France Vacances Project Planning - Case Study Example

BUSINESS CASE INTRODUCTION France Vacances (FV) is a fictional travel agency specializing in the rental of high quality accommodation in France. They have a wide variety of holiday cottages, apartments and chalets at various holiday resorts. They have offices on high streets in many cities and have a good reputation. They already have a huge customer database and a booking system. Currently, they provide their sales/services through the branch offices or via the phone/post but now they wish to have a presence on the WWW. They have decided to implement a new internet-based booking system. They have done appropriate research and are convinced that, through this additional channel, they will be able to increase the revenue considerably. BACKGROUND Globally, tourism has become one of the most important industry with international arrivals expected to reach 1.6 billion by year 2020 and the expenditure on tourism is expected to hit US$ 2 trillion mark. (WTO 1998) The tour and travel industry or the hospitality industry includes tour operators, airlines, car rental agencies, and hotels and accommodation, online and offline travel agencies and other companies etc. Based on the information by World Travel & Tourism Council (WTTC ) this industry is very interestingly poised and ready for the phenomenal growth in the coming years. The increased interest n tourism has been fuelled by many factors such as growth in world economy and developing countries allowing the people of these countries to spend their growing incomes on leisure and travel. Moreover, the airline prices are dropping due to competition and destinations are vying with each other to offer maximum discounts and sops to customers to boost their revenues. Another important factor has been the rapid changes in technology especially the onset of internet revolution. The world wide web has changed the way people traditionally looked and bought goods and services and the travel industry has also been irrevocable changed by this phenomena. Thus, though the overall scenario is very bright, the ever demanding and changing customer preferences have brought the travel industry under pressure. With many small companies coming up as niche or mass market operators, the competition has increased tremendously and thus the travel agents and agencies are trying hard to differentiate themselves and their services by finding innovative ways to retain their competitive advantage. The margins have shrunk and customers are unwilling to be loyal to one agency or operator and go for the best deal being offered. Thus to do business, companies must find ways to maximize their revenues and simultaneously reduce costs and kep the quality of the services high. The technology has come to the rescue once again. The new innovations technology are opening up new opportunities for the travel companies to grab and increase their market share. Thus the onset of internet has revolutionized the way travel is purchased. Now a days, lots of information is available on internet and thus travelers or customers prefer to search internet and learn about destinations before making any decision regarding purchase. Since it is very convenient to compare prices, look for alternative options and even book ver internet, customers are increasing using this medium over the traditional modes. Even if they do not book through internet, they still use the net for researching various options and making their decisions. And it can be used anywhere from an office, home, café , while traveling through laptops etc. – and is thus very easily accessible. Moreover, it allows customers to by-pass a travel agent and book online directly, thereby providing with him with the cost benefits. Thus the need of the hour is to go for websites and portals for travel and accommodation bookings by the travel agencies, companies and agents. PROJECT SCOPE Based on the above discussion, we can see how important it is for France Vacances (FV) to have their own website offering information and online booking system for their accommodation services. Their business will definitely benefit from this endeavor as it has been seen that these days most of the customers prefer to use web for planning and booking their holidays. Moreover, most of the important and big names in the industry already have their own websites and are offering an online booking services through their websites. Let us consider some research facts taken from various internet sources. As per Blueprint travelers, in 2006 alone, unique visitors to online sites increased by 13% in a single month. This contributed tremendously to the growth of travel web sites and they increased by 25% in 2006. And 40% of all travel online bookings in 2006 were online bookings made through websites. They also found out that a whopping 54% of online travel shoppers begin their travel research with an online travel agency. Obviously, this has led to the decline in usage of traditional methods of travel selling and marketing and consumer demand has considerably declined for the traditional offices, brochures and other stuff (About 71% of online users have stopped using traditional agents for holiday bookings) This is thus causing travel and hospitality agents to shift to internet marketing and this trend is expected to rise further. Again based on the research and hits received by the websites, it was found that consumers buy airline tickets (84%) , overnight lodging (78%); rental cars (59%); tickets for museum, festival, sports event, etc. (33%); tickets for amusement park (18%); travel package (17%) etc. through internet. Thus FV needs to move to the internet platform as soon as possible to regain its competitive advantage in the market. As a member of the consultancy firm Smart Design, we will be first analyzing the requirements and produce the requirements specification and then go for designing, development and implementation of an appropriate internet system including a new website. REQUIREMENTS Let us look at the major requirements of the FV company. As a travel company, it needs an integrated business system which should involve all aspects of its functioning or operations such as planning, distribution, selling, operating and servicing the specific needs of the customers. A well connected business system should be able to make the operations simpler and fast and should be easily accessible by their customers. Thus they need a website which should provide information regarding their accommodation at different places to the user. It should also have an online booking system which should allow users to book the rooms online. For this they need to show to the user the availability of the rooms, their pricing, their qualities and types and their location. Thus the online system will need to connect to a database at the backend where all this information should be stored and should be easily retrievable as and when required. Moreover, to provide real time booking, the bookings done through phone /post or other traditional methods should also be reflected in the database and for this the travel agencies will need to have people update the database manually. Another issue will be to connect all the offices so that there is one centralized database which will store all the information from all the locations. This will require system servers and other hardware and connectivity from all locations. Thus an online booking system should allow for making a room booking , changes or cancellation at any of the different locations in France. The system will also need to have a customizable user-interface for individual customers or corporate customers which will provide information regarding availability, rates and types of rooms. It should also have a search engine at the backend to facilitate map-based search features. The customers should also be able to get information on various schemes , discounts and special offers at different locations in real-time. The Website should also allow for instant chatting with the customer care executive if desired by the customer for any clarification. The main challenges to this integrated solution are: 1. Managing distribution costs : It has been seen that the Internet helps to reduce distribution costs from $30 per room to less than $1. When the system is in place, the real time bookings should help the FV to manage its distribution costs. 2. Managing the new hardware and software solution and training people and its workers to use it effectively. Actually the database management is the key area. If the company is able to manage its records well, it should be able to use the system effectively. 3. Retaining customers : The FV company should be able to establish a continuing dialogue with its customers - before the purchase (by sending email notifications n new offers or discount offers), during the stay and after they return home. They should utilize the internet technology to maintain contact with their customers and keep them informed. 4. The important factor will be integrate the online presence with the existing channels of distribution and information. The other traditional methods should not be overlooked and the idea is to add new market share without giving away the previous one. 5. Customer Analysis should be easily manageable now with lots of customer data available through databases. This will help FV to analyze customer preferences and provide customer solutions to them. This is especially useful when you are dealing with corporate clients ot clients who are frequent travelers. SOLUTION The solution we have in mind will be platform independent, highly flexible with robust architecture. It should be model based such that it ca be deployed and changed without changing other areas. The solution needs to be such that it reduces the maintenance cost and should not be very user dependent. For this purposes, we propose that the development of the new system should be on J2EE Technology with Linux, JBoss and SQL server as the development environment. The modules will be built in n-tier architecture with communication through XML messages. Thus the individual modules can be developed independently and changed or revised without causing harm to overall structure. The developed modules will be delivered with proper user manuals and documentation to reduce maintenance cost and cut down time on time required for enhancements. Thus we will follow the following procedure as shown in figure below. Thus the requirements have been analyzed and the website will allow a customer to search for good accommodation and book it online at the click of a mouse. This will be the front end of the online booking system whish will transfer this data to the database that will store all the booking information and will update the availability status. In the Design stage, there will be business process documentations, module definitions, system architecture, and GUI design. Then the actual development will start with the prototypes, coding and testing stages. Finally, the whole system will undergo quality test. PROJECT PLANNING : The Project Planning techniques are the part of project management concept which includes control and monitoring in addition to risk management and planning. These are all the part of CMMI -- Capability Maturity Model® Integration (CMMI) which is an approach of process improvement that helps organizations to identify and define the essential elements of an effective process. (Centre for technology, 1998) Before going for network diagrams, we must identify the key activities using a WBS. A Work breakdown structure is the tree structure of project planning that establishes the actual work elements and the activities that make up that project. It is basically a summary of all project activities that need to be undertaken to finish it. A WBS shows the relationship between all elements of a project. And this can then be used to provide very good estimates for cost and schedule control. (Booz, Allen, Hamilton, 2003) It has been agreed to carry out around 21 tasks for this project. The duration of each task, and their interdependencies, has also been agreed. The work has been costed at a rate of £800 per day for SD consultants. The whole system hould be up and running within a period of 12 weeks. Since, no work is carried out on weekends, the maximum number of days available is 60. Refer to the following activities to be carried out: Task number (no of days) task/deliverable pre-requisite Activity 1 1 - Activity 2 2 1 Activity 3 - - Activity 4 5 17 Activity 5 10 4 Activity 6 15 5 Activity 7 5 5 Activity 8 39 6 Activity 9 10 6 Activity 10 10 6 Activity 11 24 6 Activity 12 12 7 Activity 13 6 9,10,11,12 Activity 14 6 8,9 Activity 15 4 13 Activity 16 3 14,21 Activity 17 2 2 Activity 18 - - Activity 19 - - Activity 20 4 6 Activity 21 4 15,20 Tasks 3, 18 and 19 are management activities spanning the entire project. When drawing diagrams or costing for work, these activities can be ignored. Assume that only one person is assigned to each task. As seen from above, the total days are coming out to be 162 which is too many more than the required 60 days. The Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are the two major techniques for monitoring and controlling the performance of a large project. (Lindo systems, 2003) Identifying the set of activities that must be performed in a way that the project finishes in lowest possible time is the Critical path method. This is done by using Nodes where nodes represent the activity in the network. The relationship between two nodes or activities is shown by the link between the two nodes. Two conventions are used in practice for displaying project networks: Activity-on-Arc (AOA) and Activity-on-Node (AON). We will be using the second method here.  The diagram shows the interdependencies of each node. Total number of days based on above data is 162 and since charge is £ 800 per day, the total cost is £307200 Critical Path involves activities 1,2, 17,4, 5, 6, 8 and duration is 74 days. Now to reduce the number of days to 60, we need to crash some activities. The process of decreasing the duration of a project or activity is commonly called crashing. The formula for splitting the activities is as follows: • any activity to be split will be divided into no more than two sub-activities. • each sub activity will take approx 2/3 of the total time, rounding the final figure up or down as convenient. (As an example, if an activity takes 30 days and one person to complete then after splitting, each sub-activity will take 20 days each. If conducted in parallel, there will be a saving of 10 days but then labour cost will rise. Originally, 30 days would have meant 30 days wage for one person but now it is 40 days wage between two people). • assume that there is only one person allocated to each task or each sub-task. Thus when activities are split then although time is reduced, the cost goes up. Based on this we can crash activities 8 and 4 and thus double the wages there. Thus total duration will be 59 days and cost will be £318400 See figures below. We chose to split activities 8 because it was taking the maximum duration of 39 days. And by crashing this activity we reached the figure of 61 days. Moreover, it did not require many preceding activities as a prerequisite besides number 6. crashing other activities would not have served the purpose as the cost would have been quite higher. For example if we crash every other activity except 8, then also we get total duration to be 62 days which is greater than 60 and the cost would have increased considerably. Thus we see that only by crashing activity 8 above, we can get the duration within 60 days that is project can be completed within time. References Booz, Allen and Hamilton, 2003, Earned Value Management Tutorial Module 2: Work Breakdown Structure Center for Technology in Government, 1998. A Survey of System Development Process Models CTG.MFA – 003 LINDO Systems, 2003 Application Survey Paper, Project Planning with PERT/CPM World Tourism Organization (WTO) (1998) Tourism: 2020 Vision, Madrid: World Tourism Organization Read More