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A trying 12 months for Europe has proved a painful eye-opener for many nations, but with lessons learnt, 2011 promises to be better for all.

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Spencer Green
Chairman, GDS International

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24 May 2011

Supply and demand

By Lorna Davies

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C ustomers drive the cars, demand drives the business, but IT drives the logistics of Europcar – the European leader in car rentals – tells CIO Kurt Deli to Lorna Davies.

Don't hold your breath, but the ever-important tourism and travel industry may be on the up. Latest figures from the World Travel & Tourism Council (WTTC) show that globally, travel and tourism's gross domestic product is expected to have risen by two per cent by the end of 2010, compared with a forecast in January of a mere 0.5 per cent. However, the WTTC has urged caution, pointing out that this sudden growth spurt means that tourism GDP in 2011 will grow by only 2.7 percent, compared with 3.2 percent forecast in January. It has been a tough year for any industry trying to develop and integrate travel, tourism and technology into its business objectives, but renowned vehicle rental specialists Europcar is a company that has not only kept its head above water, but has even enjoyed some plain sailing during the storm.

Europcar, the European leader in passenger car and light utility vehicle rentals, serves business and leisure customers throughout Europe, Africa, the Middle East, Latin America and Asia-Pacific. In 2009 the company signed 9.5 million rental contracts and in September 2008 partnered with U.S. market leader Enterprise Holdings in a strategic commercial alliance to form the world's largest car rental network. This alliance, along with partnerships with easyJet, Accor and TUI, has presented Europcar with global opportunities.

The unmistakable bright green, white and yellow logo of Europcar is easily recognisable and customers are aware of its European and worldwide presence. What is perhaps less well known is the importance IT plays in helping to deliver Europcar's business objectives, such as the growing need for communication and high level of customer service and satisfaction. Kurt Deli, CIO at Europcar, explains the need to discuss strategies. "We are a company which is pretty decentralised. Basically, the strategy is discussed and decided by the group executive committee with input from our country managing directors," he says. "While strategy is decided at the group level, implementation is executed locally with a high degree of autonomy for country management to adapt to the local business environment."

The business strategies need to be executed locally due to the differentiation between each country, with regards to the market needs. "What we see is that certain business aspects that are relevant or important in one country at one time, may only become relevant in other countries a few years later. That's why -- although we have a general strategy -- its execution may depend on local business priorities," says Deli.

Employed by Europcar for eight years, Deli's role as CIO is multi-faceted. He emphasises how instrumental IT is in deploying a chosen strategy across the group, especially due to the volume of business transactions the company executes. Europcar has almost ten million rental contracts per year, with 200,000 vehicles in its fleet on any particular day. In light of this, all business processes need to be supported by appropriate IT solutions to reach their target efficiency and, as Deli explains, if a business process is not covered by an IT system, operations immediately become 'mission impossible'.

All systems go

The partnership between Europcar and Enterprise has created the world's largest car rental network, with more than 1.2 million vehicles in 13,000 locations around the world. Owned by the French investment company Eurazeo, Europcar also operates the National and Alamo brands in Europe, the Middle East and Africa. Deli welcomes this growth. "We are now a truly global company, and getting the right IT services at the right time in the right place and using the right technology is a constant challenge," he says. "I use three words to summarise it: Greenway, anytime, anywhere. Delivering to the challenge requires knowledge, high skills and dedication from all our staff and from our service providers."

The importance of a good IT system that is relevant to the business cannot be underestimated, and Deli is keen to talk about Greenway. Greenway is Europcar's specifically tailored proprietary system that covers all aspects of the company's operational business: from customer management, reservations and rental operations to billing and fleet management. "With Greenway, we have the best system in the industry for the territory we cover," boasts Deli. "It gives us a competitive advantage, and the objective now is to secure and expand this advantage even further. We are continuously looking for new ways to improve Greenway, to further enhance its support of the business."

The technology works hand-in-hand with the business, and if the IT system were to be underperforming, this would have an immediate, negative impact on Europcar's operations.  Deli explains that IT is key to business survival. "If the system is not there, then we don't take any reservations, we don't know where our cars are, and we have customers queuing in the rental stations. We have seen that our business only survives for a limited amount of time without our IT system. The system is core to our operations. It is also core to the development of new services and new products that we deliver to our customers, whether it's business or leisure customers."

These customers take precedence over other business components at Europcar and, with both leisure and corporate clients making use of the rental services, IT plays a key role. Deli states that IT and technology are vital to enable Europcar to innovate the customer experience, putting the company in a position to "create the unique value that customers notice - and that is making them come back to us and not to our competitors." He continues: "This is valid for both leisure and corporate customers, for whom seamless communications at the systems level is really crucial. Creating that unique value for the customer through the use of technology and IT is one of the important development priorities for the future."

WeDeliver, the UK home delivery service launched by Europcar in 2009, offers free delivery and collection within a two-hour time frame. Further enhancing the accessibility and convenience for customers, this service ensures Europcar pips its competitors to the post as most car rental companies have customer pick up from the rental location or a designated area. IT at Europcar must work diligently in order to keep up with these new innovations and the demands that come with them.

Rising to the challenge

It has been a challenging year for the industry and the travel and tourism sector will struggle to recover to pre-downturn demand levels and profitability until 2016, a recent industry report by World Travel Market discovered. According to the report, more than half in the industry (52 percent) believe the global downturn is one of the biggest issues facing the travel and tourism sector, and it will continue to be so for the next five years. In the face of the global economic crisis Europcar have streamlined across the board.

"The economic crisis has had a major impact on our business," says Deli. "Our operations have been streamlined and adapted to cater to lower demand for car rental services. We have less visibility on our future reservations portfolio, so there is a greater need for flexibility and responsiveness." Due to this reduction in demand, employment across Europe has been affected. The company has decided not to cut its investment in IT, however.  As Deli explains, "On the contrary, we have decided to further increase our IT investments. Of course, we have been asked to lower our costs, but these optimisations have been re-invested in project activities. By doing this, we have been preparing for the future, when the economy takes off again." By continuously looking to improve Greenway, Europcar ensures its IT system better supports the ever-changing business. "What we see year after year is that the resources to implement those changes are limited," says Deli. "So it's all about picking the right ideas at the right time, and transforming them efficiently into new IT capabilities."

In recent years, IT has played a significant role in the external growth of the company. "Our IT has shown that we are capable of taking on very ambitious challenges. Europcar is the market leader in Europe by far. We took over the EMEA operations of National and Alamo, and we have been busy with the integration of these acquisitions and a number of others in recent years," says Deli. The IT systems have grown and developed to cope with the change. Deli explains that new business processes have been introduced to allow for "organic growth in a new area."

As CIO of Europcar, Kurt Deli has to face these new, evolving developments and challenges on a daily basis. Communication is a key element in managing technology in a company as large as Europcar, especially in the current climate. Deli understands that this requires efficient and effective communications, not only in the upper echelons of the company, but throughout. "It's important at all layers of the company. The IT governance model that we introduced ensures that the right ideas are identified, qualified, and prioritised." Europcar have put in place dedicated business relationship managers whose mission is to ensure the company gets the best possible trade-off between business expectations and IT capabilities and resources.

Racing ahead

So what does the future hold for the development of Europcar's IT system and expanding technology? As the customer is the main focus for the company, the key will be creating new services to optimise the customer experience. Communication between the customer, the car and the company will be, Deli says, "the future of our industry." With the ever increasing traffic congestion in Europe's capitals and the environmental burden this creates, Europcar expects that alternative mobility solutions will significantly gain importance, and, "Europcar intends to be a leading player in this field" says Deli. These mobility solutions require extensive and innovative use of technology in order to facilitate the high level of communication Europcar wants. Deli suggests having cars interacting directly with customers and IT systems, to generate flexible mobility solutions that are adapted to the individual needs of each customer. "I think it's all about the triangle integrating our customers communicating directly with our cars and with our IT system, to generate new solutions satisfying the needs of our customers." Deli says, "I think that the communicating car will play a central role in the evolution of technology, or even the revolution of technology."

One way in which the company is tailoring its technology to customer needs is with its newly launched website. The revamped site is more user friendly, designed to further enhance the customer's reservation experience. Working with Fortune Cookie - Europcar's London-based e-commerce partner since 2008 - the company has developed a simplified three-step booking system integrating technological innovations, such as automatically adapting to customers' needs by memorising previous entries and displaying on the first page only the most frequently used elements. Customers can also now choose their car not only based on price or size, but also based on CO2 emissions.

Future clientele will seek out this energy-efficient approach, and Europcar is spearheading this movement within the industry. The company opened its first 'environmental agency' in Paris in 1999, and in 2008 it was the first company in Europe to have its 'Environmental Charter' - which formalises its commitments in favour of sustainable development - certified by Bureau Veritas. In 2010, Europcar won the World Travel Award for "World's Greenest Transport Solution" for the second time.  The company has a dedicated eco-friendly section of its website, further pursuing its green initiatives by giving maximum visibility to its eco-friendly cars and so encouraging consumers to choose a greener car when making reservations. The eco-friendly fleet of cars includes vehicles with CO2 emissions of less than 140g/km and models equipped with alternative engines (hybrid or electric) or that are compatible with biofuels, bioethanol and natural gas.

Europcar is furthering its environmental approach and is currently gearing up for the international launch of Daimler's car2go in the spring of next year. A fleet of 300 two-seater Smart cars is due to hit the streets of central Hamburg by March 2011. The new mobility concept will allow those who have joined the scheme to simply turn up, get into one of the cars and drive off whenever and to wherever they choose. Recently premiered at the Motor Show in Paris, the new-generation Smarts incorporate innovative features such as a solar roof capable of charging the vehicle's battery, looking after the electrics and making sure the interior temperature is always controlled. There is also an advanced car-sharing telematics system.

Bigger picture

A report by the World Travel Market has shown that the booking of holidays on mobile phones and other new technologies will be the biggest consumer trend to impact on the travel and tourism industry in the future and Europcar intend to keep up. In autumn of 2009 they launched a new mobile phone reservation service for online booking from any web-enabled phone. This was the first of many developments to further Europcar's commitment to making car hire a simpler, more accessible and stress-free experience. This mobile experience is further enhanced with the Europcar app, available on both iPhone and iPad. The smooth ergonomics and clear presentation - showing added extras such as baby seats or GPS - make the reservation process faster and more dynamic. The company has also announced an application for Samsung Wave smartphones, offering a number of easy-to-use, practical features, including a location finder that finds the nearest Europcar branch worldwide and the 'tachometer', allowing Wave users to get their current driving speed by GPS, again adding to the user experience and Europcar mobile services.

Spreading its technology innovation internationally, the company announced deployment of a Microsoft "Surface" table with state-of-the-art, 30-inch, touch-screen technology at Terminal five at Heathrow airport, London in July 2010. Travelers to and from the UK can now experience the first touch screen of its kind for any car hire company, allowing consumers to plan their trip. The interactive table and unique software is designed specifically for Europcar customers, giving a virtual guide to their location, allowing them to draw routes using highly detailed maps provided by search engine Bing. Customers are able to zoom in on locations, flip between screens and mark out areas of interest. Itineraries can also be tailored to tastes, picking out castles and museums for history buffs, or a tour of vineyards for oenophiles, all of which can be added to the itinerary and sent to their smartphones, via Bluetooth or wireless, or simply printed off. These Surface tables are expected to appear across Europe in the coming months.

By ensuring discussion of each new idea or challenge is spread through to group level and tailoring execution of strategy to individual country needs, Europcar's technology can continue to develop. With a huge volume of vehicles to be covered by operations the company is constantly striving to improve its IT system, which can itself have an impact on the business. Clients continue to be the core priority despite overcoming obstacles during the economic crisis. With new solutions to improve the customer experience, an innovative environmental approach and continually evolving technology ideas, challenges can be overcome. And with a worldwide, ever-expanding market, Europcar is taking a holistic approach to its IT and technology innovations to gain ubiquity in the rental transport market. Its cornucopia of fresh, progressive ideas enable the company to stay one step ahead and gain trust and respect from both consumers and industry leaders.

Europcar: green by nature

For a company that hires cars by the million each year, Europcar is acutely aware of the potential impact of the company's business on the environment. With its global reach and world-leading position comes great responsibility, and so Europcar does all it can - and more - to be as environmentally friendly as possible.

Offsetting carbon emissions - Europcar has partnered with ClimateCare to offer every customer the chance to offset their CO2 emissions by funding sustainability energy projects.

Green vehicles - as mentioned by Deli, Europcar is also committed to ensuring its fleet is well-stocked with the latest range of greener vehicles, including hybrid cars, flexifuel cars and those with the lowest CO2 emissions. Electric cars will complete the offering in 2011. Vehicles in the Europcar fleet have an average age of 4.4 months and emissions of 139. 8g/km CO2.

Europcar in numbers

  • Number 1 in vehicle rental in Europe; among the top 3 worldwide
  • €1.9 billion in revenue in 2009
  • 9.5 million rental contracts in 2009
  • 7000 employees in 2009
  • Europcar has a presence in approx. 150 countries
  • Thanks to their commercial alliance, Europcar and Enterprise of the US have the world's largest rental network with 13,000 stations and 1.2 million vehicles

Greenway System

At the forefront of technology, the Greenway system lies at the heart of Europcar's competitive edge.

Developed continuously since its launch in 1994, this unique platform has become the interface for managing all of the company's activities - from reservation management to sales, marketing, billing and insurance, as well as fleet management and maintenance. Thanks to Greenway, Europcar is able to handle on average:

  • 38,000 reservations per day
  • Over 30,000 check-ins and checkouts daily
  • As many as 6500 users simultaneously connected at any hour of the day or night.

With Greenway, Europcar manages the business of its subsidiaries in 11 countries and reservations for its franchise network around the world. The system ensures the rapid integration of Group acquisitions and accompanies its development in new regions, such as Australia and New Zealand. Greenway is capable of integrating new business processes to successfully steer the business of new entities while responding to the Group's needs."

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