Abstract
Having reviewed the meaning of integration in the world of TUI (normative level), this section aims at the evaluation of the newly merged organisation’s ICS management potential to realise this meaning, no matter its questionability. This potential can be seen as a combination of the organisation’s ICS competencies with the choice of ICS integration strategy.
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Notes
Schulz, Frank & Seitz (1996:pp.45–97): A comprehensive summary of the historical development of CRS (abbr. Computerised Reservation Systems) is proved here, as well as a description of the main ones operating today (e.g. TUI’s IRIS).
Jegminat(2003:p.64)
Nomast (2002:p.22)
Before computerised reservation systems appeared in the industry there were manual reservation systems based on paper cards representing allotments. Holiday bookings would arrive mainly per telephone and the cards would be accordingly updated. Even though such a manual system could still function (many tour operators have it as a fall-back system in case of system crash), the sheer volume of today’s incoming reservations, renders such an eventuality more of an illusion than anything else
Champy(2002:p.26)
Appendix C: SR5002 — Those streams form the basis of the Y model
In Appendix C: SR5001, the CEO of TUI briefly refers to the Apollo projects and hints at their significance
The word “core” is mentioned here to indicate the presence of other integration projects such as: network consolidation (consolidating LANs), core tourism systems (adopting a single reservation system — this initiative was abandoned as it proved not feasible), and development of a common IT architecture (which was also placed within the Apollo stream at a later stage)
Appendix C: SR5003, pp.22, 41, 42 & 201
See also Gammer (2003)
This is also supported by the results a Change Readiness Assessment conducted midway through the integration (see Appendix C:SR5006)
Voigtmann (2003), Möbus (2002): To take an example of how complicated a relatively simple task can be in such a landscape, consider TUI’s migration from Windows NT to XP. The shifting from Windows NT to XP (due to necessity — NT lack of support), created high insecurity with regard to the compatibility of the existing legacy systems. One could easily assume, that this very insecurity was the reason causing the IT organisation to postpone this to the very end introducing it in a risky time for daily operations
Server crashes and / or ‘network slowness’ are not uncommon (see for example Appendix C:SR6001 to SR6012, SR6017)
This fact is supported by the fact that there are numerous “IT Service Types” (Leistungsarten) to be taken into account when calculating project budgets in TUI
See for example: Quinn & Hilmer (1995), Lacity, Wilcocks & Feeny (1996), Earl (1996), Venkatraman (1997), Schwarzwaelder (2001), Appel & Dhadwal & Pietraszek (2003)
Cook(1996:pp.45–47)
Melahn & Stadler (2001), Jürgensen & Möbus (2002), Möbus (2003). Also in Appendix C: SR6018 & SR6019 — TUI Germany’s and Thomson Travel’s System Landscapes are characterised by many systems with numerous one-to-one interfaces
Appendix C: SR6013
Those core processes, their relationship to one another and the extent of system support provided are graphically illustrated by Figure 6a
For example, the unique IDs used in TRACS (TUI UK) are serially generated numerical codes (e.g. 13425), while in IRIS (TUI Germany) unique IDs contain are build on a kind of logic which allows the user to ‘read the code’ (e.g. code ‘RHO-30-030’: means Rhodes — Faliraki — Hotel Alex Beach). Another example of a technical limitation is that TRACS does not allow more than 8 room types in one accommodation unit
Room-Types represent just an example of the issues posed by different data structures. Aside room-type codes, there are: accommodation unit codes, (location) resort codes etc. Those are described separately. Room-types remain nevertheless the most challenging in terms of integration
This situation could be dealt with, in a similar manner in which tour operators deal with over-bookings (e.g. a hotel has a capacity of 100 rooms but 110 are reserved as to deal with potential cancellations). The solution usually involves making an alternative offer to the lowest yielding customer (i.e. another room type in the same hotel or another hotel altogether)
Brooke (2002) highlights the customer-related risks associated with renaming of product lines following a merger. A geographical location (or resort) represents in a way a product line in tourism terms
Discussing around the definition of what constitutes a bed may seem exaggerated, even though it represents a real problem for tourism professionals [Heimann (2003)]
Ashari et. al (2001:p.102) graphically refer to the mentioned issues as the challenge of achieving “a seamless integration of information and physical service, flexible configurations of the physical and the informational parts”
Cook (1996:pp.30–40) mentions that customer-useful differentiating features are not likely to evolve to standards. According to the author, standardisation tends to begin by a related demand in the customer base and not by internal company initiatives. In a similar manner, Horrillo (2001:p.40) mention that product information transparency in the eyes of the customer is crucial driver of electronic integration. In that sense, tourism could learn from the example of the industrial sector
Standardisation, integration and synergy are closely related and represent a key challenge for organisations. Hammer & Stanton (1999:p.115) claim that the key structural issue in today’s enterprises does not evolve around the centralization / de-centralisation question any more. Rather the focus is on finding the optimal balance between standardisation and diversity. Ghoshal & Mintzberg (1994:pp.14–16) coin the term: “Horizontal Trade-Off” when discussing the optimal balance between “Autonomy” and “Synergy”. Incidentally, and in a similar manner, Frankemölle & Sürig (2004:p.450) claim that finding the optimal balance between individuality and conformity remains a key challenge for the tourism sector
Changing or adapting codes used by a number of interconnected systems, operated by a significant amount of people is a task not to be underestimated. Through time, may users have internalised the codes. Three letter codes (airport codes — e.g. HAJ for Hanover, RHO for Rhodes) have been widely accepted and used. Indeed for those long employed in the tourism industry it would be difficult to imagine working without those codes. It may be no coincidence that a large proportion of TUI Germany projects are three-letter abbreviations (e.g. DDB, GCS, HBI)
Cook (1996:p.39) claims that the resulting interoperability (from standardisation) could in turn lead to significantly larger customer choice in the medium-or long-term
If for example, the differentiating characteristic “Smoking / No smoking room” would be eliminated within the standardisation effort, this would mean that it would not be possible to purchase smoking / no smoking rooms in a separate allotment (i.e. inventory). In effect, this would render the tour operator / travel agency unable to respond to, and guarantee, a customer’s demand for a non-smoking room (since in the booking engine the rooms / allotments are not separated in terms of the smoking / no smoking characteristic)
A distinction is made here between the possibly intended integration visualisation and its perception in the organisation, based on the nature of integration rules and the clarity by which they are communicated
Appendix C: SR5009. The so-called integration manual addressed and challenged this tradition, advocating the need for a single responsible project manager
Appendix C: SR6015. It is assumed that the publication and internal distribution of an image brochure for the IT division at TUI was aimed at bridging this conflict
Assuming that there is really such a thing as the ‘finalisation of integration’. Seen as a learning process and as a continuous improvement of cooperation for achieving common goals, it is difficult to locate a ‘cut off’ point for integration
Another term frequently used for this role (interface between business and IT) is: System Analyst. The difference between the two terms is within the context of this paper a matter of mere semantics
This is based on the observations of the author / researcher, through participation in departmental meeting of the process organisation department
This information was acquired through an informal discussion with a senior manager in TUI UK
In TUI Germany, the process organisation department is divided into sub-departments, each specialising in different legacy systems
As side-note here, Oakes (2002) refers to a Gardner Group study revealing than businesses spend approx. 35% of their maintenance budget on integration links between applications. The high cost of maintaining interfaces between applications (while hinting at complex and maintenance-hungry landscapes) in other business sectors illustrates that the issues mentioned, transcend the scope of the case study. Moreover, despite pressures to reduce IT costs, businesses continue to spend in the areas of systems integration and consolidation [Delaney (2002)]
Poppe (2003) — Apart from focusing on integration and its benefits, Thomas Cook plans organisational changes, especially in the area of IT
Scharrer(ed.)(2000)
Scharrer(ed.)(2001)
Also OPUS (of Fritidsresor — Scandinavian Tour Operator belonging to Thomson Travel Group) was considered in this context
The reason being to update local inventories after an exchange had taken place (i.e. when a particular bed has been ‘given’ to a particular market it cannot, and should not, be available in its market of origin). If this were to happen, the same room could end up being sold to two different clients. An interesting question: If both companies would use one reservation system / inventory, instead of two different ones, would such an exchange platform be necessary? In other words, would an exchange be necessary if everyone could access one bed inventory and have the ability to sell it? This points back to the CTS project that did not materialise
Branding in this context would mean taking the fact “100 meters from the beach” and transforming it to “a short walk to the beach”. Similarly, photographs are often adjusted as part of the branding process. Within TUI Germany for example, the famous “TUI Clouds” would be added to every photo
A “merger of equals” accentuates the risks and problems mentioned. In the situation where a large company integrates a smaller one, it is likely that the systems of the large partner are going to be adopted, either because the smaller one has none or because the large partner’s systems are more likely to deal with the requirements of a larger organisation. Moreover, the degree of acceptance on the part of the smaller company is likely to be higher
And hence the distribution of investment costs — For more details, refer to section 5.3.4 / Figure 5c
Unless the new system is perceived as highly superior to the out-of-date proprietary one
This is supported by the fact that those two approaches are always paired in the context of the TUI case study (see GCS & DDB Image Management System)
See Integration Rule No.2: “Daily Business Has Priority” — Section 5.3.1.2 in previous chapter
The publication of holiday brochures can be seen as the end of a production cycle. The publication deadlines, determine the respective planning and purchasing cycles. TUI UK (and British tour operators in general) produces a smaller variety of brochures in comparison to TUI Germany (and German tour operators in general), but compensates by publishing more editions of the same brochures. TUI Germany has mainly two large production cycles: Summer and Winter, whereas TUI UK is characterised by smaller albeit more frequent production throughout the year
Appendix C:SR 7008 — The sponsor board meeting minutes (07.02.2003) are to a large extent preoccupied with the need for “highly-skilled” resources at the programme level. In Rudzio (2003), Frenzel (TUI CEO), mentions that Preussag has brought discipline and controlling into the customer-oriented, medium-size-oriented mentality of tourism professionals. Moreover, similar considerations are present to other tourism groups as well [take for example Thomas Cook — Friedmann (2003)]
In line with Williamson’s (1996:p.379), transaction costs, in this instance, refers to the costs associated with drafting, negotiating, agreeing on, and monitoring the implementation of the contractual relationship
Refer to section 6.2.2.2
Even though highly relevant to the chosen dissertation topic, it is not necessary to examine this issue in a great deal of detail. The focus here is limited on the importance of technical infrastructure for ICS integration (and not on technical infrastructure per se)
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Papathanassis, A. (2004). ICS integration potential in the world of TUI. In: Post-Merger Integration and the Management of Information and Communication Systems. Strategie, Marketing und Informationsmanagement. Deutscher Universitätsverlag. https://doi.org/10.1007/978-3-322-81879-9_6
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