Host Intro (Gene Kim)

Sir Winston Churchill is credited for saying, "Never waste a good crisis." And there are few industries that have experienced existential crises due to the global pandemic than the travel and hospitality industries. I am grateful to my friend, Dr. Mik Kersten, author of the book "Project to Product," who told me about one of the most remarkable stories of how an organization was able to use the global pandemic as a way to radically transform their organization and also accelerate their pre-pandemic goals. I'm so honored that our first speaker this morning is Pieter Jordaan, Group CTO of TUI Group, the world's largest integrated travel company.

Before the global pandemic, it had generated nearly €20 billion in revenue. When the pandemic hit, they simultaneously needed to figure out how to bring nearly two million passengers safely back home, as well as figure out how to survive a period when almost no one wanted to travel, and still leave the pandemic even stronger than when it entered it. I think this transformation story is so remarkable for so many reasons, one of which is to the extent of which business and technology leadership was impacted. I genuinely believe that their story will be deeply studied for years to come.

Here's Pieter Jordaan.

Pieter Jordaan

Thank you, Gene, for that great introduction. Yeah, I'm feeling honored to present here. So I am going to talk about how to DevOps the hell out of your COVID crisis. So I hope you find this interesting. So a little bit, who am I?

So my name is Pieter Jordaan. I'm TUI Group's chief technology officer. I report to Frank Rosenberger. He's a member of the executive board, and he's responsible for IT, future markets, and reports to the group CEO. So, okay, so today, what I would like to try and achieve in this 30 minutes is really tell the story about how our journey of a €20 billion group company went all in on cloud, totally transform ourselves into DevOps as a group, and move to a product organization during the COVID crisis.

Okay, so we're going to try to tell you a little bit how we start this journey, how we initially started with small local initiatives and how we then eventually ended up doing it at the global scale, all in. And what we learned through the COVID crisis, how it accelerated us, and what we discovered. Again, and I'm going to share with you all the textbook rules I broke. So Gene will mark my homework when I'm done. Okay.

So who are we? So TUI is the world's largest or number one integrated travel company. So what does it mean? So we take about 27 million customers on holiday every year. That, of course, all these things is pre-COVID, will be too hard to explain that for you in COVID terms.

Okay, but what does it mean to be integrated travel company? So we have our own airplanes. You can see 150 plus airplanes, 380 plus hotels, contracted hotels, branded hotels, resorts. We have 16 cruise ships. We go to over 115 destinations worldwide.

Okay, and our pre-COVID turnover is in 19, 19 half. We had our best year ever, just before COVID hit us. And then of course, you have 1,600 travel shops all around Europe. And on the IT side, we have 20 data centers, 400 million product combinations, 8 million price updates easily on a daily basis. 58 billion searches peak hours.

So me coming from a technology background, working for investment banks, building large automated trading platforms, coming to TUI was very interesting because of the type of company it is. Really, it's not just an airline, it's not just hotel. Actually, it's a trading company underlying with heavy assets it needs to operate, and you'll be surprised how many different ways you can price an airline seat. Okay. So how did our journey start?

Again, not very different to most people. We, of course, decided we need to go to the cloud, and TUI was a very traditional company. We tried all the move a small asset to the cloud first and tried to get buy-in in the cloud, focus on our data center migration. So eventually did the big business case. We're going to close all our data centers.

That was our goal. And from an agile perspective, you have these eight big countries who all have their own e-commerce teams, spearheading agile in their country, in their initiatives, but really very localized initiatives. And when we do big programs, it's big programs, big projects, and we measure time, we measure cost, right? And we really focus on risk management. Don't touch the revenue, deliver on time.

Okay. But just before COVID, we actually realized as a business, we need to change. We have to consolidate. We can't continue to operate as tons of small markets. We need to start to come together.

And again, we set up a big program and every MD of all the markets are there, and all the CIOs and the group CEO, and we have this big plan, and it's going to take us years to get there. Years. Because everyone's protecting their revenue, everyone's protecting their local initiatives, their local nuance. And then COVID hit. COVID heart attack hit the travel industry really, really hard, as you know.

Suddenly, we find ourselves in a situation where we have more than more than two million customers abroad that we have to repatriate. We have cruise ship support. You know all the news about the cruise ships. Airlines could not even fly back to some countries. We had cruise ships that couldn't enter port.

Suddenly, we have to repatriate all these customers, and all the focus is back to how do we control our burn rate? How do we bring all our customers back? But one of the number one decisions the board made was that this initiative to consolidate cannot go to waste, especially the fact that we, as a company, probably will experience prolonged reduction in revenues. And that's when they decided we have to change the way we do it, we have to do it now, and we're going to have to do it fast. So that really changed the way we approached our transformation.

We went from small local transformations, picking the best, moving one country at a time, to consolidate now. Use this crisis. Use this depression of our revenue situation to consolidate the business, consolidate IT. So, what did we do? We decided we're going to go from a project structure to product.

We're going to totally change the way our local organization system organized. We're going to change the way IT is organized. We're going to have one IT, one platform that delivers value and capabilities to all the markets. We're going to change the business to also consolidate around a single capability. Not have five, six, eight different e-commerce teams, five different ways to contract.

We're going to contract once. We're going to price once. We're going to sell once. And really digitalize our processes. So, that was then our remit given to us, given to me, and that set us on this journey.

Of course, luckily, I can come here and tell you already about some of the successes we had. So I'll let a little bit out of the bag. We managed to achieve in a few months what probably would've taken us years. Looking back at our pre-COVID program plan, it would've taken us years to get to what we've already achieved. Okay, and now I'm going to tell you how we did it, what principles we followed, and also what rules we broke.

Okay. So, let's go through that. What was our goal? Our goal is pretty similar to most companies, right? We want to have a global product organization powered by a single digital platform.

What does that mean? We don't want to have 10 selling platforms. We don't want to have 10 contracting platforms. Don't want to have 10 customer service desks. We want to do stuff once.

Which is the right thing to do, which is the right ambition. The question isn't whether you should do it, the question is how do you get there? And this is really what we started to do. We consolidated. We decided we need to consolidate all our IT, and then let the business capabilities consolidate around IT, but we still need to serve the local markets.

And of course, in any big program, markets fight for their little nuances. But with the crisis, suddenly that changed massively. So we ended up deciding to build a single IT platform based in the cloud, totally DevOps, and focus on flow. And I think most of you, probably that's your goals as well, but I think you'll see how timelines can massively help you. Okay.

So, what I said to Gene is actually if we did this the textbook way, it would take us 20 years to complete. Okay, so what did we do? How do we achieve this? Okay. Our first rule we broke was actually on cloud migration.

Everyone says always, "Take your smallest little application, move it to the cloud, learn, grow, get people confidence." And it was another big program that actually forced us to migrate a large part of our business and consolidate our northern region, and what we decided to do at that stage is take the selling platform, which is responsible for easy 50% of our revenue, and move it to the cloud. And because of the program timelines, we only had six months. So I asked the team, "How long is it going to take you?" They said, "Oh, it will take us two years, and at least two years. We can't say." I said, "Well, you have six months." Of course, we didn't have the skills. We got cloud experts in, but we trained our staff alongside these experts.

We migrated this whole stack in six and a half months, and this was the catalyst for us to be able to start to feel confident that we can do this program, we can do this total transformation of the group. And it changed the way the business started to view IT and IT transformations because they started to see the benefit. Shortly after we did this migration, we had some airlines collapse in the UK, and actually, we could scale to hundreds of times the previous peak volumes because we were in Amazon, and everyone recognized it would not have been possible if we did not do this. So suddenly, I think we got over this, what's the benefit of cloud? Trying to convince people based on cost to convincing them based on business value.

Okay. So, the next thing I want to talk about really is the transformation our business is undergoing and has to undergo because of this transformation. So, we are a big group. We grew through acquisition, and the acquisition obviously required then different P&Ls to exist in a certain group. So, each P&L have their CIO looking after their KPIs and uptime, and you have the different general managers looking after their sales and their purchasing and their productification.

And each one of them responsible for their revenues. But if you want to consolidate all of that into a single group, you have to give up certain autonomy, and you have to trade off autonomy with the benefits of doing stuff once. And what that does, it changes and requires three fundamental shifts in leadership. And I'm applying this to IT leaders, but it actually also applies to the business leaders. And this is something we had to undergo, and still undergoing, and forcing in the way we hire and the way we train.

But I would say this is the biggest single accelerator you can have in your business. If you talk to anyone about cloud migration, if you talk to them about transforming your business, they will say executive buy-in. Okay, what does executive buy-in mean? Okay, this is what it means for me. I think it's not just buy-in and saying, "Yes, here's the money.

Go do it." You also need to get the buy-in to change the way the leaders are acting, making decisions, and what they are protecting. So in the old world where you have different P&Ls, smaller companies, each one of them protecting their little KPIs, right? The CIO has a very wide remit. He has his ITIL capabilities. He has to look after everything, right?

He has his KPIs he reports to the board. What's his cost? What is his uptime, right? And he manages risk. He basically tries to avoid to break things, and only touch stuff if the business wants to do it.

So avoid failure. That is his number one goal, right? There's a great book, "Seats Around the Table" I think it's called, which talks in depth about this. But really what we are shifting towards as a global IT around the domain organization, product-based structure for our group and IT, we had to change from wide to deep single domain ownership. And what that requires then is a technical leader that can transform, that can also perform transformation.

And what does it mean when I say transformation? I mean maturity. Maturity of cloud, maturity of DevOps, maturity of your flow of business value out of the door. And that requires technology understanding. It requires organizational understanding.

It requires to also understand what the market is doing. It's a very different type of leader, right? And we had to change our top structure in IT to also become these type of leaders. And we're starting to recruit very different, away from general managers, who is managing a third-party supplier, to people that can lead and transform in-house. We made a conscious decision that we want to own our destiny, our future, our intellectual property.

And that required us to change the way that we recruit. And I think the main difference for me is in the mindset of these leaders, right? The management risk as the first principle versus managing the creative process. And what do I mean by managing the creative process? There's a great book about Pixar, "Creativity, Inc." I think it's called.

You can read it, but talks about how Pixar actually, and I stole this from them, so I'm giving them credit, actually forced all my IT leaders to read the book. And I was like, "Why am I reading a book about Pixar?" I said, "Because you all are trying to not make mistakes." And in this book, it changes your perception that creativity is part of... Failure is part of the creative process. And in order for you to deliver flow, in order for you to transform quickly, you have to fail. You have to fail fast.

You have to fail safe. You need your blast radius needs to be small. All these DevOps principles actually apply to a completely different type of industry. Animation was great to see out of context because it actually forced them to realize this is a mindset requirement. This is not a tool set.

This is not something I download and get my team to use. This is a way I think, and this is a way I make decisions. Okay. So where do we start? We decided that we need to make some fundamental decisions in our process of making this transformation.

So at this stage, just as COVID hit us, we already set up this big program, but suddenly our timelines got shrunk massively. Instead of having years, we have months. Actually, we have a window that's not quite certain. It's closing on us all the time. Where you were making decisions based on revenue, now you're making decisions based on how fast can I bring this transformation about in the safest way so that I can protect the benefits instead of my previous way of thinking, I need to protect risk all the time.

Okay. So like I said, that was our first success factor, was really the change in leadership. All our leaders started to read the books that helped us think about the transformation progress and process in terms of flow and creativity and incremental delivery instead of big programs that typically do, what's my milestones? What's my cost? And the next bit that we realized was that cloud is oxygen.

Again, we really actually made that decision a long time ago when we made this large migration. But for you, cloud is oxygen. So you can't really do this large type of technology migration without going to the cloud. So what we decided was that we need to change the cloud migration strategy. We had a strategy to close our data centers, and the decisions was based around that.

It was based around, okay-Take the easiest asset, migrate it, slowly moving it. That would've taken us years. So we changed it and said, "No, we're going to build net new and just retire the data center. We're just going to close it. We're not migrating anymore.

We're building what's required for this business, for its technology, and business transformation." So I'll talk a little bit more about that in the next slide on what rules we then applied. But cloud is, for me, the fundamental starting block with a different type of leader. So the next thing we changed was instead of saying, "Okay, which business wants to change?" We said, "No, no, let IT consolidate, then let the business migrate." Why do I say this? The CEO came to me and said, "Pieter, until you give me a single platform, I can't consolidate my business because my business is organized around individual capabilities." So I realized I had to go much, much faster, and consolidate building the platform so that there is a single commercial platform, there is a single pricing platform. And that's why we decided to shift to both product and all in on cloud.

And what you get is product helps you become an agile organization, and cloud helps you to become DevOps. You can try to become DevOps without cloud. It's really hard. Okay? So actually, starting with cloud and product as your primary goals, agile and DevOps is the natural outcome, the culture that you'd then adopt, and the way of behaving and changing.

So I talked about the way we had to change our view of risk, and we had to adopt a day one mentality. We decided we're not going to solve problems that's not existing. We have to move fast. We're going to deliver in global increments. We actually had a global hackathon.

We had all the teams working together, and we decided that hackathon will become the ways of working. Now we run in six weeks increments. We have hackathon, three-day hackathon day, a demo day, and we deliver. And then the last thing is we move to focus on visibility, on flow, and business value. Okay, so what does this translate into practical decision-making?

So we came up with these rules and actually, we say this so much, we didn't actually realize how fundamental it is. So when I did this talk, I realized this might not be natural for a lot of companies to act this way. So the first thing we decided was we have to move fast, and we have to move in increments. And because of COVID, because of this accelerated timeline, the business also suddenly have to make decisions quick. So when I say, "Hey, I'm building pricing module," which one of your 10 pricing structures do you want me to build?

I'm building one. Which one do you want? And that brings me to second rule, a capability exists once. I'm not building 10 different pricing structures. I'm building one.

I'm not building 10 web platforms. I'm building one. So that forced the business to break the universe down, join the transformation, join the incremental thinking process, and our creative flow of business value started to really take value. Okay. The third decision we made was everyone will go to AWS.

We basically abandoned all activities that was multi-cloud. We said, "You will go to AWS." Not just that, you will use the highest level available service possible. You won't build something that already exists. You will choose serverless and step function first and only build something if you can't do it with those. And why add that?

That it helped us to really accelerate and focus on business value. And it's net new services that we build. There are services we migrate, there's existing SaaS services we use, and there's other services that we said, "Okay, we will migrate, or we will transform over time." But the majority of our platform now is net new being built, and I don't have to worry about migrating old third-party legacy platforms to the cloud because frankly, those guys were not interested. So I'm just going to retire it. I'm building what I need, and I will retire my data centers.

So fourth thing, avoid one-way door decisions. Why? So that I can make decisions quick, and I can stay flexible. I can change in the future. So we talked about invest once, use multiple times.

So I'm building it for everybody. I'm not building it for this market or this market, their nuance, their little different green button versus that pink button on a different page. I want to build once. And that really helped with the business flow, and that's probably one of the hardest bit is to get all these markets to agree on what they want. And the pressure of COVID helped to distill this down to the most essential business value components that we need to deliver.

Okay. And that bring me to the second last one, which is consolidate large business value first. So why is that important? It's important because in the past, you will leave your biggest business to come on board last because they're like, "Hey, I'm making too much money. Don't touch me.

You build it first, then I will decide to come on board. Let me see what you deliver for me, IT." No. Suddenly, it's about delayed benefits. Okay. You come on board, you immediately get a benefit of the other market.

So if in the past where I invest five million, five million, five million, totally I'm investing 20 million, I'm only moving forward 5 million. Now, I can invest 10 million, and everyone's collectively moving forward twice as fast. So consolidating now the largest business is really important. So that is the biggest challenge, but it's also one of the biggest shifts that we made. Okay.

And I really force the business to break the universe into smaller parts, so nothing bigger than one increment. Like I said, we're running incremental, global increments, six weeks, three-day hackathon, and a demo day, and then we release. And why do we need to do that? Suddenly, our teams is not in the same office. They're sitting anywhere in the world.

We need to now collaborate from home, build, develop, release in an agile DevOps fashion, move to cloud, and move to a product organization all at once while everyone's working at home. So there's some other talks that some of my colleagues will give about how we had to do that, but that is essentially, I think, a brave step that was forced on us. But the benefits of doing all three of that was enormous. Okay, so that brings me to, what's the textbook rules we broke? Okay, so I touched on some of this, but I want to highlight it, and I would not recommend you do this.

But I would also want to caution you that you should really think about the consequence of following everyone else's path. And the reason I say, like I said to Gene, if I have to follow all these rules a little bit at a time, it will take me five years to finish. Maybe never finish, okay? So, you typically hear start with small workloads to migrate to the cloud. Okay, we did that, and we realized that it won't work.

I won't get to a critical mass where the business believe in cloud. So I took the biggest, most critical one, and I moved that first. That really pushed me into a next level of confidence with the business on cloud. Okay, lift and shift your workloads to the cloud. Do data center migrations.

Use those applications. Do the five Rs. With this program, we actually decided against that. We said, "No, we're going to build net new." Why? We can get to the business outcome the fastest.

If I have to choose the best out of five different dinosaurs and breeds and then hope that one of them turns into the giraffe I want, just build the giraffe. So it's much faster for me just to build net new in the cloud and go after the business value. From an agile perspective, you always hear prove the concept of agile initiatives, then scale. I did not have that luxury. It's not really a choice.

I did not have the luxury. Suddenly, my whole organization is thrown into a global pandemic, having to work globally from different locations. All my offices is closed, and now I have to build this new platform, consolidate multiple countries onto a single platform, single IT organization, single product structure for the business. I had to do it all at once. And in fact, by doing it all at once, you take out so much noise and leverage and ability for people to argue about the little nuances, and you really go after what's valuable for the business.

So why did we do this? We did this organization so that TUI is competitive in the market and can provide the best business value to their customers when COVID is over. Okay. So I'll talk about two testimonials. Our group CEO, when we did our cloud migration, he was the one who had to sign it.

He owns all the markets, and he goes, "I hear what you guys say, agility and flexibility and scalability. I just don't understand it. So you have to prove it." And then in those days, we still had to come back with cost benefits. Okay, so I actually managed to still save cost going to the cloud. But after we did this large migration of the northern region selling platform, we had some airlines collapsing, unfortunately.

And all those customers had to fly somewhere. They were looking for airline seats, and we could scale to hundreds of percent our previous peak volumes with no problem. And everyone recognized if we did not go to the cloud, we would've not been able to capitalize on that. But it convinced them that cloud is the place for us to be. Cloud is no longer a discussion for us.

And I think maybe from Aaron Sugarman, he's our group commercial executive, also lead our global transformation on the business side, is that if we did not move to a product-based organization, which is responsible for consolidating these business entities and business values around the single capability by IT leading, this is a great partnership because IT is building what he needs, we're building it once, and he can now design the best commercial business model that TUI needs. So with that, I want to leave you guys with what are we doing next? This is obviously not over. We're still migrating tons and tons of capabilities. We delivered our first milestones.

We're delivering more and more holiday product lines into this platform, and we're still moving these large markets out of their legacy platforms into the new platform. It's not a single big shift migration. You're selling off on the old system, you set up the new system. So this is an ongoing process, and we continue to build out a digital capability across all our markets, across our assets, and across for our suppliers, whether that's aviation, airlines, hoteliers, ticketing. So it's a very diverse capability.

So one of our biggest challenges, my biggest challenge, is really hiring people fast enough. DevOps engineers, hiring SecOps engineers, cloud experts, cloud architects, cloud enterprise architects. So you can reach out to me on LinkedIn, and also you can look up TUI Group on LinkedIn, and we always advertise there. So we're currently hiring, and I think it's exciting business. I come from very exciting real-time trading platforms, and I got stuck at TUI because it's such interesting business, actually.

It's not just one company. It's multiple companies in a single large group that has to work together. So for me, the challenge is how do you apply these principles of agile, DevOps, product, product flow, cloud across all these different markets, all these different companies, and build the best billion-euro group enterprise that we can, leveraging the best in the world. So I would be interested to also hear other companies that's on that same journey. So please reach out to me.

I would like to share my pain, hear about your pain, and also learn from you. So please reach out to me. I would love to have a coffee, virtual coffee in the chat. So thank you very much for having me, and looking forward to hear some of you in the chat later. Thank you.