Flight Centre banks savings

Key Business Insights:

Building flexibility into project plans allows them to be varied if circumstances change, as occurred during Flight Centre's communications revamp. By planning a progressive rollout of new systems, it is able to get first-phase benefits while postponing further capital expenditure until economic conditions improve.

Flight Centre has carved significant cost from its phone bill alone by availing itself of a cheaper calling plan.

In projects involving multiple suppliers, the chances of success are enhanced by employing a multi-skilled project manager responsible for resolving supplier issues.

Key Innovation

A major communications revamp has slashed 34 percent from Flight Centre's phone and data bill.

Flight Centre New Zealand in Brief

• 850 travel consultants out of total New Zealand staff of 1000
  
• Is part of a global group with stores in nine countries
  
• Group's 2007 revenue was A$1.15 billion and after-tax-profit A$120.8 million

It's a rare infrastructure project that goes completely according to plan. But when a project strays from its original course yet delivers bigger than expected benefits, few people are going to quibble with how they were achieved.

That is what has happened at the New Zealand operations of Flight Centre, part of the A$1 billion Brisbane-based travel agency.

Last year the company set out on a major communications revamp with a goal of consolidating systems to achieve cost savings. Six months on, and with the scope of the project reduced in line with the changed economic conditions, the business is looking at a 34 percent reduction in its annual phone and data bill.

That's a pleasing result in anyone's book, even if parts of the project have been put on indefinite hold. For Flight Centre CIO Simon Conroy, it's a great reward for what has been a relatively complex project.

The complexity comes from the involvement of several suppliers, and the need to tailor products to fit Flight Centre's special way of operating.

The travel retailer has 140 stores, an Auckland head office and central offices in Wellington and Christchurch. The Vincent St head office in Auckland's CBD has about 250 staff who moved to that location late last year from two other offices in the city.

Flight Centre took the opportunity of the head office relocation to do a communications makeover, involving Vodafone and IBM as providers of a one-ICT solution, and Cisco and Zeacom hardware and software platforms.

IBM® performed the key role of supplying and installing Cisco's CallManager system, training Flight Centre staff and overseeing the project. Vodafone provides the business's voice and data services and Zeacom supplies the call centre platform that is the foundation of Flight Centre's business.

"I guess one of my biggest fears going into it was that with so many people involved it would be easy for vendors to point the finger at each other when things didn't go so well," Conroy says.

From the outset he decided he wanted to be dealing with a single point of contact and responsibility to insulate him from day to day issues. Based on its track record with Cisco implementations, IBM's Technology Services took on that task, ensuring that Vodafone provisioned the necessary phone lines, that Zeacom's call centre software was successfully installed on the Cisco hardware, and taking care of system programming and configuration.

"IBM had a project manager dedicated to and it was their duty to make sure all the different parties were doing their bit."

It all went comparatively smoothly, the hard part being mapping Flight Centre's business needs on to the communications setup.

"The scoping, and the technical deployment, were really successful. Probably the biggest challenge was trying to relate the business requirements into how the Cisco and Zeacom platform would work."

Zeacom is geared to team-based call centres whereas Flight Centre relies on queuing calls for particular individuals. Having worked around that problem, the platform is providing big benefits.

A key benefit is its ability to generate call reports, Conroy says, which will make it easier for the travel retailer to administer the service level agreements requested by a growing number of corporate clients.

"They expect the phone to be answered within so many rings and to be on hold for no more than a certain time. So being able to actually sign up to a service level agreement that we can report on and deliver on is quite a big win for us."

The cost savings from the system are even greater than envisaged, and come about despite a major deviation from the original project plan. It had been intended to combine the business's voice and data traffic on a single network to eliminate toll charges.

Instead, the networks remain separate, avoiding a significant outlay on new hardware. Call costs, meanwhile, have been cut by signing up to Vodafone's Integrated talkZone calling plan. That's allowed Flight Centre to retire two costly 0800 numbers previously used by branches when calling head office.

"That wasn't actually part of the original Vodafone tender. It has just evolved as part of the relationship, so is a really good win," Conroy says.

The other variation from the project plan is to put off rolling out CallManager and Zeacom to Flight Centre's branches as the savings to date are significant enough for now.

Much better, at this stage, to bank the savings already made.

Key Benefits

Flight Centre's original goal of consolidating its telecommunications to achieve dramatic savings has turned into a 34 percent annual cost reduction.

The new platform allows the generation of call reports, making it easier for the company to respond to the service requirements of corporate clients.

A new calling plan means free calls from branches to head office.

The progressive rollout of the new systems has given Flight Centre first-phase benefits with scalability to enable further improvements in the future.

"One of my biggest fears … was that with so many people involved it would be easy for vendors to point the finger at each other when things didn't go so well."

Simon Conroy, Flight Centre CIO