Table of Contents
Before discussing how “big data” can be used by Easyjet to improve its operation such as improve its profits, customer satisfaction, fleet management, fuel consumption management, and so on just the way other budget airlines in other countries have done, it is important to understand what it means.
What is “Big data”?
Big data is generally a large of collection of data or data set that can be collected and analysed (researched on) so as to reveal trends, associations and patterns that may be associated with human interactions and behaviour (Wenguang Chen, et al., 2016). Not only can it be used to reveal human interactions and behaviour but can also be used to analyse performance of machinery, among other things.
How “big data” can be used to improve business operations
“Big data” reveals trends, patterns, and associations related to human behaviour in a number of ways. First, it can be used to be used to gain insights such as preferences of the customers. This information can be used to improve and enhance sales and marketing strategies which in turn increases, profits, revenue and shareholders’ wealth. Secondly, it can be used to accurately forecast a number of business operations such as when an equipment will require replacing or overhauling, or future spending patterns of consumers, and so on (Walker, 2015). Knowing such information will help management make appropriate and accurate decision regarding action to be taken. Thirdly, it may be used to automate business processes which may in turn make businesses and organizations become efficient in their operations. Finally, the analysis of “big data” provides up to-date and detailed performance indicator of an organization (Wenguang Chen, et al., 2016).
How does big data differ from conventional (traditional) data?
For a data or data set to qualify to be called a “big data” it must possess the following properties.
Big data is usually extremely large such that it is extremely hard to be processed by a single spreadsheet, single computer, or by conventional database management system (Wenguang Chen, et al., 2016). Traditional data may, on the other hand, be managed by a single computer or spreadsheet. Some companies hold “big data” whose sizes are in the order of multiples of petabytes (1015 bytes) or even more. Atypical PC may hold a gigabyte of data on its random access memory (RAM). This means that big data of such a magnitude may be held on multiple millions of personal computers (PCs).
Big data consists of a variety of data which can be structured or non-structured. The data may be non-uniform, from different sources, arriving regularly or irregularly, maybe from internal sources or external sources, and so on. A single data or data set may consist of the following information: passenger browsing activities (such as pages visited, downloads, search histories, membership sites); financial transactions, geographical information, customer buying habits, reaction to advertising emails and on internet (social media), social media in formation, email information and so on (Wenguang Chen, et al., 2016).
The final characteristic of big data is velocity. The information contained in big data should be able to be obtained within a short time so as to be used in performance management and business decision making (Wenguang Chen, et al., 2016).
EASYJET BRIEF BACKGROUND
Easyjet was established in 1995 as budget airline (low cost airline) in United Kingdom. Currently, it is a leading budget airline in Europe, and the largest low cost airline in United Kingdom. The company is headquartered at Luton Airport, London. Its operations are generally concentrated in Northern and Western Europe. The company considers these regions as having high tendency of travelling. As of 2015, the company was operating in over 600 routes across 30 nations, and had a fleet of more than 200 aircrafts (Fedosova, 2016).
The airline has culture of being unique and not following others. This culture has been replicated to its staff as they are encouraged to be themselves or unique than copying others. To this effect, the company is even encouraging its staff to dress casually, not to hide behind a tie and a suit (actually tie is banned at EasyJet), and to be themselves. Their crew members tend to wear uniforms designed by themselves (by the crew members themselves) (EasyJet, 2017).
Flat hierarchy management
The company also has flat hierarchy kind of management. This kind of management tends to eliminate layers or stages of management. This management type is intended to give the company a “one team” approach when delivering services whether in an office or on board an aircraft. The management type is also intended to support the company’s goal of providing low cost air travel and encourage its value for simplicity (EasyJet, 2017).
EasyJet is also an open minded organizations. In fact, employees do not have designated offices, they work in an open area. This is done to demonstrate and encourage the culture of openness, working together, supporting each other, sharing experiences, and so on (EasyJet, 2017).
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HOW BIG DATA CAN BE USED TO IMPROVE OPERATIONS AT EASYJET
A number of aircrafts throughout the world (such as the Southwest Airlines of United States of America) have been using big data to improve their operations. In fact these airlines know where the their passengers have flown before, where they are flying currently, their cabin class, their preferred seats, how they search for flight bookings, how they respond to fluctuations in booking prices, the airline their customer might book instead of them, whether a customer will be returning with them in case they did not fly out with them, whether a customer will need a car or not, the class of hotel they might book, customer’s popular route, and so on (Exatax, 2017). They also know their most valuable and loyal customer so that in case their flight is cancelled they are helped first.
The above information (which is usually obtained from big data analysis) has helped these airlines to accurately design new timings, new routes, matching routes to aircrafts, and make “individualised offers to their customers”. The question is “how can big data be used to help management accounting at EasyJet in a way that it enhances the culture and strategy of the company?” This is how.
Benefits of Big data to management accounting in EasyJet
Providing personalised offers
Because of the big data, EasyJet can know (or probably they already know) a lot of information about their customers. Some of these information may include: search history; departure and arrival date and time; checked luggage; destination and departure city; number of earned credit card points; in-flight food choices; cabin class; miles flown; and so on. These information (data) may be used by the management accountants to help the company offer unique and personalised offers to their customers. This is an airline that encourages uniqueness therefore offering unique and personalized offers to their customers enhances their strategy and culture of uniqueness. A tailor made (personalised) offer usually increases customer satisfaction which in turn enhances their loyalty (Exatax, 2017).
EasyJet already has a lot of information about their customers (these information have already been stated in the above paragraph) since every single booking made by the customer already contains a lot of beneficial information that can be used to offer personalized offers to them. Every information from customer priorities, previous bookings, current books, to previous purchases, and so on may be used to provide them with offers specifically customized to them (Exatax, 2017).
Improvement of EasyJet marketing efforts
In addition to offering personalized offers EasyJet may use big data to improve its marketing strategies and efforts. EasyJet may collect detailed data from their customers, analyze the data, and use the information found in the data to offer them special offers. This may increase the probability of getting positive response from the customers. Such information may be used by the airline’s management accountants to predict and measure how customers will behave or think which may be used in future marketing activities. For example, from big data analysis the airline may understand the traveling trends in a particular route and launch marketing and promotion related to that particular route (Exatax, 2017). For instance, promotion may be launched by EasyJet on its London-Italy route if their data analysis predicts increased passenger travel in that route.
Such marketing strategies may be unique in each and every route depending on the customer demands and characteristics unique to that route. This is line with the company’s culture of being unique.
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Since big data can be analysed by the airline’s management accountants to track and understand customers’ ticket purchase activities, and predict demand patterns in a particular route, it can be used to decide ticket prices on that particular route. For example, if the results of big data analysis indicate a decrease in ticket purchase activities (decrease in demand) on a particular route, EasyJet may adjust its ticket prices on that particular route to encourage passengers buy their tickets. This may in turn increase demand thus giving them competitive advantage over their competitors (who might have not do so). This is line with the company’s culture and strategy. It is usually the aim and strategy of each and every business to be competitive than its rivals. Therefore, understanding passenger trends along a particular route though big data analysis, and give them specialized (unique) offers will definitely give EasyJet competitive advantage.
Using historical information from the big data, EasyJet management accountants may be able to predict passenger demands up to many months in advance. Such information may be of great importance when the company is intending to open new routes, codeshare alliances, and make changes to its schedules (Exatax, 2017).
Usually a large number of data is generated during flight. Such data may include: warning reports, incident reports, pilot reports, control positions, and so on (Exatax, 2017). Such data may be monitored and analysed so as understand their trends, sources, and how to prevent incidents thus enhancing the overall safety of EasyJet’s aircrafts.
Enhancing customer satisfaction
EasyJet may collect and analyze passenger (customer) data from social media networks, emails (emails sent to the company), and so on to understand their passengers behaviour in real-time. Such information may be used by the customer service representative or personnel offer the best customized service to a customer thus enhancing their satisfaction (Exatax, 2017).
The management accountants and IT experts of EasyJet may also use big data to develop technologies that will enable their customers track their ways through airport terminal, and locate facilities such as lounges, boarding gates, retail and food outlets, toilets, and so on. Such technologies may also help customers track their children in the airport terminal or even when they are travelling alone (Exatax, 2017). The technology may also help Easyjet customers locate their cars in the car park, and so on.
Challenges of “Big data”
Big data is usually extremely large such that it is extremely hard to be processed by a single spreadsheet, single computer, or by conventional database management system. Some companies hold “big data” whose sizes are in the order of multiples of petabytes (1015 bytes) or even more. Atypical PC may hold a gigabyte of data on its random access memory (RAM). This means big data analysis require specialised computers and software which may be hard to find (Wenguang Chen, et al., 2016).
IMPLICATIONS OF THE FINDINGS ON BIG DATA
It has been found out that collection and analysis of big data, and conversion of the results of analysis into meaningful business information is extremely important for management accountants. It is therefore, important for management accountants like me to understand tools and techniques used to collect and analyse such data. Such tools and techniques may include data mining techniques, and so on.
Big data can help EasyJet understand its passengers (to individual level), identify their behaviour patterns, foresee their future trends, determine their preferences, and so on. Knowing such information may help the company offer customized services to them thus enhancing customer satisfaction. By exploiting the opportunities currently being offered by “big data”, EasyJet will be able to make informed strategic decisions thus helping them gain competitiveness in such a competitive industry.
- EasyJet, 2017. Our Culture, Vision & Values. [Online]
- Exatax, 2017. How Airlines are using Big data. [Online]
- Fedosova, A., 2016. Comparison between Low-cost and Traditional Airlines. Case study: easyJet and British Airways, London: Arcada.
- Walker, R., 2015. From Big Data to Big Profits: Success with Data and Analytics. Oxford: Oxford University Press.
- Wenguang Chen, Yin, G. & Lu, Z., 2016. Big Data Technology and Applications. Beijing: Springer.