The TUI Travel of today is a very different beast to the TUI Travel of four years ago. The global leisure company has just celebrated its most profitable year - more than £15 billion in revenue and a 20 percent growth year-on-year in profit to £589 million in 2013. The major accounts system fault that caused a multi-million restatement of its 2009 financial results is now all but a distant memory.
Part of the company’s evolution is down to the appointment of a new group chief information officer (CIO), Mittu Sridhara. In the two years since he joined the company in March 2012, Sridhara has led a transformation of TUI’s IT organisation and governance to enable the company, which counts First Choice, Laterooms.com, Thomson and Thomson Airways among its brands, to deliver a new way of working that aims to foster innovation, while streamlining systems and costs.
Sridhara came to TUI from betting firm Ladbrokes, taking over from Jim Mann, who retired after 12 years at the leisure company. At Ladbrokes, Sridhara designed and delivered a three-year, multi-channel, end-to-end technology strategy for the company. He started his career at American Airlines, and also held senior IT roles at vehicle hire company AVIS Europe and Sabre Holdings, which provides IT solutions to the global travel and transportation industry.
He is therefore no stranger to technology transformation or to the travel industry. As well as this experience, Sridhara brings a vision of what he’d like the future TUI to provide for customers - an “end-to-end, connected and seamless” experience that “takes the hassle out of travel” by anticipating what travellers want, and fulfilling that requirement.
A seamless customer experience
Imagine, for example, a mother has forgotten to buy a specialist suntan lotion for her son for their Thomson package holiday. Perhaps TUI could offer to deliver that lotion - that she’s added to her holiday checklist in her MyThomson mobile app - directly to the seat on the Thomson Airways flight she is booked onto. And when she checks in for her flight, TUI could automatically check her into her Thomson resort hotel to save her the trouble of doing so when she arrives at her destination.
This is what the company aspires to do, according to Sridhara, which he says is possible due to TUI’s expansive footprint in the different verticals of the travel industry. But to get there, the company has had to completely reorganise its IT governance, moving from disparate groups to working as one across all brands and all 180 countries.
The importance of being “connected” and working as one is particularly significant after the problematic merger of First Choice and Thomson in 2007 that formed TUI Travel. As well as carrying out the already challenging task of integrating post-merger enterprise applications, the company added an additional layer of complexity by outsourcing parts of the new system. It resulted in two misaligned booking systems that caused a very costly accounting error. In 2010, TUI was forced to restate its 2009 financial results to the tune of £117 million, and its chief financial officer (CFO) Paul Bowtell resigned.
Unsurprisingly, Sridhara is keen to put the issue - which preceded him - firmly in the past. “[It] is way back in 2010, that’s been very much tackled and addressed from a financial governance standpoint,” he tells ComputerworldUK, before adding: “But compliance and security are very much key to everything we do.”
A new way of working
Instead of having separate IT teams in each country, TUI now has “hubs” of technical and non-technical employees operating in teams ranging in size between five and 40 people. The hubs are tasked to work on smaller technology projects that can be rolled out across the different brands, businesses and geographies on a single platform.
When a hub is “mature”, it is expected to coordinate innovation and products across its area of expertise working with “spokes” in different areas of the company. The largest hub in operation at the moment is 16-strong, and several hubs can be in operation at any one time.
“We will continue to evaluate the structure to ensure that the ‘hubs and spokes’ continue to deliver the agility and product or solution innovation necessary,” Sridhara says.
He refuses, however, to divulge exactly how big the IT team is at TUI, except to say that “we’re a £16 billion organisation, so the IT team is very much in the hundreds”.
He puts this down to his desire to make sure that everyone in the company works to a common goal.
“We are a technology business to a great degree,” he says.
“We’re fusing teams to ensure they become multidisciplinary in the delivery. That’s what the hub concept is about. We want everyone [in the company] to have a good degree of technical and business understanding. I don’t use the words ‘business’ and ‘IT’, because the minute you start using terms like that, you have a divide internally.
“There’s only one thing that’s true and that’s there is a customer at the end of this, and the multifunctional team has to deliver to that customer.”
Common platform, common goals
Moving from multiple platforms to a single one is part of the company’s ‘One Mainstream’ transformation programme, which the company said is helping to drive efficiencies.
“[Mainstream] is trying to get to common platforms as far as possible,” Sridhara explains. “Everywhere, one mainstream. So we have one common platform for all things mobility, one common platform web and search, same thing for CRM and data analytics, and it is rolled out across markets.”
This approach means that best practice is built into the frameworks, he explains, and duplication is eliminated.
“We’ve gone from no common products and common teams to a common framework,” Sridhara says. “We’re very much in the process of creating digital hubs and governance and ensuring the innovation comes through. Teams are self-sufficient at creating products for the business as a whole and multi-disciplined. They have their own product manager, they have deep technical skills, and they have the funding.”
For example, there are individual hubs working on developing reservation systems, internal collaboration tools, all things related to web and search and the digital assistant. The latter two have already been completed and released on a single platform across all markets. Another project, CRM, is currently being rolled out and is so far live across three markets.
“It’s for the speed. Speed and adaptability is quite key to succeed in our world. We get economies of scale as well,” he says.
TUI is trying to get away from large projects, which is why Sridhara is also vague about what IT project is a priority for the business in the short term.
“It’s very much a series of small projects, all around the customer, delivering iteratively. And ensuring that systems of records are streamlined and getting efficiencies and speed to market,” he says.
Sridhara categorises the IT at TUI into “systems of engagement”, which is all things customer-facing, and “systems of record”, which is the backend systems, such as order-taking and databases.
TUI uses an Oracle database for its customer information at the moment, “but we’re looking at more newer technologies there,” Sridhara says.
Other technology used by the company including IBM Unica for CRM campaign management and SAS as a customer segmentation tool. For web and search, it uses Hybris Software, Oracle Endeca Guided Search and Tibco Software.
The development of systems of records and systems of engagement often operate at “different rhythms”, which requires TUI to be agile. Sridhara believes that agility is “key and core” to everything the company does, and it is in the process of investing in a groupwide agile framework that has been “modified” to incorporate all the lessons the company has learnt (“Don’t automate something you don’t simplify. The customer is always first. Always do it in small chunks, so you succeed and fail faster,” he reels off) and to ensure that the company can work with this “two-stream” approach to development.
This means that if one of the projects is working in a two-week digital release cycle, and another is a four-week cycle, the hubs will use product roadmaps - which are never more than six to eight weeks long - to work together to deliver the product by the customer-driven deadline.
“Agile works if the customer is at the core. If you do agile for agile’s sake, it still fails. So we’re quite keen to ensure that the customer is at the core of that agile methodology,” he says.
Around £4 billion of TUI’s £15 billion revenue comes from online transactions, which Sridhara says is a strong indication of TUI’s online success so far. But he is determined not to stand still.
“We have a healthy business, we have healthy websites, we have a very, very good offering. But can we take that and make them better? Absolutely. So that’s what we’re in the process of doing,” he says.
Now that TUI is on its way to having the governance it needs in place to foster innovation, it is experimenting with technology in a number of areas.
For example, it is experimenting with ways of looking at customer segmentation differently using big data - a term Sridhara is not fond of.
“I don’t like the term big data. It’s about decision sciences and how we apply them to systems of engagement and systems of record,” he says.
From a systems of record standpoint, TUI is currently running a pilot project that is looking at how to solve the age-old problem of taking data out of silos and joining up otherwise disparate islands of systems. The company has been using big data technologies such as Hadoop and MongoDB database for over a year.
“It’s looking very, very promising,” says Sridhara. “Historically, we’ve never been able to join this data up, and [now] we’re able to take all this data from different geographies, put it all together and join it up in under six weeks.”
Meanwhile, from a systems of engagement perspective, TUI is dabbling in the areas of social and search. It is looking at how it can keep its offerings “fresh” based on information and trends identified on social media, for instance, so that it targets the right service at the right customer.
In order to keep at the forefront of technology innovation, TUI relies on “deep partnerships” with Silicon Valley to help the company “understand what the next innovation is and to tap into resources and talent coming out of the Valley”. Sridhara prefers not to name the venture capital partners that help him access this innovation, only saying that the company has five Silicon Valley partners, two of which are primary.
He believes that the UK’s start-up scene still needs to prove itself.
“There is a push to get an equivalent of Silicon Valley going here in the UK,” he says. “it remains to be seen if we can get the critical mass of companies, investors and entrepreneurs all together in an area with the same scale as Silicon Valley.”
Need for speed
But, “are we fast enough?” is the question that keeps this CIO up at night. While Sridhara believes that TUI is fast enough most of the time, recent events show that sometimes it is not.
In its results published in December, the company reported a six percent decline in its Accommodation OTA (online travel agent) business, due to a delay in migrating LateRooms.com to a new online platform.
Sridhara is quick to dismiss this, saying that it was a “concern with the infrastructure” that has since been addressed.
“We’re having some very good results with the new LateRooms mobile app, “ he says. “[There is] a lot more usage and significant growth coming from that app.”
The LateRooms IT team, based in Manchester and headed up by chief technology officer Stuart Hughes, is being moved into more of a hub formation as well. Sridhara is deliberately vague about the future of the CTO role.
He says: “LateRooms is its own hub as its business model is different from some of the other businesses within TUI Travel. Best practices are shared and LateRooms reports into the function as a business unit.”
Nevertheless, Sridhara claims that TUI was first to market with things like the MyThompson digital assistant app, which has been number one in the free travel apps section of the Apple iTunes and Google Android app stores for multiple weeks since it was launched in 2012. Following on from this success, TUI released the mobile app for its First Choice brand, MyFirstChoice, last month.
“The market is changing every day, we have new competitors and providers that show up in different elements of our value chain. I think we are fast, faster than many of our competitors. So we’re doing OK, but it’s something we don’t rest easy on,” he says.
Sridhara believes that online retailer Amazon is an exemplar in this area.
“They set the example of how to move quickly, how to come at problems differently,” he says, though he doesn’t think that young, smaller start-ups should be ignored either.
“Let’s take the new app in town, Uber. [It represents] the whole industry of convenience. It changes how you and I may look for a taxi. I use it in London, Bangalore, San Francisco, and it works perfectly. There’s no cash required. It’s a beautiful experience,” he enthuses.
“That’s a good example of what we want to create - making [TUI] convenient, seamless and trustworthy.”