Guest Post: Transforming a legacy giant into a digital pioneer

By Travolution
By Travolution
July 11, 2014 11:49 AM GMT

David Stevenson caught up with Tui Travel’s technology chief Mittu Sridhara to find out about the travel giant’s vision for an "anytime, anywhere, anyway" future

If the proposed merger of Tui Travel and Tui AG goes ahead one thing is absolutely certain, Mittu Sridhara's workload is likely to radically increase.

Tui Travel's chief information officer Sridhara is a hugely articulate champion of the mantra "anytime, anywhere, anyway", a natty summing up of Tui's vision for the future of the digitally enabled package holiday.

Mittu is already grappling with a group-wide technology transformation which I'm guessing is probably far more challenging than anything he's seen before in previous jobs at Sabre and Avis.

Sridhara freely admits that trying to integrate Tui Travel's legion of legacy systems is a challenge that has already taken more than a few years, so one can only guess how much extra work a merger with AG will add to his burden.

All of which I suspect gets in the way of his core mission for the next few years - to turn the humble package holiday into a digital product.

To understand what's brewing at Tui Travel - and its revolutionary implications for the whole travel sector – let’s first consider what's been called the Clicks and Bricks challenge.

In simple terms the challenge facing Tui Travel and competitor Thomas Cook is how take a traditional physical retail product (the bricks bit), and turn it into something that is also a digital product ie has a myriad of web enabled touch points (the clicks part).

The boundaries of this transformation are important to understand - travel is not an industry that will ever succeed in completely doing away with the personal interface and actual physical product. Something real and tangible has to be delivered.

The challenge then is to integrate the digital and physical. In a sense the sensible parallel is with high street banking.

The retail high street will always need bank branches (just less of them) and sitting behind those physical shop fronts will be another physical world of call centres and logistics based product delivery that includes printing and sending out statements and cheque books and of course the boring task of cash handling.

Knitting this altogether is a vast IT framework - a good friend who was a senior exec at HSBC once jokingly referred to his bank as vast IT infrastructure that also happened to own a few bank branches.

But the customer increasingly only cares about their product experience, their 'customer journey'.

They want this experience to be seamless, fluid, low cost and safe - and increasingly online. Yet banks have for ages puzzled about how to deliver this. Is the model digital only - a financial version of dynamic packaging online - or a mixture of both digital and physical ?

A small US bank called Simple has helped answer this question in a definitive manner - it's called Simple and it is effectively the banking experience as an app.

It's a veritable business sensation and has recently been sold for an extraordinary sum of money to giant Spanish banking group BBVA.

Anyone who has ever experienced the Simple solution realises that this product isn't really a bank checking account delivered by a physical bank with branches - it's an app backed by a bank.

The whole product is delivered via one seamless cross-platform interface that is one part social, one part budget based, one part customer UX.

Simple is slowly but surely revolutionising banking in the US and it is based on a simple logic - turn everything into an integrated piece of software that is increasingly personalised and multi-platform i.e banking as an app.

The challenge for Simple is to integrate into a legacy back end - real banks and clearing systems. Luckily it's not had to worry too much about this as its outsourced all the boring stuff to ordinary banking partners whose infrastructure it piggy back's off.

Tui Travel is trying a similar transformation but without the advantage of being a start up.

Its stated aim is to move more and more of its product onto digital platforms - currently 30% to 40% of product across the group is digitally enabled (across varying geographies) but Sridhara reckons this could be moving beyond the 50% tipping point within the next three to five years.

The challenge, though, for Tui and Sridhara's colleagues is to make sure that when customers do use these digital platforms (multiple machines and languages a well as many different markets) it's a seamless experience, pre- and post booking.

In one sense it all sounds incredibly simple - one app that goes with you from holiday inception through to the at resort experience.

Yet as Mittu freely admits this involves juggling systems originally built for retailers, airlines, logistics based ground transport and local reps.

One part of this is simplifying systems of record, another integrating them all into the new digital assistant service - this newish service has already been launched in eight countries and had 600,000 plus downloads to date with up to 100,000 active users at any one time.

What's even more demanding is that Tui is bringing out new releases of the software every couple of months - tablet friendly versions are due out by the end of the summer. It's a challenging schedule but it's also only mid way through the full integration.

According to Sridhara the whole holiday experience should be included inside the app within the next nine to 12 months, with anonymous personalisation just a matter of a few years away and individual personalisation probably within the next three to five years.

But a major challenge is lurking in the shadows - at the final destination. According to Sridhara the process of equipping resort reps is only just beginning, with a number of crucial trials.

A focus on the resort end of the transaction will be absolutely crucial over the next few months - being able to plan and transact digitally isn't really that new, whereas providing a proper digital platform to use in resort could be a real game changer.

If you use existing online travel services such as Bookings.com you never really expect to have much interaction with the platforms "in resort" - the package holiday by contrast is a much more 'resort intensive' experience.

Booking trips, booking hotels, upgrading facilities - all could be easily managed in a digital manner, adding to the overall experience. But the challenge is not just to equip the reps with iPads - the hotels and resorts will also have to be ready for the onset of the digitally enabled traveller.

That means building infrastructure, making sure connections are easy and cutting down exorbitant charges for Wi-Fi.

Obviously the technology challenges facing Tui Travel don't just stop with this vision of the digitally delivered holiday package.

If the Tui CIO wants to play catch up with other digital pioneers (he's a great fan of AirBnB as well as Hipmunk) that means working out how to deliver hyper-personalisation of digital products including holiday search.

In the meantime Sridhara points to promising work on backing new tech start ups via a series of partnerships with VC firms, initial success in using social feeds as a way of 'social listening' as well as using integrated IT systems to radically improve hotel purchasing.

Over the next 12 months we should also expect Tui to be rolling out the next step in providing video content for prospective clients - Holiday View Maker is soon to emerge allowing travellers to see user generated content from key destinations.

Add it all up and an ambitious agenda emerges from the plethora of initiatives - to do for travel what Simple has done for banking. One only hopes that the merger with Tui AG doesn't get in the way.

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