Aviation Wikinomics


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Aviation Wikinomics

  1. 1. Aviation Wikinomics Innovation through Mass Collaboration Blue Water Solutions, Inc Is your business strategy, operations and technology architected to execute in a world of mass collaboration?
  2. 2. Bottom Line: Wikinomics is a global effect which, which is altering the most fundamental theories and assumptions of classical economics and is a defining factor in the success or failure of corporations in every industry. Complex systems teach us that resilience is more important than stability; agility is more important than strength and speed is more important than size. It has become imperative for leaders to understand the mechanisms of Wikinomics, its applicability to their industry and their company’s capability to openly, synchronously and collaborate globally. Innovations: On August 25, 1991, a 21 year old Finnish college student of Swedish heritage, wrote a kernel for the Intel x86 processor. He posted the code and a note on a newsgroup website, “I'm doing a (free) operating system (just a hobby, won't be big and professional like gnu)” and a request for feedback on, “what features most people would want”. A decade later, the Linux operating system that Linus Torvalds “gave away” is the dominant open source solution and the cornerstone of multiple new and established companies who learned how to make money with free products. Rod McEwen was a fund manager who emerged as the CEO of Goldcorp, Inc., following a debt restructuring of a failed gold mine. In-house geologist believed 6M ounces of gold existed somewhere on the 55K acre property, yet years of seismic Innovations testing and drilling had yielded low results. Mr. McEwen attended a MIT conference for young CEOs, although 47 years old at the time. One presentation recounted the story of Linus Torvalds sharing his intellectual property across the globe to a network of his peers who in tern became a virtual army, intent on collaboratively developing an open alternative to “for profit / proprietary” OS. Mr. McEwen intuitively recognized the essence of open sourcing and the mechanism of peering and took his epiphany back to Ontario. If the in-house geologists couldn’t find the gold, then maybe some- one else could. As opposed to hiring and firing employees for the next five years or placing additional capital at risk by hiring additional consultants, maybe the answer “Innovation Networks was to open source the analysis by sharing Goldcorp’s geological data with the consist of four groups: world. His idea was received coolly by his employees who doubted that others could Inventors, accomplish what they had failed to do and his management team was concerned that Transformers, he was breaking a fundamental principle of the mining business - never share IP. In Financers and March, 2000, the “Goldcorp Challenge” was launched with $575K in prize money for Brokers. anyone who developed alternative approaches to locate gold deposits and identify Successful firms use drill sites. The response was overwhelming and included mathematicians, lawyers, multiple collaboration doctors, engineers, computer programmers, graphic artists, musicians, chemists and scenarios to seamlessly a few geologists. Within three years, 8M ounces of gold had been discovered and Mr. source internal and external resources in order McEwen’s struggling $100M company was transformed into a $9B industry leader. to optimize stakeholder value.” On June 15, 2007, Apple blogs around the world were all buzzing as the long awaited iPhone was set to be launched. AT&T had signed an exclusive distribution and Navi Radjou marketing deal with Apple and subscription services were expected to skyrocket. Vice President, Forrester 2
  3. 3. 3 On August 24, 2007, George Holtz, a 17 year old high school graduate headed to the “There is a fundamental change taking place in Rochester Institute of Technology, was being interviewed on CNBC for reengineering terms of how corporations his iPhone to work with any cell phone service by simply switching the SIM chip. create value Young Mr. Holtz, posted the instructions on his personal blog, the same blog that he and arguably used as a wiki to get help from his peers: fellow hackers. His initial motivation was the core architecture simply to just make the cool phone work with T-Mobile’s family plan service that his of the corporation. parents used, but over time, it became a challenge that he felt obsessed to conquer. It's the biggest change in a century in the ways that Three months, the desire of one consumer and his social network’s ability to companies build collaboratively customize a product and service - derailed two years of planning, relationships and interact negotiating, contracting and marketing by global giants AT&T and Apple. with other entities in the Welcome to the world of Wikinomics. economy and in society and arguably, The airline industry is facing challenges today that the combination of the dot.com the very nature of the bust, the post 9/11 recession and SARS did not bring. Fuel costs at $120/bbl, open corporation itself.” skies, excess capacity, low yield, mergers, outsourcing, regulatory compliance, … Don Tapscott are but a few of the issues forcing CXOs to rethink their business models, strategies, cost structures and investments. Capability rationalization has been ongoing for over a decade, yet most airlines continue to duplicate processes in areas that add no value for consumers. As capabilities are sourced to the “best value” providers, Applications synchronizing operations “outside the four walls” has become the differentiator of competitive advantage. The cost structure problem is less a function of labor rates as it is an issue of labor productivity and duplication of processes across the ecosystem. Advances in aircraft and maintenance management technologies are resulting in value innovations, significant savings and new revenue streams. For instance, the days of managing fleets homogeneously or even at the tail level have given way to component centric configuration management where AD compliance is continuous and overflys are impossible. CAMP and ATOS SAI inspection check lists can now be integrated into rules based human centric Business Process Management technology and services oriented middleware tools which alert managers when the continuous surveillance system detects change. Autonomic Sustainment combines diagnostics, prognostics and aircraft health management with lean supply networks and readiness based sparing that result in higher availability and reliability at lower lifecycle costs. Software-as-a-Service (SaaS), originated in the airline industry in the 1970’s, has passed the tipping point of main stream adoption and virtualization is driving the cost of mass collaboration down significantly. Aeroxchange, Exostar, Boeing’s Goldcare George Holtz from CNBC Interview Global Ops Center, Airbus’ MRO Network and Lockheed’s Autonomic Logistics Information System (ALIS) are but a few examples of how mass collaboration creates value innovations via the network effect that benefits the entire aviation industry. The question is: are your company’s business networks, people, processes and technologies increasing aircraft availability, reliability and customer satisfaction while decreasing labor and materiel costs thus creating stakeholder & shareholder value?
  4. 4. Blue Water Solutions, Inc. (BWSI) is a professional services firm focused exclusively on aviation industries: airlines, defense, business jet & air taxi services, 3rd party maintenance providers, aerospace OEMs, technology and private equity firms. BWSI is led by Malcolm “Mac” B. Armstrong. Mac’s illustrious forty five year aviation career includes Senior Vice President, Operations & Safety, at the Air Transport Association where he represented airline interest before the U.S. Congress, Federal Aviation Administration and Department of Transportation; Executive Vice President, Operations, at Delta Air Lines, where he oversaw the regulatory compliance, flight control, logistics and maintenance of 600 aircraft executing 2000 dispatches per day by a staff of 30,000; and 31 years in the U.S. Air Force, retiring as a Lieutenant General and Commander, 21st Air Force, whose mission of air cargo and tanker services covered half of the globe with a staff of 54,000 for a fleet of 530 aircraft. BWSI believes that a collaborative partnering approach to addressing client’s needs and desires yields quality solutions, faster and cheaper than the “one size fits all” approach of most large generalist consultancies. BWSI leverages peer collaboration by sourcing deep Subject Matter Experts from a combination of internal professionals Blue as well as external SMEs from our extensive partner network of niche consultancies Water as well as large generalist firms in order to custom fit a team that exactly meets our client’s specific culture, situation, context and timing. Solutions BWSI performs detailed analytics using comprehensive process models and custom tools to recognize, decompose, define, measure, analyze and innovate business issues and opportunities, prior to recommending solution options. Implementation, training, control, standardization and synchronization of solutions can be governed by BWSI, or these elements of maturing a capability or transforming a business can be “Commodities only exist transitioned to our client’s current vendors or one of our partners with the volume of in the minds of the inept! resources required to build and sustain a solution. This encapsulation and abstraction of roles and responsibility enables BWSI full independence of product / service bias Studies of companies that and financial motivations in architecting and delivering solutions. We believe this were successful over multiple business cycles open approach allows us to focus exclusively on “helping our clients succeed!” identified “bonding”, not rivalry, BWSIs’ mission statement is to: as the key concept of Provide our commercial and military aviation clients with business strategy. value added, innovative yet practical solutions, Bonding theory focuses on to difficult and complex challenges, attraction, that is, attracting, satisfying and focused on short term needs and long range strategic ambitions, retaining stakeholders.” in a collaborative, peering and mutually beneficial manner, Arnoldo Hax openly and independent of product or service bias, Professor Emeritus, and at the highest levels of integrity and shared trust. MIT Sloan 4
  5. 5. 5 Michael Wm. Denis is a Principal of BWSI and Chief Technology Officer. In this “We have to be able to look back at this time and capacity, he leads business strategy, enterprise architecture, capability maturity, say we solved the organizational design and technology engagements for our clients and partners. business-model problem. Mr. Denis has over twenty years managing the operations of defense maintenance The continual up and down of concessions and organizations and advising global tier one airlines, regional airlines, aerospace restructuring manufacturers and independent third party MRO companies. His work experience has to change.” encompasses corporate strategy, technology architecture, balanced value metrics, business simulation & modeling; Service Lifecycle Management (SLM) of complex Richard H. Anderson assets; LEAN / Six Sigma continuous process improvement methodologies; ATOS & CEO, Delta Air Lines CASS regulatory compliance programs; Reliability Centered Maintenance / Condition Based Maintenance / MSG-3 maintenance programs; Integrated Capability Maturity Models (CMM-I); and advanced technology insertions such as remote condition monitoring, aircraft health management, multi-echelon readiness based sparing, S1000D electronic content schemes, ISO 10303 standards for the exchange of product model data / AP 239 product life cycle support and MIMOSA / ISO 13374 diagnostics, prognostics and multi-dimensional configuration management. Michael His current defense focus is the development of a Joint Autonomic Sustainment System (JASS) designed to meet the Joint Capability Area - Joint Force Sustainment Wm. requirements of the Net Centric Operations strategy, Sense & Respond Logistics Denis tactics via the Global Information Grid in order to improve both in theater JFCOM / COCOM tactical decision support as well as PEO/PM lifecycle management decision support capabilities that facilitate higher levels of asset availability and mission readi- ness at lower operational risk and total lifecycle sustainment costs. His current commercial aviation focus is optimizing investments in Services Oriented Architectures, leveraging On-Demand / Software-as-a-Service (SaaS) capabilities and SaaS Integration Platform (SIP) vended solutions in order to realize increased business networked collaboration ecostructures that improve process and technology agility at significantly reduced capital investments, speed to value and risk to value. Mr. Denis began his technology consulting career at Accenture, departing after six years as the Director, Aviation Maintenance Solutions. Prior to Accenture, he served twelve years in the US Navy as a Surface Warfare Officer and Gas Turbine Engineer. Mr. Denis attended the Georgia Institute of Technology earning a Bachelor of Nuclear Engineering. He also holds a Master of Decision Science from the J. Mack Robinson College of Business at Georgia State University. He is a member of the Institute for Richard H. Anderson, CEO Delta the Management Sciences and Operations Research (INFORMS) and the American Society of Quality (ASQ) as well as ASQ’s Six Sigma Forum. A native of Houston, Texas, Mr. Denis currently resides in Atlanta, Georgia, with his wife, Jackie, and their son, Kyle, while daughters Ashley and Courtney attend the University of Georgia and Clemson University, respectively.
  6. 6. Blue Water Solutions, Inc 2235 Bent Creek Manor Alpharetta, GA 30005 O: 678.524.8289 F: 770.777.4759 E-mail: info@avioxi.com www.avioxi.com Accelerating the future of Aviation Business Services