The pleasure of being so distracted

As we ride home on the bus, I am struck by how nice it was to be truly too busy to care about things you cannot control. The latest tweet from @realDonaldTrump, or the latest terrorist news, or the recent tragedies were all pushed out of my mind but the wonders of Slovenia, Croatia, and Venice. I need to maintain this disconnect as work and life pills on their demands.

Follow-up on IT Operations at Valamar Riviera d.d.

During our presentation at Valamar, I listed several questions that I thought would be interesting to have answered by the Valamar IT team. In this post, I restate the questions with a little more context and summarize the answers or insights we gained.

How is IT spending managed across properties?

Centralized IT is a common cost optimization strategy, but it is not always trivial to achieve successfully. In particular, the nature of centralization places a huge burden on the Wide Area Network, which must be fast, robust and redundant. Achieving this takes expertise and significant expense. From Valamar we learned that they do centralize the IT function. They provided us a lot of detailed information about their WAN, and the criticality of their relationship with HR Telecom. As the details of their enterprise architecture emerged through the presentation I hope that our team could appreciate just how obvious the economic advantage of central IT can be. Each system they described in their “Picasso” has to be licensed, scaled, maintained only once.

What processes are followed during an acquisition?

This topic was of interest to me, as I suspected there would be a chance to get some lessons learned from Valamar that I could apply to my own role at CommerceHub. Ultimately we did not address this directly, though we saw a few peeks behind the curtain.

1.     They use the offseason for investment activities in their properties. I suspect the IT merger of a new hotel would be very similar

2.     Critical components of their IT operation is dependent on industry standard platforms such as Opera. This increases the chance that they are migrating new employees to a system they are already familiar with. This reduces the switching cost for the in place team.

3.     Bookings are seasonal in nature. In a typical city hotel, you would struggle to find a cut over point from one system to another. In the case of Valamar, it is easy to imagine that this year's reservations are in the legacy system, and all of next years will be in a new system.  

Is IT a business driver, or a basic business need?

Every person working in IT hopes to be a business driver, an enabler of strategic goals. Based on my personal experience as a traveler, it is clear to me that IT is in that position in the US market, especially in the highly competitive city hotel market. I was interested to know if Croatia, Valamar, and the leisure tourism sector reflects this same observation.  I was very impressed by how critical IT investment has become to Valamar. They have adopted an ambitious “Digitalization Initiatives” strategy, which includes 30 critical initiatives in 2016/2017 alone. More details are available on the Valamar presentation available on BB (I am not sharing this on the public web).

What is the vendor landscape like?

Increasingly IT has become a major cost center for many businesses, while at the same time vendor consolidation, and solution customization has limited businesses abilities to maintain a strong buyer force. At Valamar it is clear that they suffer from this trend. Companies such as Opera are more important to Valamar, than Valamar will ever be to Opera. Additionally, Valamar has been mindful of this reality within their system architecture. Vlastimir Ivančić described their use of interfaces between systems, as a means to minimize the interdependencies within the overall system. Although this strategy may not turn the page on something like Opera, it is undoubtedly effective for dealing with smaller vendors and less critical components such as payment management.

The availability of more integral solutions was also mentioned. In my role at CommerceHub, this is what I foresee being the greatest source of cost savings for our teams. The glue to connect distinct systems can be just as burdensome as the systems themselves. As Vlastimir said, eliminating it is the “holy grail”, though it further weakens the buyer's force.

Does Valamar rely on outsourced IT?

Outsourced IT is like a swinging gate in most businesses. They go through a swing of pushing everything out followed by another swing to bring everything back. Successful outsourcing companies avoid this yo-yo effect. I expected that Valamar would require some outsourced IT and was interested to know how successful they had been. I believe the strategy they have is a very good one. They avoid outsourcing their innovation. The small team at Valamar spends their efforts on Proofs of Concept and uses outsourcers to deliver a production-ready implementation. This allows Valamar to quickly innovate, and potentially get multiple bids to complete a project. While the project is being fully built, they immediately have a chance to move onto the next innovation POC. This is a strategy that I call, “just enough design”.

Summary

Valamar impressed me. They have a small team, dealing with a massive amount of complexity, and delivering innovation at exceptional pace. The company has a clear vision, with a balance of knowing who they are, while dreaming big about who they will become.

Luxury, artisanal, and artistic business dynamics

During two of our visits, we encountered products that seemed to challenge our industrialist's vision of how a company can be a success. The two visits were the mask making and the glass making. Neither of these companies was interested in improving efficiency, increasing output, or reducing costs in any way. It is something that I will continue to think about in the weeks ahead. How does a company like a Murano glass manufacturer grow, when they must not change their product? How can you drive up the desirability or your product, increase exclusivity, and generate more revenue?

Comments welcome.

Security Screening at Venice Airport

WOW – Venice airport is the ONLY airport that I think has figured out how to do security screening at the scale that modern society needs. I am so impressed. The airport handles about 30 million visitors per year, with an average daily passenger load of about 100,000 and what we saw today it that all of those passengers squeeze through a single, highly efficient, screening station. The two biggest improvements I saw was the automation of the boarding pass validation and the forbidding of queueing at any particular x-ray screening station. The automated boarding card validation stations allowed the single serpentine line to fan out to handle 4 persons concurrently. The avoidance of queueing directly behind an x-ray station meant that no passengers suffered that dreadful scenario when they get stuck behind the world's slowest traveler (who I seem to be following to airport to airport all around AmericaJ)

There as about 4 other minor improvements that I saw but I will save the reader from the details. Well done VCE!

Now, about that luggage...