American Airlines Embarks on a New Information Infrastructure in 1990

American Airlines embarked on a multiyear, $150 million project to provide better information and work practices for all its employees. InterAAct was originally described as a technology platform--an electronic nervous system that will support a vast number of future applications that have not yet been designed. It will provide a powerful workstation for each knowledge worker at American Airlines and access to such a workstation for every employee. Further, it will standardize spreadsheets and databases and provide direct access to corporate mainframes.

The project was initiated in 1988 after internal research on office automation within the company identified common problems in two areas: secretarial and clerical document handling and difficulty in accessing data across the organization. Further study concluded that the average company employee spent 61 percent of work time doing core work or attending analytical meetings and spent the remaining 39 percent on unproductive, repetitive clerical or administrative functions. The study concluded InterAAct could increase the productive 61 percent to 68 percent.

The implementation occurred on a phased basis, punctuated by some delays caused by financial strains and a series of technical upgrades. After June 1990, InterAAct was marketed internally to user groups as a utility they could choose to adopt but would have to pay for. By 1992, some 4,500 InterAAct workstations had been installed, each supporting the same standards, Windows 3.1, HP New Wave 4.0, Word for Windows 2.0, and Excel 4.0. Although the departments using it felt it was worthwhile, some of the potential advantages had not occurred. For example, the e-mail was less useful if some people on a project were hooked in and some were not.

Questions:

1. Use the WCA framework to organize your understanding of this case and to identify important topics that are not mentioned

2. The competitive significance of airline reservation systems is often noted. Explain why you believe the infrastructure described here does or does not have competitive significance.

Sources: Hopper, Max D. "Rattling SABRE--New Ways to Compete on Information." Harvard Business Review, May-June 1990, pp. 118-125;
Anderson, Espen. "American Airlines: The InterAAct Project (A) and (B)." Boston: Harvard Business School case 9-193-013, 1992.

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