TUI keeps subsidiaries in check with SAP's Business ByDesign...
For global companies, running the IT of subsidiary businesses based hundreds of miles away is no mean feat.
The Accommodation and Destinations department of international travel group TUI Travel - whose brands include Thomson and First Choice - relies on 22 joint ventures across the globe, leaving its IT department with the challenge of how to manage the myriad systems spread between each office.
According to Greg Garrison, IT strategy director with TUI Travel, managing such a diverse infrastructure remotely carries financial, reputational, technical and organisational risks.
"We now have 20 different finance systems around the world, with multiple instances, so we have a tremendous landscape of IT and investment and complexity to maintain from the central office," he told the recent SAP Sapphire Now conference.
"I've got multiple demands in operations of 20 different finance systems in these JVs [joint ventures]. The difficulty was, from a governance standpoint, how do I manage demand from JVs? How do I set up SLAs with JVs and negotiate with my core IT department in Palma, Majorca? This was a big challenge. The bottom line is basically we left the JVs to do their own thing, but then that causes problems around investment case, consolidation and risk.
"For example, even though I've got a JV sitting in Sri Lanka or in Peru and they have another brand name, what happens if someone loses some credit cards - what's going to be on the front page of the FT? 'TUI loses credit cards'.
"I needed an element of control. I needed to deal with my investment case across all these businesses. I needed to consolidate. I needed better quality and to reduce risk, and also to satisfy their local requirements."
For TUI, the answer to the problem of its fractured infrastructure lay in the cloud, specifically SAP's on-demand ERP offering Business ByDesign.
"The cloud-based on-demand solution is perfect for us, giving us a two-tier solution: we've got the control, the robustness, the scalability from the home office, but we also have the flexibility, independence and adaptability within the field offices," said Garrison.
The first stage of the rollout will see Business ByDesign deployed to joint ventures in 20 different countries.
"The beauty is that we can give them a robust system and we can consolidate from the existing 20 different finance systems to one," he said.
"That gives us control, the ability to report and reduce the expenditure and do the consolidation, but still give them the independence they need in their home countries."
"The ByDesign solution gives me the ability to set up a standard solution across the globe, to accommodate a common data model and also common chartered accounts."
TUI is targeting a four-month rollout for the first ByDesign deployments, but plans to accelerate future implementations.
Deploying a standard cloud ERP system has also freed up staff from worrying about the technicalities of how to run or manage it locally, according to Garrison.
"People are in the travel business because they love travel, they are not in the travel business because they are IT or finance people," he said.