THE risks of outsourcing have been dramatically illustrated with the Virgin Blue computer meltdown, the impact of which is still being felt three days after the reservation system collapsed for 21 hours. Some passengers due to depart on Sunday are still awaiting takeoff. Australian media is packed with images and stories of stranded passengers and stressed staff. It’s an awful look that will continue for at least another day.
The Virgin brand has suffered long-term damage, especially among the business travellers (relatively) new CEO John Borghetti is trying to woo. There’s now talk that Virgin will sack its IT supplier Navitaire, part of Accenture, which had undertaken to limit outages to just three hours, but that appears unlikely.
There are few if any alternatives. More probable is compensation but how do you estimate the cost of damage done? You just can’t put a figure on it. And whatever happens, Virgin Blue is the brand that will pay the price for making the decision to outsource.