gage, McCormick) With this volume of activity occurring in airports across the country, there is bound to be inefficiencies. Thus, in late 1997, Delta Technology was formed as a subsidiary of Delta Airlines to address technology concerns. Its mission was to use technology to improve customer service, eliminate inefficiencies, decrease costs, and, ultimately create the best travel experience for their passengers. Delta technology initiated their first system development project; a project that would forever change air travel for Delta. Before its end, this project would involve replacing all the hardware and software in all airports worldwide including gate podiums, phones, printers, networks, servers, applications, databases, and many peripherals; and, with no disruption in service. As a result of technology, Delta Airlines trimmed their operating expenses $700 million and generated $150 million in new revenue 2002. These successes are attributed to the Delta’s Nervous System; a five year project to build a communication infrastructure that would link more than 100,00 pieces of equipment, over 30 databases, and more than 300 physical locations. The cost of the project was $1.5 billion. Background Delta Technology inherited a legacy of many disparate systems that had been slowly developed over time including third-party and custom-developed software. There were “about 17 different technology architectures and 30 different platform environments” (Mc Cooey) each managed separately at different locations. Sometimes, there were even multiple versions of the same software used in different locations of the company. Basically, each location was independently managing their destiny. In addition to the state of technology within Delta, the U.S. Department of Transportation had imposed regulations requiring all airlines to computerize reservations systems and use the system to effectively manage pricing of seats. This was based on the success of Sabre, American Airline’s reservation system. Sabre, the first system in the industry to give the ability mine buying patterns and determined optimal pricing. The system led to the first frequent flyer program and cheap nonrefundable tickets. For American, this system was considered the “first strategic system – an information system that altered the business strategy of the company.” (Gage, McCormick) If the government’s pressure to adhere to standards wasn’t enough, at the turn of the century, a proliferation of web travel services posed challenges for Delta. Delta estimated that by investing and promoting online purchasing through the web, the company could.

1. Creating the Brain and Nervous System for Delta Airlines
By Angela Klein, Assistant Professor ICS Park University
April, 2004
On any given day, Delta services “2,100 flights, carries about
300,000 passengers, uses 7.3 million gallons of fuel, serves
87,000 cans of soda, and, to keep the soda cold, boards 219,000
pounds of ice.” (Gage, McCormick) With this volume of
activity occurring in airports across the country, there is bound
to be inefficiencies. Thus, in late 1997, Delta Technology was
formed as a subsidiary of Delta Airlines to address technology
concerns. Its mission was to use technology to improve
customer service, eliminate inefficiencies, decrease costs, and,
ultimately create the best travel experience for their passengers.
Delta technology initiated their first system development
project; a project that would forever change air travel for Delta.
Before its end, this project would involve replacing all the
hardware and software in all airports worldwide including gate
podiums, phones, printers, networks, servers, applications,
databases, and many peripherals; and, with no disruption in
service.
As a result of technology, Delta Airlines trimmed their
operating expenses $700 million and generated $150 million in
new revenue 2002. These successes are attributed to the Delta’s
Nervous System; a five year project to build a communication
infrastructure that would link more than 100,00 pieces of
equipment, over 30 databases, and more than 300 physical
locations. The cost of the project was $1.5 billion.
Background
Delta Technology inherited a legacy of many disparate systems
that had been slowly developed over time including third-party
and custom-developed software. There were “about 17 different

2. technology architectures and 30 different platform
environments” (Mc Cooey) each managed separately at
different locations. Sometimes, there were even multiple
versions of the same software used in different locations of the
company. Basically, each location was independently managing
their destiny.
In addition to the state of technology within Delta, the U.S.
Department of Transportation had imposed regulations requiring
all airlines to computerize reservations systems and use the
system to effectively manage pricing of seats. This was based
on the success of Sabre, American Airline’s reservation system.
Sabre, the first system in the industry to give the ability mine
buying patterns and determined optimal pricing. The system led
to the first frequent flyer program and cheap nonrefundable
tickets. For American, this system was considered the “first
strategic system – an information system that altered the
business strategy of the company.” (Gage, McCormick)
If the government’s pressure to adhere to standards wasn’t
enough, at the turn of the century, a proliferation of web travel
services posed challenges for Delta. Delta estimated that by
investing and promoting online purchasing through the web, the
company could save more than $14 a ticket in distribution costs.
With many airlines selling 10 to 20% of tickets through this
medium, this could amount to more than $75 million annually.
However, reservation and pricing data would need to be
available and accurate through multiple channels, including the
company’s website.
With the basic infrastructure in place, the next area to improve
was Gate and Boarding. Delta Technology set out to stream line
the boarding process, eliminate long lines, and effectively
manage the inevitable delays of travel (such as weather).
Focused on the common goal of the project, the objective of this

3. phase was to keep the customer service the priority.
Building the Nervous System
To meet the challenges of creating Delta’s Nervous System, the
first part of the development effort was standardization. “Delta
technology replaced a mix of brands with Hewlett-Packard (HP)
workstations and servers. It also standardized its desktop
software, using Microsoft Office and Microsoft Exchange e-
mail. “ (McCooey) To manage globally the installation of all
software and hardware resources, Tivioli Enterprise Systems
was deployed over a three year period. The enterprise systems
management (ESM) would enable integration and management
of all systems from one location. Previously, each airport
functions as a separate business unit, making decisions and
purchases of office systems on their own. “Today, 44
applications suites for major business processes (such as
reservations, baggage, crew, cargo, gates and ticketing) are
being identified, customized and deployed by Delta Technology
consistently to all airport and shuttle locations.” (McCooey)
Gate readers were installed to read the bar code on the boarding
pass automatically at boarding. These readers fed into the
software that provided flight summaries, passenger information,
seating availability, standby lists and more. Through a
graphical user interface, Delta Agents could easily navigate
through the application to service the flight and passenger.
Kiosks were added for easy checking in. A passenger using the
kiosks could save an average of 20 minutes from arrival at the
airport to boarding gate.
The Delta Nervous System along with many procedural changes
at boarding reduced staff at the gate by two to four agents.
Turn around time was kept under 30 minutes keeping planes in
the air an average of 13.2 hours a day instead of 10.7. In
addition, the connectivity of the systems and locations reduced
the occurrences of lost luggage. Delta’s cost to get a lost bag

4. back to its owner is $150 per bag. In one year, reduction in the
cost of mishandled baggage resulted in $8.7 million savings,
thanks to the Nervous System.
Can Delta survive? Kevin Strange, a Garner Inc. Vice President
and data warehouse expert believes they can. Armed with
Teradata data warehouse platform and analytical tools from Brio
and SAS Institute, Delta Technology stores “almost every
transaction” (Gage, McCormick) they have. Most airlines
achieve about 20% of their transactions. With this information,
Delta makes the company’s most-valued customers feel special.
At the gate, agents can review a passenger’s flight history and
see the passenger’s “score” of value to the company. With this
information, the agent can give the attention to the customer’s
needs. For example, frequent flier customers receive preference
on connecting flights.
Delta can also mine the data to save money, by identifying
trends in the company’s performance as well as target markets
for advertising. Delta cut costs and increased revenue utilizing
its data warehouse. The airline “matched broken parts to
warranties, saving $10 million, eliminated wasteful fuel
practices saving an estimated 8.4 million,” and was able to
“better audit ticket sales and transfers to other airlines, saving
$27 million.” Delta attributes $100 million in savings last year
from the successful use of the data warehouse. Implementing
the data warehouse, populated with over 10 trillion bytes of
information, took 18 months and approximately $35 million to
complete.
Delivering the Nervous System
Getting the Delta Nervous System up and running required a
phased approach. The first phase in early 2000 “targeted
Delta’s 20 busiest airports in the United States.” The second
phase, in the summer of 2000, completed 28 US cities. The
remainder of global locations was handled in the last phase. By

5. end of 2001, 81 airports were fully implemented. Keeping in
mind the goal to provide no disruption of service, gradual roll-
out enabled Delta Technology to monitor the progress and meet
the needs of each physical location. Additionally, ESM saved
60,000 work hours in the installation of software to each PC
during the first phase alone. Delta Technology staff was able to
do in a few days what took previously a couple of weeks. The
phased roll-out and automated software distribution not only
saved time and money, but “reduced human error and improved
consistency” (Mc Cooey) which gives more stability to the
environment.
Delta’s survival did require the organization to harness
technology not only to achieve what their competitors did, but
surpass their competitors’ achievements. Cutting costs was
paramount, but winning customer loyalty will propel the
company forward. Did Delta meet the goals of their project?
Will that be enough going into 2003, given our country’s
economy and focus on homeland security?
Case Questions
1. What was the problems and/or opportunities facing Delta in
late 1997?
What is the difference between a problem and an opportunity?
2. Who were the stakeholders in this new system?
3. Given the traditional options in software development (i.e.
Buy, Build, Re-Engineer, Enhance, or leave alone), what did
Delta choose? In your opinion was the decision a correct one?
4. What were the requirements for the new system?
5. Did the new system meet the needs of the user and satisfy the
objectives of the business? Explain your views completely.
6. How did Delta know that the Nervous System was a success?
Give measurements of success (Critical Success Factors) of the
new system.
7. As a project manager, what would by your biggest concern

6. during implementation?
Bibliography
Mc Cooey, Eileen. (2000, June). “Delta Upgrades to First
Class” Beyond Computing, 46-47.
Gage, Debbie and McCormick, John. (2003, April 1) “Delta's
Last Stand.” . Retrieved March 25, 2004.
Website:
http://www.baselinemag.com/print_article/0,1406,a=39941,00.a
sp
Overby , Stephanie. (2003, February 15). “The Incredible
Lateness of Delta.” CIO Magazine..
Website:
http://www.cio.com/archive/021503/infrastructure.html
Meehan, Michael. (July 31, 2003). “Delta Scraps Legacies
With Huge Upgrade” Retrieved March 23, 2004
Website:
.http://www.computerworld.com/printthis/2000/0,4814,47646,00
.html