Lufthansa Group outsources its IT infrastructure

Outsourcing IT infrastructure in the midst of ongoing operations is a huge challenge for any company. Successful outsourcing is especially important if it is intended to cut costs and improve processes and services, which is why the Lufthansa Group sought help from Lufthansa Industry Solutions.

The customer

The Lufthansa Group is the 100-percent parent company of Lufthansa Industry Solutions. Lufthansa Industry Solutions is one of the globally active air transportation group’s total of 540 subsidiaries and associated companies. Passenger transport is the Lufthansa Group’s largest business segment. The group’s service companies are some of the leading providers on the global market. They actively harness opportunities for growth in the areas of cargo, technology, catering and financial services and strengthen the group as a result. In 2015, the Lufthansa Group, which employs more than 120,000 members of staff, achieved annual revenues of EUR 32.1 billion. With its three synergistic pillars – Premium Hub Airlines, the Eurowings Group and Aviation Services – the Lufthansa Group continues to successfully position itself as a leading air transport group in a very dynamic market environment.

The challenge

As of April 1, 2015, the Lufthansa Group sold its IT infrastructure to IBM in order to cut costs while ensuring itself access to the most cutting-edge IT technologies. Since then, IBM has been carrying out its IT infrastructure services – from the provision of servers to PC workstations. In addition to this, IBM has taken on roughly 1,400 staff members from the group’s subsidiary Lufthansa Systems AG.

Within the scope of the outsourcing project, IT infrastructure and staff were transferred to the new provider, IBM, as of April 1, 2015. IBM assumed ownership of the IT infrastructure in the form in which it had been operated by Lufthansa Systems AG up until handover day – which means in the “current mode of operation”. Currently, the process of transformation is taking place alongside the transition process, i.e. the pure transfer of responsibility. During this phase, new technologies are being used to develop operations into their future, optimized state – the “optimized mode of operation” – and then into their “future mode of operation”. This means that technologies, processes and interfaces have to be standardized and optimized in order to achieve the outsourcing objectives.

In order for IBM’s takeover of services and staff from Lufthansa Systems AG to be a seamless success, the Lufthansa Group and IBM are carrying out the transition and transformation program together in 37 individual projects. Lufthansa Industry Solutions is providing substantial assistance to this international project on behalf of the Lufthansa Group, as Lufthansa Industry Solutions is able to provide the project management skills and capacities necessary for this complex task.

The solution

During the transition and transformation program, Lufthansa Industry Solutions is taking charge of large parts of the project management. In addition to this, the company is providing human resources such as program managers, partial program managers and project managers. This means that IBM can continue to provide services and carry out its operations undisturbed during the transition and transformation, while ensuring that the Lufthansa Group achieves its anticipated cost reductions.

Specifically, alongside the planning and management of processes on the part of the Lufthansa Group, Lufthansa Industry Solutions’ project managers are assuming responsibility for budget planning, controlling, assuring the quality of the primary program plan and reporting. Moreover, Lufthansa Industry Solutions is in charge of monitoring and receiving IBM’s services and is the central point of contact with IBM.

The customer benefit

By taking charge of program management as a service provider, Lufthansa Industry Solutions is able to ensure that there is harmony between the interests of the Lufthansa Group and its central IT department, as well as that of the IT infrastructure service provider IBM. The large number of projects taking place within the scope of the transition and transformation program – at its peak, up to 37 projects with 200 project participants – can be successfully planned, managed and completed using the resources provided by Lufthansa Industry Solutions. This means that outsourcing will enable Lufthansa Group to reduce costs as anticipated and that the program is likely to be completed successfully as planned in March 2017.

With their expert knowledge, Lufthansa Industry Solutions’ program and project managers are playing a huge role in the seamless implementation of this transition and transformation program within the scope of our outsourcing to IBM.

Josef Bogdanski
Chief Information Officer, Lufthansa Group