Pearson Airport Announces Massive Outsourcing Deal

Toronto's Pearson airport has announced a $130 million deal under which it will outsource all its IT operations to IBM. This includes all the systems that the airlines use to service customers. Under the arrangement, IBM will bill the airlines directly as distinct from the current arrangement under which the airport bills the airlines through landing fees.

"The driver behind the partnership for GTAA," said an airport spokesperson, "stems from the organizations overall strategy to identify the business value of technology in various areas including data risk management and strategic outsourcing." An interesting question for discussion is " How does the outsourcing deal help to identify the business value of technology?" 

The answer centers around the fact that the value based strategy seeks to identify and rationalize IT usage on a business value basis, as billings will be based on business metrics. The arrangement will provide an incentive to the airlines to uitilize IT where it makes the most sense from a business viewpoint, such as the use of kiosks rather than staffed checkpoints.

One open question that arises, however, is whether the provision for flexibility in IT configuration between airlines is consistent with a need to achieve the degree of standardization that can ensure a secure system. No doubt IBM has worked through that issue.

For a write-up on this case, please click this link.