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The world's largest tourism business, TUI Group, has been working hard to find synergies between its companies in the 31 major markets in which it operates. Three years ago the effort to reuse IT systems intensified, explains TUI Nordic CIO Peik Martin.
“TUI Nordic is a totally independent company in many regards, but if we want to upgrade our booking system, we do not just go out shopping for a new solution," he says. "We work together with our sister companies to try to find the best solution for us.”
Martin has spent 17 years at TUI Nordic, mostly working in sales, product and pricing. He became CIO in 2012 and was recently made responsible for IT in the whole northern region which, aside from the Nordic countries, also includes the UK, Ireland, Canada and Russia.
“We divided TUI Group into different regions after the merger of British TUI Travel and German TUI AG in December 2014. The reason is that it is easier to maximise the reuse of already existing IT platforms within bigger entities,” says Martin.
The UK, Ireland and the Nordic countries were grouped together because of similar customer behaviour, he explains. “But countries such as Russia and Canada are a bit more unique, and they might develop in a similar direction in the future.”
Martin is now head of 400 people instead of 100. “This new role is of course a big change for me, but it is nothing totally new," he says. "Ever since I began as CIO we have been working hard to map all of our existing group systems and look for similarities in the different markets.”
The goal, says Martin, is that no part of TUI Group should be an island. “Everybody should always try to think globally. But the business model is not the same in different countries,” he says. "Even Sweden and Germany have different business models."
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The Nordic countries and the UK already use several common systems, including the contracting system and the trading system, for example. “When we are implementing a new web platform in the Nordic countries we are reusing a platform we already have in the UK,” says Martin.
The new web platform was rolled out simultaneously in Sweden, Norway, Denmark and Finland. “We have pretty much the same products in all four countries, and we have already had the same technical platform and the same user experience for 20 years,” adds Martin.
The difference between the Nordic countries and the UK is much bigger, and that means reusing the web platform has not been totally straightforward. “The Nordic countries are much more mature in a digital perspective, compared with the UK," says Martin. "In the Nordic countries we are more accustomed to using digital services, and we are always connected to the internet.”
In the Nordic countries 75% of revenue comes from digital sales, while that slice is 55% in the UK. “In the UK we are still very reliant on sales in stores, while we hardly have any sales in stores in the Nordic countries," says Martin. "And in the Nordic countries sales over the phone make up most of the remaining 25% of total sales, while we still publish a paper catalogue in the UK.”
On the surface the web systems will look pretty similar, but under the surface there are big differences, Martin explains. “We have made more technical work than you might think," he says. "We have reused back-end systems before, but this is the first time we have reused a customer-facing platform.”
For Martin, the company's websites are the most important thing. “They mean everything to us," he says. "The website is where we build contact with the customers, it is where they can read about the trips and it is where they book.”
"You need a sturdy back-end solution to be able to handle the inventories, to price and to trade the products. And since we are a 50-year-old company with big, heavy and old IT solutions, it is quite a task"
Peik Martin, TUI Nordic
And it is of course not enough to have a good web platform to be able to operate the kind of websites TUI Nordic’s brands have. “You need a sturdy back-end solution to be able to handle the inventories, to price, and to trade the products," says Martin. "And since we are a 50-year-old company with big, heavy and old IT solutions, it is quite a task. We have worked hard to try to tweak things. ”
The fast transformation to a digital business model is a big challenge for the IT department, he adds. “The web came, we started with e-commerce and learned the customers’ changed behaviours – but we still have the same old, home-built booking engine we have had for years.”
Some parts have been replaced, though, and a totally new system is in the cards. “But we cannot be sure what will be the best in three, five or ten years’ time. Therefore it has to be modular and agile,” Martin says.
The competition has gone from travel agents to low-cost airlines, global hotel portals and sites offering access to trips. “And new digital services and clever solutions pop up all the time, which we have to keep an eye on,” Martin says.
Most of the competition only offers hotels or flights, while TUI offers complete packages, and this is something Martin wants to take advantage of through IT.
“We are focusing on trying to make the digital services a homogenous part of the holiday packages we deliver," he says. "The website is supposed to inspire people before they book, and a year ago we released a smartphone app geared at customers who have already booked their trip. To harmonise the customer’s digital and physical experiences is actually one of the most important tasks ahead of us.”