Table Of Contents
2. Requirements of a Travel agency
3. Enterprise Resource Planning
4. Benefits and Limitation in of using ERP
5. Challenging Factors that can either make system successful or a failure
This report will discuss some of the challenges in organizing an information system for a travel agency. In the world of development and innovation of technologies, many industries are adapting new technologies to manage their business operations effectively. The Business Information Systems and Business Information Technology can improve the organization’s efficiency and also revenues. However implementing such systems involves greater risk and higher cost. This report will discuss the key factors and problems involved in implementing an ERP based system to a travel agency. Furthermore, the paper also provides some suggestions for implementation of such systems.
With the advent of technology, there is a massive growth in travel and tourism industry resulting in a profitable business. According to IBIS (2015), the industry is reading its growth by 2.6% annually from the past five years and generating $7 billion of revenue to the industry. In this light of growth and advancements in technology, the companies have to maintain a competitive advantage in order to grab the market share. Generally, such advantages can be achieved by adopting new systems into business. The improvements in information systems have changed the dynamics of travel agency business with e-commerce and support features (Buhalis & Law, 2008). As e-commerce is based on internet, many agencies are adopting these systems to maintain their sustenance (Bennett & Lai, 2005). Usage of these systems can help the travel agency managements, to reduce the maintenance cost, effective information management and also to reduce cost burden on suppliers. As cited by Bennett and Lai (2005) British airways has invested $ 1.1 billion annually for distribution and booking costs in the year 2001. Using information systems will increase the sales turnover by 70 % by cutting down several regular costs (Bennett & Lai, 2005). As the features and services increase, the complexities of the system also increases and result in tougher situations to implementing the systems. This report will discuss the key requirements of a travel agency, and analyze the problems in implementing an ERP based systems.
2. Requirements of a Travel agency
Travel agency business can be demonstrated as a consultant that acts as a bridge between the customers and resources (Travel ticket booking, Hospitality, and valuable suggestions) (Kuo, Chang, Cheng & Lai, 2013). As the business is to provide customer service, the degree of customer satisfaction is the value of their product (Kuo, Chang, Cheng & Lai, 2013). To maintain such service, traditional travel agencies have to take some factors into consideration in their daily operations. Employee behavior, ability to provide valuable suggestions, equipments and infrastructure, resources, lead time in generating itinerary and feedback system, are the major factors that play a major role in making business successful (Martínez Caro & MartínezGarcía, 2008). Most of the above discussed factors have a human interface between customers and company, so the chance of occurring errors in the process is high (Martínez Caro & MartínezGarcía, 2008). Apart from the factors, supplier relations, marketing, maintaining reserve stock level (able to maintain certain number tickets with them), data management are the key components in their daily operations (Andreu, Aldás, Bigné & Mattila, 2010). In order to manage the process efficiently and effectively, agencies have to adopt a technology that can reduce the errors.
Travel agency can adopt an ERP based system with internet and place themselves in ecommerce market. As cited by Kim, Kim and Han (2007), travel agencies such as Travelocity and Orbitz are performing efficiently with the adoption information systems. The main component for an e-commerce is the platform that connects its suppliers to the customers. Travel agency has to create a database taking the information from the suppliers and customers such as flight timings, prices, seat availability etc. (Kim, Kim & Han, 2007). In order to mange this information, managements has to provide individual portals in a controlled network like extranet (Wei, 2010). By this feature, travel agency can create a profile for individual customer and provide versatile options and valuable suggestions (fare comparison, sorting, seat selection, money transactions, itinerary and local information of their destination) based on previous purchases with the agency (Kim, Kim & Han, 2007).With this ERP based systems, agencies can monitor transactions from the customers and also helps to analyze agency’s business movement by statistical analysis and this result in to maintain their reserve stock level (information regarding seat availability in flights, hotel vacancies etc) (Tsai, Huang & Lin, 2005). From the research it is found that the above discussed features should be incorporated in the design of the system. However, it is argued that implementation of such systems is quite complex and costly.
3. Enterprise Resource Planning
Enterprise Resource Planning (ERP) can be explained as a system that integrates the data from all departments of an organization and helps the managers in decision making (Stratman, 2009). As the competition in the market is accelerating in the recent decades so companies are bound to maintain a competitive advantage, on this motive ERP has come into existence in order to manage organizations resources efficiently (Zarei & Naeli, 2010). ERP records and analyzes the data of every operation in the organization and helps the management of the organization to position them on the scale of performance (Botta-Genoulaz & Millet, 2006). In this present world, ERP is a software package with set of functional departments such as finance, human resource, sales production, marketing etc., (Zarei & Naeli, 2010). ERP software package is limited to the organization’s operations and mainly concentrates on data flow between the organization’s departments particularly on the resource usage (Botta-Genoulaz & Millet, 2006). Furthermore, it links its suppliers to customers and helps the organization to control the processes at every stage of the structure (Botta-Genoulaz & Millet, 2006). ERP when used in ecommerce the system is integrated with Transaction process system that records money transactions and some important data transactions (Dezdar & Ainin, 2011). Generally, ERP’s importance can be found in inventory management, project management, production, and marketing research (Wei, 2010). Implementation such complex system is a vital task for organizations.