Conflict

Cathay Pacific Airways is one of the prominent Hong Kong airlines’. Over the past decade they often found ways to over come the unpredictable market. Their main goal was to cut cost, they felt that would the best way for them to make there present felt in the market. Anthony Yeung acting general manager of information technology sort out to complete this challenge. Yeung started at Pacific in 1970 right after he graduated. He wrote the first reservations system for Cathay. After a fire at one of Cathay three Data Center, critical functions such as passenger reservations, departure control, engineering, flights and crew operations was interrupted for over 12 hours. During this time Cathay acknowledged how important IT was to there company. They decided to move all dedicated support to central data center. The place that best fit this move was Australia. Australia land was cheaper and not located in a crowded industrial area. Australia also waived the 20% percent import tax on Cathay mainframes. They also gave free resident visas to all Cathay IM staff relocating to Australia. Australia seems to realized the benefit of having Cathay IM staff station in there country. In the past five year of service at Cathay Pacific Yeung outsourced 65% of his operating budget. Outsourcing became a key technique for reducing company cost. The main concern behind outsourcing was to outsource the nonstrategic functions. Cathy retained to many functions in house that could have been easily outsourced. Cathay decided to cut cost further by outsourcing nonstrategic functions such as Building Maintenance, Lift Maintenance, Renovation, Printing, Transportation, and Medical Service. This now left the employs more room to focus on core aviation competencies. I would call the Cathay the outsourcing guru they continued to outsource as much as possible. They begun a smartsourcing, this from of outsource handle almost all Cathay IT needs. They team up with IBM for their infrastructure and SABRE for their airline applications solutions. This was an excellent decision by Cathay to aid to reduce cost. Later Cathay outsourced there data centers to IBM also and in the proposal state that the structure they offer must be 10 вЂ" 15% less than there in house cost; and also IBM over a period of time will have to absorbed all of Cathay IT staff. They also outsourced desktop support to IBM for a five year $50 million contract. Now Yeung has 65% percent of his IT