Tour de thought

Of the many departments that make Thomas Cook as successful as it is, the work done by the IT sector is something that stays firmly behind closed doors. So while innovative advertising slogans and whimsical TV campaigns are drawing in dreamy punters, or glossy brochures are being flipped through on rain-sodden buses or on lunch breaks in strip-lit offices throughout the world; while the local travel agent is hastily scribbling the latest deals and hanging them in shop-front windows where they catch the eye of sun-starved shoppers, and while the busy check-in desk is swamped with families smelling of sunscreen and sporting bags, cases and holdalls of various shapes and sizes; and while the instantly-recognisable cool-blue tailfins of the Thomas Cook planes are descending into view at airports all over Europe at the end of yet another memorable and successful holiday…as all this is going on, Thomas Cook’s dedicated team of IT professionals is working diligently to ensure that these treasured and memorable holidays can be enjoyed by many future generations to come.

“The CIOs that are going to make a difference today and in the future are the ones that can bring ideas to the table.”
-Gary Edwards

Such legwork may go unheralded by the consumer, but from within the Thomas Cook Group there is a grateful understanding of the continuous challenges the IT sector of a company with the scope and scale of Thomas Cook must face and overcome on a daily basis. Gary Edwards is Group CIO for Thomas Cook, and when he takes a minute from his busy schedule to cast some thought over the business, he sees an IT landscape ripe for simplification and standardisation. "I am actually the first Group CIO for the Thomas Cook business. We currently have a decentralised business model where we have 20 CIOs across the group that, over the years, have obviously driven various solutions into the group. So I think the main challenge facing me as Group CIO is to put a group strategy in place. This would be achieved by simplifying our IT landscape in order to make it more reliable, drive more efficiencies and find ways to exploit our technology landscape to make us more competitive in our industry sector."

Edwards has only been at the helm since September 2009 and has already undertaken some research that has enabled him to paint a clearer picture about exactly where the Thomas Cook Group can begin streamlining its IT processes. "With some of the statistics and figures I have been able to ascertain while I have been at Thomas Cook, the strategy becomes self-defining. What I mean by that is if we look at our application architecture across the group, we have 1200 business applications - far too many for any Fortune 100 Company."

Hence, Edwards sees it as a no-brainer that Thomas Cook must seek to simplify its application landscape. "If I look at our infrastructure," he says, "we have multiple commercial models and multiple solutions in the provision of workplace environments for desktops and laptops, networking arrangements, and most importantly our data centres. So there is an opportunity to standardise and rationalise our infrastructure from desktop through to data centres across the Thomas Cook Group."

Despite a number of inherent good practices already incumbent at Thomas Cook, Edwards is adamant that more can be done to bring tighter standards across the department, and whether that means adopting cloud computing, opting for virtualisation or utilising a utility on demand managed service, he is keen to ensure that the group has a streamlined and standardised approach to its IT services.

"There is an opportunity for us to have an IT sourcing strategy that will allow us to align up with strategic partners and have true strategic management in place that will be aligned to a group architecture and technology roadmap," says Edwards. "This is a great opportunity to have much more fulfilling relationships with some key IT partners, but at the same time we can look at our project effectiveness and the way we manage our portfolios. There is always room for improvement, especially when looking at the level of investment we are making and driving the right agendas for the group as we are for the individual markets."

CIO role

As Group CIO, and the first one the Thomas Cook Group has employed, Edwards is acutely aware that his role must be clearly defined and accountable, working alongside the CIOs in place in the various countries in which Thomas Cook operates. "My vision here is to move to a classic demand management and supply management model, so I envision my country CIOs reporting into the business. They will be accountable for their local IT strategies, demand management and prioritisation of what they need to do on behalf of the business," says Edwards. "I also see them being accountable for innovation in the way we use technology in the local markets for portfolio management and for solution management. So they are really shaping what we need to do on behalf of the business."

With Thomas Cook's CIOs delivering projects, quality of operational services and financial transparency, the Group CIO, believes Edwards, must then be responsible for implementing change, restructuring and growth. "I see the group CIO function as a driver for the right policies, the right standards on a group strategy and on an architectural roadmap, so that helps give us some control frameworks along with the right processes of governance, but then fundamentally we are managing the supply side. So in quite simple terms it is a software factory. So creating the software factories and infrastructure, service providers should be managed by the group as a supply chain into the demand being articulated by the country's CIOs. This gives us better economy to scale."

With clearer management, superior results and performances will occur, but it is not all about the delivery ability of the staff, says Edwards. "It will come via our testing environments, our landing slots for moving things into production environments, which will allow us all to be moving in a similar direction when it comes to the solutions, the applications, or the infrastructure to serve our different local markets. That's the vision. That's the challenge. Many CIOs have gone on this journey and have been successful; many have failed. "

Mobilising for growth

During the early part of 2010, The Thomas Cook Group - on Edwards' insistence - focused on prioritising quick wins, putting in processes and governance around the issue of demand and supply and designing how their IT model will work in the new demand-supply model. The next step is understanding the impact that these designs have had on the business and, in 2011, to begin implementation. "Other things we still need to do this year is issue RFPs to a number of the usual suspects that can play in the infrastructure space, desktop networks and data centres," says Edwards. "Because what I am looking for are global providers. Thomas Cook is a very ambitious business. It has grown considerably over recent years through natural growth and acquisition. We currently are looking at other emerging markets in Russia, China and elsewhere in Asia. We have a good footprint in Canada and North America, and we want to grow that. We are very dominant in the UK and Europe and we want to protect that and do other things in terms of our multi-channel strategy."

Thomas Cook is already in 22 countries and hope to diversify into regions that will pose a different set of challenges. "Such growth," explains Edwards, "affects our infrastructure provision. We may be going into even more diverse countries than those in the European market, and this calls for more knowledge of data centre provision, data centre strategies, network provision, the future of cloud computing, virtualisation and workplace environments, whether that be desktop, laptops, terminal services or BlackBerries. This entire strategy needs locking down and we need to pick the right partners we are going to work with, which may be some of the people we work with today, or it may be new players. "

The effects of the recession hit the travel and tourist industry particularly hard, both in a commercial and an operational capacity. "The recession has had an impact on our ambitions," says Edwards. "From a strategic point of view we must ensure we retain market share in our traditional business, which is tour operating prepackaged holidays for our customers, of which we have 22 million.  Also, more of our consumers are moving towards what we call dynamic packaging where, whether they do this online or go into one of our retail stores or call the contact centre, they want to be able to say: 'Well actually I want to fly on this day to that destination, and then I want to move on to this destination and I want these hotels because I have already decided where I want to stay.' So the consumer pre-packages their holiday, which is becoming more prevalent in the industry. Of course, what you have now is companies like Expedia and LastMinute.com that really are technology companies that are selling holidays rather than a holiday company like ourselves that uses technology."

As part of a strategy to manage margins and keep the Thomas Cook Group operating at the sharp end of the sector, Edwards is adamant that growth must be managed and strategised in a more structured manner. "I am looking at our independent businesses as a second gang plank to the strategy, which is where the growth story is, and the growth story is very much about how you use your multi-channels, and particularly how you leverage e-commerce or the e-channel for both the B2C model and the B2B model.

"I think the third gang plank is many consumers look to us for financial services, whether it's travel insurance or currency exchange, and there is more we can do in that space of opportunities. Fourthly, we have a lot of acquisitions over recent years in different countries and the opportunity around acquisitions remains. Playing this against the economic backdrop, we need to continue to manage costs because margins in this industry are very, very aggressive: they can range from between two to eight percent, so cost leadership is a key discipline within Thomas Cook."

Using IT to drive more value for money is something that Edwards is adamant Thomas Cook can achieve. "We can cut our current expenditure on IT," he says. "When you have 1200 IT suppliers you are not getting an economy of scale debate in your commercial model, and so there are definite opportunities to realign that supply chain and to optimise it and to reduce the number of physical suppliers."

Delivering change

From within, the Thomas Cook IT department is keen and eager to implement change throughout the group. And not just in matters of IT, but in cross-channel areas that can help the business to better achieve its objectives. How this will be done remains a constant challenge, but Edwards has identified a couple of areas where the IT department and its CIOs can begin realigning themselves in order to assist the business.

"The phrase 'CIO' is bandied around too loosely, and when you look at the different individuals that claim the CIO job title, what they actually do varies considerably, and Thomas Cook is no different," says Edwards. "We have 21 CIOs including myself, and some of the individuals are excellent operational service managers. Some are great at delivering change. Some are good at technology architectures and roadmaps; but they all call themselves CIOs. My personal view is that a true CIO must work very closely with the business, must understand the industry sector, must understand the business strategies, and must be commercially astute and bring to the table how we might exploit technology to leverage things in the business.

"An example: It is very easy for the business to turn around and say to a CIO, 'can you take ten percent out of the cost?' and many CIOs will achieve that one way or another. Ten percent out of any cost basis is always a welcome benefit, but if I take Thomas Cook as an example, ten percent of our IT cost is a drop in the ocean compared to if I can help them innovate their sales process. So if I can take one percent out of that because we re-engineered processes or we stopped duplication in business processes across the countries, if we can exploit the technology to help the group do something in a different way, then the prize there is far greater than me just saving ten percent of my budget."

This is an area where the CIO community can add real value to an organisation. CIOs and their IT departments have had an increasingly difficult task in recent years, and the struggles of the recession have brought home just how important it is for every sector of the business to not only prove its value and fight for its existence, but also to augment its skills sets in order to bring more profitability to the business.

"A CIO merely keeping the lights on is just undertaking the bread and butter part of their job," says Edwards. "The CIO having a strategy that helps simplify IT is the bread and butter part of the job. The CIOs that are going to make a difference today and in the future are the ones that can bring ideas to the table with the business about how to actually transform the business and exploit technology to help them do that. I think the trick is recognising that the technology industry is about to hit another wave of change. Whether we wrap that up around cloud computing, around the convergence of the workplace environment, or whether we look at the power of the bandwith that is available through networks that could change the business operating model with home workers. In IT we have these periods when there is a new wave that really opens up the way we do business, and I think we are just about to embark on the next one, but it is something that needs to reach a bit more maturity yet."

The Thomas Cook Group

Thomas Cook Group plc is one of the world's leading leisure travel groups with sales of around £9 billion (€12 billion), 22.3 million customers, 31,000 employees, a fleet of 93 aircraft and a network of over 3400 owned and franchised travel stores, with interests in 86 hotels and resort properties.

It operates under five segments: UK & Ireland; Continental Europe (Germany, Austria, Belgium, France, the Netherlands, Poland, Hungary, Slovenia and Slovakia); Northern Europe (Sweden, Norway, Denmark, Finland), North America (Canada and USA); and German airlines operating under the Condor brand. The Group operates in 21 countries including India and Egypt.