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Fewer Risks, More Efficiency

Uniform IT systems reduce production costs

IT systems help companies make their work processes more efficient. IT also accelerates and improves the flow of information for everyone involved – from the initial creation of a product through to an end-consumer’s purchase. Rapid technological progress on the one hand and changing consumer behaviour on the other are prompting companies to review and revise their business strategies almost continuously. At the start of 2009, Kuoni launched a three-year investment and cost reduction programme. Much of the investment is going into new technology. Benno Iten, CIO of Kuoni Group since mid– 2010, talks about the onward development of IT projects at Kuoni and the effect these projects are having on organisation, processes and communication.

Modern technologies are becoming an increasingly important part of consumers’ day-to-day lives, and things are developing very quickly. What impact did this have on Kuoni Group’s IT structure in 2010?
Benno Iten: By controlling IT investments from the centre, we can concentrate more on the areas that are important to us: areas like client interfaces and client management; or standardised, more efficient – and so cheaper – production processes; or the integration of suppliers into our processes. This allows us to improve functionality for our business activities in a very short space of time.

Two years ago, Kuoni IT became the first department in the company to start collaborating across all the different countries. Can you tell us about the impact of your global functional organisation
Benno Iten: Bringing together all the decentralised IT organisations is a challenging task. Throughout the whole transition phase we must be very careful to ensure that all the departments and people involved are given sufficient opportunity to have their say, and that all our internal customers continue to have a clear contact point for their IT requirements. We have to plan the communications process in great detail in advance and then implement it effectively. It has also become clear that a centralised IT organisation requires greater regulation of IT processes and decisionmaking (governance). The demands placed on managers also increase. The ability of line managers to communicate effectively becomes more significant, particularly when it comes to those very complex IT issues that are always hard for other parts of the business to understand. Being able explain things clearly is absolutely vital.

In the medium to long term, what do you think the most important developments in IT are going to be for a globally active, broad-based travel company like Kuoni?
Benno Iten: In the face of strong, technologydriven change, a global IT organisation needs to be extremely flexible. A business model that might be successful today can easily change tomorrow, so we have to react very quickly to Kuoni’s changing business requirements. At the same time, transparency and cost control are the highest priority in our sector. The margin situation in the travel industry does not allow much room for major experimentation.
IT is a big part of the Kuoni Group’s three-year investment and cost reduction programme. What was the money used for during 2010?
Benno Iten: A lot of the money invested in IT went on updating the most strategically important platforms. First and foremost were our internet booking system, the Customer Relationship Management (CRM) systems and the production systems – i.e. primarily the technical tools that help Kuoni employees implement our customer-focused strategy at the point of sale, and the tools that are used in the production of our holidays.

Kuoni’s goal is to reduce the number of different local booking systems it uses around the world, and over the longer term to unify them into a single global system. This is obviously a very complex task. How much has been achieved so far?
Benno Iten: The standardisation of booking systems will help reduce production costs substantially. It will also improve our internet booking capabilities. Consequently, we decided that the first systems to be replaced should be the ones that would bring us the greatest improvements in these two areas. The system we are aiming for is already operational in some initial markets, and we have now optimised it to the point where we can start rolling it out in other markets.

The project phases have been reviewed again. How will the implementation look from now on?
Benno Iten: The individual business areas thought the original plans looked very ambitious, and decided that trying to implement them in parallel with their normal day-to-day business would create significant risks. We took account of their concerns and divided the whole project into clearly defined phases. We’ve reduced the risks but are still making it possible for the different business areas to benefit from improvements in production and sales, as well as reaping the financial benefits.

Many international companies in different industries find that IT projects are very complex, but that they make an enormous contribution to business success if implemented properly. What can Kuoni learn from other industries, and in what ways can we be an example to other businesses?

Benno Iten: It’s natural to want to start implementing and using new systems as soon as possible. But experience in other industries shows that you need to spend sufficient time preparing the way before you start migrating the big core systems. This certainly applies to our major IT projects.

BENNO ITEN

Benno Iten has been Kuoni’s Chief Information Officer since 2010, and was previously Head of Sales at Kuoni Switzerland. He has many years of experience in the IT business. Before he joined Kuoni, he worked in senior management positions at various technology companies.