Dreamland: shaping the tourism business for the

digital future

Management of Information Systems - FT MBA 2020, Group 7

• Alessandro Berganton
• Filippo Maria Stefania
• Roberto Polisano
Business is diversified and solid
• Market is growing
• Approx. € 200 mln. revenues with 8% EBITDA Margin
• Good economic solidity also if compared to industry peers
• Diversified proposal supported by 20 villages and 20 other destinations via hotels or local
agreements

Distribution Channels Product Lines Clients segments

• Agencies • Vitality • Young couples
• Online • Relax • Families with children
• Family • Seniors
• “New package” niche
• Corporate

Management of Information Systems– FT MBA 2020, Group 7 2

Key turnover figures
• The revenues of the company are split between different Δ 5,8%

client types and distribution channels.

o Approx. 53% of revenues (excluding bespoke
services) comes from agencies selling to “senior and 52.9%
families” through Holiday packages. This revenues 47.1%

come 100%.
o Pure online sales account for approx. 47% of
revenues and come from new packages and corporate 11.8%

clients.
Agencies Online Angecies + Online
o Young couples and adults are targeted both using
Revenues
agencies and the online channel and account for Turnover previsions
approx. 12% of revenues. Packages and targets % Revenues Distr.channel
senior and families 45% 90 Agencies
• Excluding target clients that are targeted from both Holiday
young couples and adults 10% 20 Angecies + Online
agencies and online there is a delta of almost 6% in New packages 25% 50 Online
revenues between agencies and online at the moment. Corporate incentive 15% 30 Online
o We need to consider that the online market is likely to Other (bespoke services) 5% 10 N/A
Total 100% 200
grow in the future, meanwhile the agencies channel EBITDA Margin 8% 16
are going to suffer a lot from the Covid-19 backlash
and become obsolete in a near future.
Management of Information Systems– FT MBA 2020, Group 7 3
Penetration is good over the age spectrum
• ISTAT data on Italian population: 25,7 millions of families Family Type (Italy) % mln.
o Families with children are approx. 46,5% 1 person 33,3% 8,6
• of wich young 95,0% 8,1
o Families without children are approx. 52,9%
• of wich old 5,0% 0,4
• Based on population tables we can assume that approx. 30% of couples Couples without children 19,6% 5,0
without children are older couples where children are now part of a • of wich young 70,0% 3,5
separate family and approx. 5% of 1 person families are made of older • of wich old 30,0% 1,5
people. We then obtain those numbers: Families of 5+ people 5,3% 1,4
o Families with children are approx. 46,5% Couples with children 33,0% 8,5
o Young families without children are approx. 45,4 1 Parent with children 8,2% 2,1
Other 0,6% 0,2
o Older families without children are approx. 7,5%
Total (mln) 25,7
• families with children 46,5% 12,0
• If we look at the segmentation of clients (as seen in the previous slide, • families without children 52,9% 13,6
excluding corporate clients) and the relative share of Italian families we • of wich young 45,4% 11,7
obtain very similar numbers, meaning that the penetration of different age • of wich old 7,5% 1,9
segments is almost equal
o Senior and families account for approx. 54% of the families and for Family Type % Pop. Rev. (mln) Rev. %
approx. 56,3% of revenues Families with children 46,50%
54% 90 56,3%
Families without children (old) 7,55%
o Young families without children account for approx. 54% of the
Families without children (young) 45,36% 70 43,8%
families and for approx. 56,3% of revenues Total 160 100%

Source: ISTAT
Management of Information Systems– FT MBA 2020, Group 7 4
Migration to online sales seems valuable
Data and Assumptions
• Average EBITDA margin equal to 8%
• Corporate incentive and bespoke packages are the ones with
highest marginality
• We have lower marginality than the average through agencies
• We have higher marginality than the average on online sales
• The sales made targeting young couples and adults are evenly
split between agencies and online
• Seniors and families are split as the Italian population
• People are more and more prone and able to buy online
Digital Migration
• If we migrate all the packages, but the ones for the seniors (the
less digital-friendly segment) online we can obtain an
improvement of the EBITDA equal to approx. 23,8%.
o Due to the weight of the segment almost all the differential
will come from families.
o Agencies won’t be happy about the change, so we can give
them more marginality on the senior packages
o Another option would be to at least open the families to
online sales and still use agencies as parallel channel.

Turnover previsions Actual EBITDA Margin Digital Migration EBITDA Margin Δ

Packages and targets Distr.channel % Revenues % mln. Distr.channel % Revenues % mln. mln.
Families Agencies 39% 77 5% 3,9 Online 39% 77 9,5% 7,3 3,5
Seniors Agencies 6% 13 5% 0,6 Agencies 6% 13 4% 0,5 -0,1
Holiday
Young couples Agencies 5% 10 5% 0,5 Online 5% 10 9,5% 1,0 0,5
and adults Online 5% 10 9,5% 1,0 Online 5% 10 9,5% 1,0 -
New packages Online 25% 50 9,5% 4,8 Online 25% 50 9,5% 4,8 -
Corporate incentive Online 15% 30 13% 3,9 Online 15% 30 13% 3,9 -
Other (bespoke services) N/A 5% 10 13,5% 1,4 N/A 5% 10 13,5% 1,4 -
Total 100% 200 8% 16 100% 200 10% 20 3,8

Performance upgrade 23,8%

Source: ISTAT, Ordine dei Commercialisti
Management of Information Systems– FT MBA 2020, Group 7 5
Redirect cashflows to support growth

• Using a BCG matrix, can help to visualize the viable and most
Question Mark Star
effective strategies in terms of investment decisions based on the
company’s current products: to decide on which product’s category
allocate the largest portion of our IT investments and how to
Corporate & Corporate &
finance them.
New Package New Package
• In this regards, since the holiday packages cover 55% of the

Growth Rate
company’s turnover, particularly the ones coming from senior t1 t2
customers and families, who over the last 20 years have constantly
decreased their loyalty level, we would suggest to use this product
as a cash-cow to reinvest most of the profits coming from this Dog Cash Cow
category into highly promising products’ categories such as:
corporate packages which already present high margins, even cashflows
though currently represent only a small portion of Dreamland’s
revenues. Young Couples Senior and
and Adults Families
• Consequently, a more extensive and effective use of business
analytics and social platforms would also allow Dreamland to run
more precise forecasts on future demand’s trends and customers’
preferences, allowing to extract higher value also from New
Packages’ category. Relative Market Share

Management of Information Systems– FT MBA 2020, Group 7 6

Critical gap in IT efficiency
Issue Effect Possible solution
Villages saturation and changes in bookings not timely Inefficient purchases Integrated Cloud ERP
available
Operating costs managed locally and shared in a matter of Late control on costs and marginality Integrated Cloud ERP
weeks via mail and Excel sheets
No reliable feedback from clientele, paper questionnaires Strategic marketing decisions and promotions Data analytics department
are analyzed locally and always positive despite declines are not well aimed
Strategic marketing focused only on brand awareness, No insights on customer needs nor on market Data analytics department (AI studying social
limited forms of communication with clients trends media sentiment/trends) and development of
more effective CRM
Fractionated application portfolio with no synergies Exchange of information is slow and Integrated Cloud ERP
bureaucratic
Limited number of sales and communication channels No capability to meet new consuption habits Omnichannel marketing strategy
Few and inadequate people in IT dept. Competence gap on cloud technology and Revamping of IT department with skilled on
useful IT tools recent technology
Low budget for IT Lack of an efficient IT infrastructure More investments in IT
Large amount of data on customers unexploited Missed opportunity to improve products Data analytics department 

Management of Information Systems– FT MBA 2020, Group 7 7

Application Portfolio Map

Final goal of our Application Portfolio Map for

Dreamland:
• Reaching a broad functional coverage application,
where only a limited number of processes use specific
applications. The proposed Cloud ERP will cover most
of the departments, standardizing internal processes
and it will be integrated with the booking platform.
• In this case, the complexity of the application portfolio
management will be more limited and communication
between applications will be easier, resulting in a
better integration among the processes.
• Consequently, information for decision-making
purposes will be more easily accessible.

Management of Information Systems– FT MBA 2020, Group 7 8

Peppard’s Portfolio Matrix
Strategic
Data analytics supported by AI tools:
it will generate insights on market
(strategic evolution of the company)
trends, customer satisfaction.
Omnichannel marketing strategy will
Importance for future business
increase sales channels and
customer funneling towards
Dreamland’s platform
Main Goal: Investment and
continuous innovation
Key Operational
Cloud ERP enable all villages to share
costs, inventories, and facilities
saturation data in real time with the
headquarter. Management tools
present in modern ERPs will allow for
a more effective planning of
purchases, budget allocation and
tactic promotions aimed at full
saturation of touristic facilities.
Main Goal: Investment in high quality
solutions
Importance for current business
(Ability to control and optimize processes)
High Potential
Experiment cashless payment
methods and wearable technologies Continous change
leveraging IoT around villages in
order to maximize amount of
customer data
Main Goal: experimentation • The Application Portfolio
is supposed to change over
time as the needs of
Support companies change.
• In fact, companies modify
Cloud infrastructure put in place
for the ERP will facilitate all and replace applications or
operational activities requiring introduce new ones.
sharing of information
• For this reason we need to
Main Goal: rationalization and
cost reduction adopt also a dynamic
portfolio map, represented
by the Peppard’s Portfolio
Matrix.
Management of Information Systems– FT MBA 2020, Group 7 9
Henderson and Venkatraman Matrix

• There is complete alignment when the business dimensions, i.e.

strategy, organization and processes, and IT dimensions, i.e. IT
strategy, infrastructure and IT processes, are aligned and when the

External
Business IT Strategy strategic dimensions are aligned with the operational ones.
Strategy • It becomes therefore essential for a company to understand the
variables that allow it to act both on the dimensions of alignment
Strategic Fit

and on the relationship between the dimensions.

• Based on many studies, we can group variables into 6 types:

Organizational 1. Communication

Internal
Infrastructure IT Infrastructure 2. Competence and measurement
and Processes and Processes 3. Governance
4. Partnership
5. Architecture
Functional Integration 6. Skill

Management of Information Systems– FT MBA 2020, Group 7 10

Suggested changes is structure

• It would be beneficial to move IT up in the structure and make it direct staff to the CEO in order to give a signal of commitment to the whole Digital
Transformation process and in order to keep it aligned with the broader company strategy.
• It would be still interconnected to the General Director with a dotted line because, on the other side, IT should always stay in touch with the more
operative part of the business.
Management of Information Systems– FT MBA 2020, Group 7 11
Suggested transformations
• From the analysis the and the interview with C-levels it seems clear that the competitive landscape is changing and more volatile than ever. If
DreamLand wants to keep up with the pace of alternative products in the tourism industry a process of digital transformation is required,
with the target of enabling the company to rapidly adapt its offer and to respond promptly.
• The analysis showed that the current IT infrastructure suffers from excessive fragmentation and lack of synergies, many practices are
outdated and time consuming, leading to internal inefficiencies and lagging in responding to trends shifts.
• The proposed transformation comprises three main area to tackle effectively the greatest source of competitive disadvantages:
o Strategy: ampliation of the marketing department with a data analytics team supported by AI tools that will have the target of
leveraging both internal available data on current and past customers as well as probing the social media and Big Data from the
internet to get useful strategic insights on major trends. This will allow DreamLand to respond in a timely manner, developing
adequate products for every segment and to define data driven strategies. Availability of current customers data could be maximized
by introducing cashless payment methods inside the villages, exploiting IoT capabilities.
o Efficiency: implementation of a Cloud ERP that will enable all villages to share costs, inventories, and facilities saturation data in real
time with the headquarter. Management tools present in modern ERPs will allow for a more effective planning of purchases, budget
allocation and tactic promotions aimed at full saturation of touristic facilities. This change will require local personnel training on the
use of the new management tools.
o Sales: integrated(multi-channel) and flexible digital booking platform that will allow to better penetrate current segments, as suggested
from the financial analysis and to adapt to future ones. The strategic tools might well suggest an update to current segmentation that
will be easily managed with a flexible system accessible from different channels
• The suggested digital transformation journey requires a complete renovation of the IT department, that will need fresh and skilled resources
as well as the new data analytics group. The transformation will also to allocate more resources for IT in a structural way, as like all
strategies, the above-mentioned investments constitute a long-term commitment. IT will need to be the center of most departments' activities
and directly under CEO’s supervision.

Management of Information Systems– FT MBA 2020, Group 7 12