KLM Royal Dutch Airlines: Expanding Electronic Services through Service-oriented Architecture

Accenture continues to team with KLM, using this technology approach more broadly to help enable high performance.

Based in Amsterdam, the Netherlands, KLM is a pioneering airline that was founded in 1919. With more than 30,000 employees, the airline realized operating revenues of € 7.2 billion and operating income of approximately € 540 million in its most recent fiscal year. KLM carried nearly 22 million passengers and 619,888 tons of cargo, and provided more than 100 airlines with engineering and maintenance services. With its fleet of 190 aircraft, KLM ranks fifth among airlines in the Fortune Global Most Admired Companies survey.

The global airline industry had little time to begin organizational and operational changes that would enable them to survive the combination of 2002’s dramatic decrease in passenger air traffic and the intense downward pressure on airfares caused by discount airlines. KLM moved swiftly and aggressively to analyze its cost base, examining all areas of operations for new streamlining opportunities.

In 2003, KLM retained Accenture to develop and enhance the airline’s Web-based applications through the early adoption of a service-oriented architecture (SOA) approach. In particular, KLM management wanted to ensure cost-effectiveness by providing the ability to develop and reuse Web services that would best support the dual goals of streamlining operations and improving customer satisfaction.

SOA was ideally suited to KLM’s business alignment aims and Accenture was well positioned to team with KLM to address strategic business challenges, develop an IT infrastructure for enabling accelerated application development and organizational flexibility and provide education and training on SOA, all to support high performance. The collaboration between Accenture and KLM has yielded the e-commerce applications that have delivered better than expected flexibility and customer satisfaction.

Accenture’s extensive cross-industry research reveals that high-performance businesses develop distinctive capabilities to support operational efficiency and business innovation—which is why Accenture and KLM made SOA the cornerstone of the expansion of the airline’s electronic services.

Accenture’s architecture and development team worked closely with KLM to develop the overall SOA IT architecture. Furthermore, it identified reusable services that would make it convenient to quickly develop new applications for the airline. As an example, KLM recently launched an electronic booking tool application for its customers. The application is based on reusable services that are also used for the electronic ticket booking applications for its own employees as well as by other parties outside KLM.

In addition, the SOA layers that Accenture helped create are aiding the smooth migration of application services from KLM mainframe systems to a new platform. KLM’s SOA underpins the Reservation & Pricing Services Layer (RPSL) that supports the migration of more than 30 e-commerce and operational applications from KLM legacy systems to the Amadeus booking system, an industry-wide standard commodity service provider for airlines.

Service-oriented architecture has helped KLM fulfill its business objectives and has let KLM expand electronic services as a central feature of its approach. Its new SOA technology environment has evolved to where it provides a solid foundation for the reuse of services, creating opportunities to use existing services to build applications that save time, save money, deliver old revenues through more efficient channels or contribute to new revenue generation.

Today, as a result of three focused years of Accenture/KLM teamwork, KLM is seen as one of the world’s leading airlines for implementing ambitious, forward-looking electronic business activities, and it is reaping the rewards of SOA.

Furthermore, KLM’s comprehensive approach to SOA has lowered its overall cost of integration through the application of industry-wide Internet standards that reduce time to delivery, as well as enable centralized enterprise-wide service monitoring and management—and has provided a common technique for data integration from multiple sources, both internally and externally. In addition, the airline’s standards-based, scalable and extensible extendable service layer has made it possible to deploy interfaces that were previously too complex or costly, extending the reach of SOA more broadly than first imagined.