CVC drives growth ambitions with new digital business strategy
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CVC drives growth ambitions with new digital business strategy

Angelica Mari — March 2019

The Brazilian travel conglomerate is pursuing a major technology transformation program to support its acquisition agenda and strengthen its omnichannel offerings.

With 2018 bookings of 13.3 billion reais ($3.4 billion), Brazil’s CVC Corp can lay claim to the accolade of the largest travel group in Latin America — and maybe even the Americas.

Its franchised and licensed travel stores are a fixture on the streets of almost every Brazilian city — demonstrating how most leisure, business, cruise and study travel in the region is still guided by agents rather than put together through self-service online bookings.

However, responding to an evolving market and the rise of digital disruptors such as Expedia and Booking.com, CVC has spent the past four years consolidating its leadership position through a series of major acquisitions of both online and physical travel businesses — six in Brazil and two in Argentina. This shopping spree has brought challenges of business and technology integration but has also created opportunities to move to an omnichannel model of customer engagement that spans in-store, web and apps.

To lead the technology program supporting that growth strategy, just over a year ago the company hired Jacques Varaschim, whose work at Globo.com, the online arm of Brazil’s TV channel Globo TV, is often referenced as a standout digital transformation case study.

“At Globo.com we had the opportunity to be pioneers, to experiment and use all kinds of cutting-edge tools and methodologies — agile development, cloud, Big Data — before most other businesses,” he outlines. “So with CVC, I saw the opportunity to bring in that kind of change-the-business culture, enabled by technology, while also building an infrastructure and architecture to support the business to be a key player in online travel,” he says.

“It's all about enabling the company to respond to market changes and demands, by creating and delivering products across all channels — and fast,” he adds.

“CVC’s

Varaschim joined a company that was already two years into a modernization of its core technology for its store network of 1,235 franchises and several of its online presences. “There was already an internal movement towards agile and a process of transformation underway. What I brought was direction to certain aspects of that, drawing on my earlier experience,” he says.
Building a new architecture

To enable CVC to take full advantage of technology innovations, the first objective for Varaschim was stabilizing the online operation — which had been suffering frequent periods of downtime. As a measure of his success there, CVC reported earlier this year that its online channel saw growth of 70% in 2018.

As well as such troubleshooting, he launched an initiative to simplify the technology architecture that underpins the business — and architecture that had comprised about 20 different large-scale systems, both acquired and existing, from Oracle, Microsoft and a myriad other vendors.

The new architecture aims to standardize the delivery of enterprise technology for key activities across different business units in the group, such as booking flights, hotels and car rentals, eliminating many siloed applications by using a services gateway that feeds the firm’s various channels.

“We are building a service model for all our products, so that they cater for any of the channels in an independent manner,” Varaschim says, adding that the new structure is also helpful in that it involves the business more in the technology decisions. “As part of the process we are defining who is responsible for building and managing the services and the channels," he adds.

Varaschim’s plan is to build all new services on cloud platforms to take advantage of the model’s innate scalability and flexibility. But he is also aware that not all of the current systems will make it to the cloud.

The aim is to modernize some of those applications, while gradually decommissioning around half of the legacy estate. This, says Varaschim, will reduce a lot of the complexity that results from the use of disparate sets of systems across business units and facilitate the easier integration of future acquired companies. CVC has stated that it has ambitions to expand into several other countries in Latin America.
Focus on analytics

Running alongside that cloud adoption and refresh of architecture, a priority for Varaschim is to enhance the use of data analytics to help drive sales conversions. This initiative is focused on marrying the intelligence gathered by travel agents in stores with online activities.

“Most customers coming into the stores have done some sort of online research beforehand. We have a lot of information from these stores but not too much [quality data] from online activity. So the idea is to match up those two worlds to obtain real insight,” he says.

To support that, in-store processes are being revised, as are online and mobile offerings, all with the aim of capturing more actionable information. According to Varaschim, the integration and processing of data in the cloud from such multiple sources will be vital to achieving the goal of enhanced customer visibility and sales conversion.

“With the huge quantities of data we generate, such as all the flight searches carried out daily, we feel we need a public cloud structure with managed services to help us extract the data and analyze it,” he says.

The company has created a new cloud-based data lake for sales information, with data exports coming in from sources every 5 minutes. Related to that, CVC has also experimented with machine learning technologies in areas such as customer credit.

As CVC progresses along its digital transformation journey, Varaschim believes a key challenge will be to get teams (both CVC and its agents) into a mind-set that accepts their evolving roles. This has already started with the creation of a cross-functional committee that discusses the transformation.

"The main point will be around getting people involved with the development of new technology-supported products and channels, and their understanding of the impact such initiatives will have on CVC’s success," he says.

“Restructuring a business involves new ways of doing things that take some time to mature. While we may be looking at something that will materialize in two or so years, there is always the need to deliver things that will drive results next week. That’s a challenge I have to think about every day.”

• Portrait photography: Emerson-Souza

First published March 2019
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