Lastminute.comwas the darling of the dotcom boom. With young entrepreneurial founders and a promise of five-star living at three-star prices -attracting the attention of the media and online shoppers alike, the company was held up as an example of a British company taking on the world – and -doing rather well at it, thank you.
In 2000, just two years after its launch, the company, which sold off unused inventory such as package holidays, flights and consumer products at cut-rate prices to impulse buyers, was floated on the stock market. Its shares rose from 380p to 502p on day one, and it was soon the second most-recognised online retailer in the UK.
Despite a tech stock market crash and the damage to the travel industry of the 9/11 attacks, the firm continued to grow and its offerings diversify through a series of mergers and acquisitions which continued until 2005, when a bloated Lastminute was bought by US travel e-tailer Sabre Holdings for $1.1bn – shareholders received just 165p for each share.
On the plus side, the rapid growth of the company had brought it almost 10 million subscribed customers, high brand recognition and a breadth of offerings from around 13,600 suppliers. In the debit column, seven years of expansion had been performed with very little consideration for the IT infrastructure that underpinned not just the back-office systems, but the shop window itself.
CIO Fin Goulding came to Lastminute after a career at financial industry giants including Visa, NatWest and HSBC, and found a startup mentality still in place at a multi-million-pound corporation.
“For a dotcom, Lastminute has lived with legacy and immense growth and change for some time. The major objective was always to get stuff into the wild: new ideas that nobody else had. The idea was that first to market wins,” he says.
“In a small infrastructure where there’s four developers round a table, that works, but when you grow to a technology team of 350 and 2500 servers, those practices don’t work any more.”
Goulding’s goal was to help the firm mature technologically, while ensuring that the creativity that helped shape the brand wasn’t lost in the process. Process being the operative word in the programme known as ‘Dotcom to Dotnow’.
“We’ve had to introduce a modicum of structure and control while trying not to stifle the creativity of the dotcom team. That’s why it’s called Dotcom to Dotnow – we’re trying to keep alive some of the heart of the organisation,” says Goulding.
“But we are a part of a large corporation in Sabre, so we do have a certain amount of professionalism that’s needed to introduce software into production and make sure it works, rather than the old days when we would test it on the customers.
“The IT team needed a focused working methodology and clear accountability in order to improve overall quality, productivity and value. There was a realisation that the information technology infrastructure had to evolve, not revolutionise; after all, we didn’t want to become a bank.”
Key to the clean-up was the realisation that the company had no information on which to base strategic IT decisions and assign business priorities. Goulding appointed Corporate Project Solutions
(CPS) to install and manage the Microsoft EPM suite of Microsoft Project Professional, Project Server, Project Web Access, SharePoint and EPMOffice in order to take control of Lastminute’s project portfolio.
Within six months of CPS’s initial implementation, Goulding could see a change within the project management team, both in terms of visibility of current projects and the resources they were using, and regarding future planning where bringing all the project management resources together allowed managers to measure the effectiveness of completed projects and allocate roles on new projects accordingly.
With the time developers were spending on tasks being recorded accurately and centrally for the first time, having a clear measurement of resources to hand showed Goulding where the lowest return on investment was being delivered. This was often in legacy systems that needed maintaining at the expense of other projects.
“Previously we had lots of data but no information,” says Goulding. “The exec team had no idea that half our time was going on maintenance, so that gave us a candidate list of applications to get rid of they were costing so much money to maintain we might as well replace them.
“By fixing all these things we’ve reduced costs by about 50 per cent, and a lot of that’s down to effective use of resources – planning, projects, getting the right ratios of project managers and testers, and we couldn’t do that until we could measure the resources we were using.
“The most important systems are the front-door applications, and we’ve imposed a big push on quality. As a developer I hated QA, but as a manager I realised the important of having a good quality management system. That meant we could put releases out without having to continually roll them back.
“This sort of transformational improvement has become business as usual for us. It’s like a house: people won’t see much change to the outside – the site itself – as all our work has been in the foundations. But we went from service levels being red every month to a green 2009. This means increased sales through the website.
“Visibility has never been greater – our COO loves to see where the money is going, making sure we’re not biased towards categories that are not so profitable, that we’re not spending money on flights rather than hotels. It’s interesting to see the business getting quite excited by it all.”
As well as a 400-strong IT team in the UK, Lastminute also has three international development centres in Krakow, Bangalore and Buenos Aires. The Polish office is mainly used by Sabre’s other European concerns, and while development work is technically offshored to India and Argentina, Goulding stresses that it’s more than a regular outsourcing arrangement.
“I’ve been involved in offshoring and outsourcing since the early Nineties, and you never really got good visibility, but these centres are owned by Sabre. There’s a leader on each site that works for me and they use the same project management tools so I know what resources they’ve got and what projects they’re working on.
“I can balance resources between the centres if I need to, but our local people can manage local suppliers for extra resources, and I don’t have to do anything. It’s unusual not to have central control, but it gives our local teams more flexibility.
“They’re our colleagues. Generally with outsourcing you get the best resources until contracts are signed, and then they’ll move on to someone else’s project and you get the interns. But we use the same career development there as we do here.”
Having centres across three continents gives the company round-the-clock facilities which hand over to each other every eight hours. It’s ideal if QA is up against it and people need to work overnight to meet a project deadline, although it’s unlikely individual projects would be passed from one territory to another. “That’s where you start adding inefficiencies,” says transformation director Terry Dewhurst.
One thing that everyone at Lastminute is keen to retain is the youthful, creative mentality of the company. Goulding has balanced the experimental, skunkworks nature of a dotcom startup with an efficient project team by encouraging colleagues to come up with ideas at regular ‘hack sessions’. These are two-day brainstorms where everyone is free to develop ideas that will increase sales, brighten up the website or just improve office life.
“When you introduce more formal processes around technology, teams and projects, you can stifle some of the creativity and innovation.”
A more permanent version of the hack sessions is the Labs Team, a group of seven or eight designers, developers and digital marketers with a very wide brief. This year, they were challenged to come up with three or four products that would create a stir in the mobile space.
The tools the Labs Team has developed may not make the biggest impact on the balance sheet but have captured the imagination of the gadget press. NRU for iPhone and Android, for instance, notes a user’s location and shows them the best hotels, restaurants and theatres in the vicinity.
Another app, Topsee, works on an even simpler premise, displaying six images on the iPhone’s screen, each one linking through to a ‘top five’ category ranging from the standard – bars, hotels, shows – to the quite unexpected.
“They did go a bit over the top on some categories – one button revealed the top five penises in London – all statues, of course!,” Goulding laughs. “It was quite irreverent and typical of a dotcom. It may not make us much but we love that kind of creativity and it’ll cause a few eyebrows to be raised.”
The team certainly brings in the column inches. An earlier Labs product, Pronto, featured in the national press for offering a search engine in regional accents. Visitors to pronto.lastminute.com can build search queries in Scouse, Glaswegian, Brummie and Mancunian dialects, among others. Choose to be Geordie, for instance, and you can search for ‘A reet posh hotel in London the day like pet’, and get a list of the cheapest hotels in the capital.
“They’re a bit of fun, and a reminder that we’re part travel experience company and part digital marketers.”
Interestingly, he adds, a lot of developers don’t want to work in the less structured environment that is Labs – not surprising when he describes the company’s open recruitment policy.
“A lot of organisations make the mistake of hiring people who all look the same or have the same traits, but as you get older you learn that you need people with all atrributes – introverts, extroverts, big-picture people, and it’s no different for us. We interview people who are creative – they won’t wear a suit or even shoes – and at the other end we’ve got very sober serious people doing the same job.”
Goulding’s dedication to the industry- is reflected in his work on the British Computer Society’s professionalism team, which is working towards the creation of an accredited chartered qualification for IT professionals, the CITP.
“The qualification is about getting a benchmark like those in accountancy or medicine. Their chartered status is proof that they are skilled professionals. In technology we have nothing like that.
“I wanted to bring in a programme manager, I could look them up online, see that they had CITP status, and the whole code of conduct would cover me if something went wrong.”
Future plans are dominated by a global convergence, starting in Europe where many of Lastminute’s acquisitions are still using their own systems or even none at all. Goulding’s team will also switch its attention to the virtual shop window, and will continue to port the high standards of financial services into the leisure sector.
“Web 2.0 is all very good, but high-availability is more important to our customers. There’s nothing worse than visiting a site and finding something broken,” he says.
“People expect sites to be more professional, and we’re seeing a lot being translated from the financial services world – high availability, speed, uptime – these are phrases I was using in banking; people just won’t accept shoddy sites anymore.”