JetBlue picks SAP for major ERP rollout

Rapidly growing airline JetBlue Airways said this week it has selected SAP AG's ERP software as the foundation for its new back-office systems project, a multimillion-dollar initiative to replace a patchwork of more limited applications.

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Six-year-old JetBlue, based in Forest Hills, N.Y., currently has around 8,000 employees but expects to double that number within the next several years. In its start-up years, the company acquired enterprise applications as needed for specific initiatives, without a company-wide ERP software strategy, according to Vice President of People Vinny Stabile. JetBlue decided last year that its growth plans required a more comprehensive approach. SAP's broad, integrated applications portfolio helped it win JetBlue's business, Stabile said.

SAP's size and stability were also selling points. "One of the comments I made to the selection folks was, 'I don't want to be anybody's biggest client,'" Stabile said. "I don't want anybody learning on my time." JetBlue, which had revenue of $1.3 billion, only considered vendors that were already supporting organizations with at least 30,000 employees, he said.

SAP and PeopleSoft were JetBlue's finalists late last year -- right around the time Oracle finally won its 18-month takeover battle and sealed its deal to acquire PeopleSoft. The tumult associated with that transition helped steer JetBlue toward SAP, Stabile said.

Working with its own staff, SAP consultants, and a team from IBM Global Services, JetBlue is already under way with "phase one" of its SAP deployment. By Jan. 1, 2006, it plans to have SAP running its human-resources back-end and employee self-service functions, replacing the Kronos Inc. software JetBlue currently uses. In early 2006, JetBlue plans to phase in purchasing- and materials-management software from SAP. Beyond that, JetBlue will see what needs arise as it decides how much of SAP's suite to implement.

One area SAP is unlikely to touch is JetBlue's customer-facing sales and CRM (customer relationship management) systems. Those systems are completely separate from the airline's back-office software, Stabile said, and JetBlue has no plans to integrate the two.

Where SAP may make inroads is in JetBlue's extended HR (human resources) infrastructure. JetBlue currently uses Recruitmax Software Inc. software for recruiting management and Performaworks (now owned by Workscape Ind called OneForce) for performance reviews and succession planning. SAP offers applications for managing those functions, and once JetBlue has completed its priority SAP projects, it will look at whether to integrate its existing applications or replace them with SAP's, Stabile said.

JetBlue is currently in the blueprinting stage of planning its SAP initative. The big test will be how smoothly the deployment fares as the Jan. 1 deadline nears: JetBlue is determined to synchronize its HR system replacement with the calendar-year change. "We know we're on a very tight schedule," Stabile said.