An agile finance operation is the backbone of every successful business, where financial data is readily available in real time to support critical business decisions. Jet fuel costs make up about 40 per cent of operational costs for an airline. If an airline is able to control these costs it can leverage considerable savings, which can then be used for improving customer services.
As an airline that operates in 25 markets across Asia, Australia, the Middle East and the US, AirAsia has a complex operation. Its finance team needs to reconcile cross-currency data and transact with suppliers in different countries.
AirAsia is working with Oracle to centralise and streamline its finance operations by leveraging Oracle Enterprise Resource Planning (ERP). Oracle ERP Cloud is helping the airline to simplify, standardise and automate its financial operations across the Group, and free its finance teams from mundane operational tasks to focus on growing its business. The deployment supports AirAsia’s growth plans and its vision to be the leading travel technology company in Asia.
In an email interview with DIGITAL CREED, Pattra Boosarawongse, CFO, AirAsia Group tells us how this solution will help the airline achieve its business objectives. She also speaks about the role of the CFO as a driver for digital transformation in business.
This interview is EXCLUSIVE to DIGITAL CREED.
DC: What are the business challenges and objectives of the airline?
Pattra Boosarawongse: Since our inception in 2001, we have championed ASEAN connectivity. We have extended our network and have launched new routes across the Asia Pacific. Now we want to transform AirAsia into more than just an airline. While we will continue to focus on our key business objectives, we are also going to focus on becoming a travel technology company in the region. We intend to provide exceptional service to customers every time. Our customer base includes the entrepreneurs present in the ASEAN region as well, who use our cargo services to move their merchandise.
Our end goal is to become an intelligent and connected enterprise.
DC: What is AirAsia’s view about technology as a driver for the business? What does ‘Digital’ mean to you?
Pattra Boosarawongse: We, at AirAsia, aim to become the first travel tech company. We were the first airlines to use the internet and social media to reach out to our customers. We believe that we need to keep on evolving else we would be left behind like so many companies out there.
We believe that every digital transformation starts with the CFO’s office. Additionally, given the nature of our business, modernising the financial and procurement functions made more sense. Digital means three things to us–first being the ability to make data-driven decisions. These decisions help us to run our organisation in a leaner and efficient way. Secondly, the data can help us with insights into our customers and help us to serve them the way they want. Last but not least, digital means disrupting the disruptors. We are looking forward to using the data that we have, to build a fintech product.
DC: What role does a CFO play in Digital Transformation?
Pattra Boosarawongse: We believe that it is the office of the CFO that steers the organisation towards the journey of digital transformation. Modern CFOs need to act on behalf of CEOs in order to respond quickly to changing conditions. The difference between the nature and amount of data that CFOs deal with is overwhelming today. If CFOs were to continue to work the way they used to, they will be left behind. At AirAsia, we put CFOs at the forefront of the organisation and not consider them as number crunchers. A modern CFO must be a person who can understand numbers and business as well.
In today’s’ competitive landscape, cost is the king. Right now, we hedge around 52 per cent of our jet fuel consumption, which makes up about 40 per cent of an airline’s cost. Oracle ERP cloud will help us to monitor and tackle these cost-related challenges. The benefits of saved money are transferred to consumers and delight them.
DC: What IT solutions were identified to address your core business objectives and aspirations? How will these solutions help you consolidate your presence in the region?
Pattra Boosarawongse: With Oracle systems in place, we are hopeful that we will be able to harness the power of data while making more impactful decisions.
Oracle ERP cloud has given us a strong foundation that has helped us in our continuous growth and strengthens our leadership in ASEAN travel industry.
Oracle ERP Cloud will connect our lines of business to enable smoother operations and to improve decision making. It will also standardise the business processes across finance and procurement functions. Additionally, Oracle ERP cloud will help us to release our finance team’s bandwidth from transactional operational tasks to enable them to focus on core business.
DC: Why was the Oracle solution selected? (Against the selection criteria).
Pattra Boosarawongse: Oracle cloud provides us with the ability to do business in multiple languages, across many countries, and comply with regulations in every region. Oracle applications are updated every quarter, so we do not need to worry about regularly updating applications manually. However, what really made the difference is that Oracle understood our concerns and business before implementing the solutions.
DC: What are the modules of the Oracle ERP solution that are being implemented at AirAsia?
Pattra Boosarawongse: We started working with Oracle with an aim to centralise and streamline our finance operations. The various modules that we are implementing are:
- Industry Aligned Chart of Accounts and Enterprise Structure Modelling: Oracle ERP Cloud connects AirAsia’s distinct lines of business to enable smoother operations and improve decision making.
- Revenue Accounting and Operational Systems Integration: Oracle ERP Cloud is integrated with our existing business systems and it provides us with a single source of truth across financial and procurement functions.
- Direct Operating Cost Controls: Oracle Enterprise Performance Management (EPM) Cloud will help us to manage and improve global account reconciliation. With Oracle EPM Cloud, we will be able to define, author, review, and publish financial, management, and regulatory reports.
- Robust Data Models to Compute and Analyse Route Contribution and Profitability: Oracle ERP Cloud and Oracle EPM Cloud will facilitate core business analysis and reporting to help us to improve decision making and drive growth.
DC: Who was the implementation partner?
Pattra Boosarawongse: Transys Solutions was our implementation partner in our journey. Transys Solutions is a platinum level member of Oracle Partner Network (OPN) and is known for its functional and technical expertise across industries and business functions viz. for Human Capital Management, Financials, Projects, Manufacturing, Supply Chain, and Customer Experience Management.
DC: Can you give us some metrics and data points on tangible and intangible post-implementation benefits?
Pattra Boosarawongse: In today’s’ competitive landscape, cost is the king. Right now, we hedge around 52 per cent of our jet fuel consumption, which makes up about 40 per cent of an airline’s cost. Oracle ERP cloud will help us to monitor and tackle these cost-related challenges. The benefits of saved money are transferred to consumers and delight them. We are totally convinced that Oracle ERP cloud will help us tackle our unique challenges.
Related news story: AirAsia takes flight with Oracle to transform finance operations
Another Oracle case study: Why a Shipping and Logistics company wants to be a Technology Company
