e-business W@tch European Commission, DG Enterprise & Industry E-mail: entr-innov-ict-ebiz@cec.eu.int, info@ebusiness-watch.org This document is based on sector studies, special reports or other publications and resources prepared by e-business W@tch. The European Commission, Enterprise & Industry Directorate General, launched e-business W@tch in late 2001 to monitor the growing maturity of electronic business across different sectors of the economy in the enlarged European Union, EEA and Accession countries. All publications are available in full length on the internet at the e-business W@tch website (www.ebusiness-watch.org). CASE STUDY: SKISTAR CRM FOR FOUR SKIING DESTINATIONS BY MEANS OF ICT, SWEDEN / NORWAY Abstract SkiStar is a company specialising in skiing tourism. It operates five skiing destinations in Sweden and Norway. SkiStar s market share in the Scandinavian market is 33%. In recent years, SkiStar has expanded by acquisition of other skiing destinations. This lead to a situation where the IT systems of the different destinations were not interlinked. The current IT project at SkiStar aims at interlinking the different destinations in order to become one integrated organisation. This is primarily done by creating a common electronic customer database. The consolidation of the different IT systems of the individual destinations has led to considerable savings. Costs for maintenance and the management of bookings have decreased drastically. Case Characteristics Full name of the company Location Sector Year of foundation 1964 SkiStar AB Headquarter is in Sälen, Sweden. SkiStar runs skiing destinations in Sälen, Åre, Vemdalen, in Sweden, and Hemsedal in Norway. SkiStar has recently acquired Trysil, a Norwegian skiing destination. Winter tourism No. of employees 875 (year 2003) Turnover in last financial year Primary customers Most significant market URL of company E-Business Focus Customer Relationship Management ERP SEK 990 million (approximately 99 million) net turnover in year 2003 Tourists from Sweden and Norway, but also from other countries. National www.skistar.com = in implementation stage; = used in day-to-day business; = critical business function 1 September 2005
1 Background and objectives SkiStar is a company comprising five skiing destinations both in Sweden Sälen, Vemdalen and Åre and in Norway Hemsedal and Trysil. The head-quarter is situated in Sälen, Sweden. The core of the business activity is the operation of lifts and pistes for alpine skiing. Other strategically important business activities are accommodation, courses in skiing and letting of skis. SkiStar s different skiing destinations have different profiles targeting different customer groups. In spring 2005, SkiStar acquired the skiing destination of Trysil in Norway in order to broaden its range of skiing activities. 1 The vision and objective of the company s business activities is to be the leading company for alpine skiing in Europe. This is to be realised through the establishment of a comprehensive view on destination management, i.e. to take responsibility for a service provision where all parts of the skiing experience are satisfactory to all customers. The most important market is Sweden followed by Norway and other Scandinavian countries. The company owns and runs skiing destinations that constitute about 50% of the Swedish market share and 13% of the Norwegian market share, which together makes up about 33% of the total Scandinavian market share. Main driving forces The main driving force of SkiStar was to consolidate its four skiing destinations into one organisation in term of IT-systems, booking procedures and marketing. Before the project started, SkiStar s skiing destinations had one system each and worked as independent organisations from the technological point of view. SkiStar claims that the importance IT in the tourism sector is increasing. The reasons for this are twofold: More customers want to book their skiing trips online. Therefore, in order to stay competitive it is important to have well functioning web pages targeted at different groups of customers. In order to be able to get a comprehensive view on the customers, it is important to have a well functioning customer database in order to survey the customers, enabling improved marketing. 2 E-Business activity The current IT-project aims at consolidating the different skiing destinations of SkiStar into one integrated organisation, both in terms of company organisation and in terms of IT-systems. Thus, the IT development is an integral part of the company s organisational changes. The first part of the development was to consolidate the four destinations systems and the second part will be to make a better CRM solution. The latter development of the IT system is still in progress. Consolidation through my page The development of the new IT system of SkiStar started about two years ago as SkiStar had grown strongly and therefore the company needed new IT solutions. Before the project started, SkiStar had one system for each part of the organisation, i.e. the different skiing destinations had their own systems and were not interlinked with the other skiing destinations. This meant that one customer could have four customer IDs one at each destination if the customer had been skiing at all four destinations. 1 Trysil was presented as a case study in the previous e-business Sector Study on Tourism, August 2004. www.ebusiness-watch.org ( resources ) September 2005 2
As a consequence, customers got several advertising brochures one from each destination. Furthermore, there was no integrated booking system, which meant that a customer had to call all the destinations in order to compare prices or obtain other information. Therefore, SkiStar started with consolidating the different systems into one system. This was made by creating one ID for each customer, independent of which skiing destination within SkiStar this customer had visited. Then, a common customer database based on the new customer IDs was created. This was made by creating my page, a web interface that is accessible both for SkiStar and for the customer. At my page all bookings the customer has made are available. Bookings of skiing vacations made on the internet by the customer are immediately added to my page. If a customer prefers booking by phone, the SkiStar call centre adds the information to the page via the customer ID. Apart from home address and name of the customer, the information comprised is the following: at which skiing destination the customer has been, what accommodation the customer has had, if the customer has taken skiing classes and which ones, and ski rentals. Security issues SkiStar thinks that security issues always have to be put in relation to the requirements for flexibility. Normally, the more secure a system is, the less flexible it becomes. Each customer can access his/her my page with a password of his/her own choice and the customer ID. SkiStar means that this level of security is sufficient since there are no economic values for the customer at stake at the page. If someone used someone else s page to book a skiing vacation, the owner of the page would get the trip since the booking confirmation is sent to the addressee of my page. Resource planning SkiStar has a system for analysis connected to the booking system, i.e. once every 24 hours the booking data from the customer database is transferred to the system for analysis. This enables SkiStar to check the running order intake and compare it to previous years, customer groups etc. Since the demand for skiing activities is fluctuating strongly, it is important for SkiStar to be able to detect when the demand is at peak in order to adjust prices and the number of staff according to demand. The system for data analysis has been in operation for one year and is common for all destinations within SkiStar. Requirements for consolidation The development of the IT system is a part of the transformation of SkiStar s organisation aiming at integrating the different destinations. One requirement for making the integrated IT system work is that the rest of the organisation is also interlinked. Before the integration, each skiing destination had its own call centre that could only access its own data. Consolidating the IT systems also brought with it a consolidation of the call centres that now can access data on e.g. accommodations from all of SkiStar s destinations. This also brought with it an integration of the telephone systems, i.e. there is only one telephone number to SkiStar today and not one number for each destination. Thus, the call centres became interlinked. Today, they are working as one unit. Taking the next step towards CRM There is no CRM system in use at SkiStar today. However, it is the aim of the company to implement a CRM system in the near future. SkiStar states that the consolidation 3 September 2005
work described above is in many ways a preparatory work for the introduction of an efficient CRM solution. The next step in this preparatory work will be to map the customers behaviour in terms of destinations and accommodations etc. in order to detect customer patterns. The process for mapping customer behaviour started in spring 2005. When this is done, a CRM system can rather easily be linked to the existing IT system. SkiStar estimates that it will take at least three years before the company has a fully developed CRM system running. 3 Impacts and lessons learned Lower costs through integration The integration of the four destinations has a positive impact on the competitiveness of SkiStar. This is due to the fact that the investment for introducing the common IT system was rather modest and the cost savings enabled by this universal technological infrastructure have been considerable. In fact, the strongest business impact of the new IT system is the cost savings. Since hitherto each destination had its own organisation and data system, the costs of maintenance and the running expenses of the systems were a lot higher than today when there is only one system. The call centre underwent a similar transformation, from four units to one. Today it is possible to optimise the call centre in ways that were not possible before. For example, if one destination had a heavier work load during some period due to a sudden increase in demand that destination needed to bring in more staff. As the call centre is one unit today, the staff from other destinations can back up the workforce of one destination when needed. Thus, it is easier to optimise the number of personnel. As a consequence, the average costs per telephone call have decreased. Marketing has also been integrated, thus leading to a further reduction of costs for SkiStar since all individual destinations have a common marketing today. The costs of maintenance and call centres have nearly been reduced by 75%. Increase in sales The increase in sales has been strong during the last year. This is partly due to the new integrated organisation and IT system. Firstly, the integration means that customers get better and more efficient service, since all the services of SkiStar are gathered within one coherent organisation. Secondly, due to the more efficient organisation of the call centres and the common IT system, SkiStar can deal with more customers in less time than before. Personnel is more important than technology SkiStar points out that the technology needed to consolidate the IT system and create one common telephone system was rather easily put up. The most difficult part in this kind of transformation is not the technology itself but the involvement of the personnel since all big changes bring with them some worries among the staff. Therefore, a transparent information policy is one of the most important factors for success. It is extremely important that the staff is a part of the transition and all employees feel that they can participate in the changes. A great data system without support from the personnel will not work properly. Therefore, SkiStar points out that it is very important to work with soft measures, e.g. through staff questionnaires. September 2005 4
4 References and acknowledgements This case study was conducted by Intersecta AB, Smedsgränd 2B, S-753 20 Uppsala, Sweden, on behalf of the e-business W@tch. References: Interview with Jocke Wahlsten, IT-manager at SkiStar, on June 30 th, 2005. www.skistar.com Contact For further information about this topic or about the e-business W@tch, please contact: e-business W@tch c/o empirica GmbH Oxfordstr. 2, DE-53111 Bonn Germany Fax: (49-228) 98530-12 info@ebusiness-watch.org European Commission Enterprise & Industry Directorate-General Unit D4 'Technology for Innovation / ICT Industries and e-business' Fax: (32-2) 2967019 entr-innov-ict-ebiz@cec.eu.int 5 September 2005