Thomson merger saves £150m

Thomson merger saves £150m

Streamlining IT prompts big savings as holiday firms unite

Travel group Tui will save £150m following last year’s merger of Thomson Holidays with rival First Choice, with a significant proportion coming from streamlining IT operations.

Plans include upgrading communications, consolidating server infrastructure and moving application development offshore.

Server numbers have already been cut from 271 to 27, largely by using virtualisation technology, said Keith Newman, head of IT for the global Tui group, which owns Thomson Holidays.

“We are looking to reduce our IT spend by 20 per cent,” Newman told Computing.
“We started the server consolidation project in November and aim to complete it by October.”

Datacentre operations are still spread across four of the newlymerged firm’s branches. But a central facility in Hanover, Germany, is planned for the future.

Merging the group’s applications is forecast for completion by April. The programme includes the introduction of a unified revenue management system, supplied by JDA Solutions, and reservations software.

Part of the rationale behind the merger was to build up internet sales, according to Tui. But both the Thomson and First Choice web sites have consistently ranked low in independent studies of user-friendliness.

The upgraded Thomson site, due for launch in April, includes search engine optimisation to mix and match holiday options, and a greater focus on user-generated content.

“We addressed usability issues by considerably increasing our online spend and focusing on consumer feedback,” said Newman.

Technology infrastructure consolidation was a major issue when market research firms Ipsos and Mori merged in 2005.

Two crucial factors for joining up IT operations are detailed planning and quick decision-making, said Ipsos Mori head of infrastructure Scott Phillips.

“Focusing on the essentials first is mandatory,” he said. “Integrating quickly and seamlessly should be the priority.”

Security also has to be a major concern for any transaction-heavy business, said Martin Atherton, analyst at Freeform Dynamics.

“Merging companies should ensure they make data safety a priority,” he said. “It is an opportunity to get it right and avoid a major embarrassment.”