Whether it’s health care, financial services, electronics or any other business, a manager’s ability to get information quickly from all aspects of an operation, organize it, analyze it and then react decisively to it, is often the difference between success and failure. Nowhere is this truer than in the ski industry where resort revenues are usually generated during the three-month period from December to March. In so narrow a window of opportunity, decisions based on poor or stale information are especially likely to impact the bottom line.
Computer technology is the answer to this problem in the ski industry just as in other business. Computers are used to monitor and control snowmaking systems, manage lodging operations and handle ticketing and rental functions.
And, linking the technologies to create an information management system can provide ski resort operators with even greater decision-making capacities.
“Few ski areas go to any lengths to integrate their technology into a cohesive system from which critical operating decisions can be made,” says Phillip Varney, manager of management information systems (MIS) for SKI Ltd., the corporate parent of Killington and Mount Snow, Vt., and Bear Mountain, Calif. SKI’s experience with information technology dates back to 1978 when management recognized that as the resort operations expanded and grew increasingly complex, computers could be used to collect and process data for reporting purposes.
That early investment in computer technology and the continual upgrading of hardware combined with the development of specialized software gives SKI a powerful advantage over its competitors. “SKI Ltd. credits its management information system as being, in great part, responsible for its excellent 20-year earnings growth rate of 12 percent,” says Martel D. Wilson, vice president and chief financial officer of the company.
Just how does SKI effectively integrate and manage information? The answer lies with Varney and his MIS unit. Varney, who joined SKI in July, 1991, has a B.S. degree in business administration from Boston University and a 25-year-career in data processing that includes stints with Dun & Bradstreet Software and Arthur D. Little. At SKI, Varney oversees a staff of 16, including programmers, technicians and computer operations personnel who are responsible for all of SKI’s computerized information management system.
Two IBM AS400 mid-range computers, based at SKI’s Killington headquarters, and over 200 personal computers spread across the three resorts, make up the system hardware. “Killington and Mt. Snow are directly linked via a data circuit over a telephone line,” says Varney. “On the other hand, Bear Mountain is not physically connected to Killington, but summarized reports for corporate reporting purposes are uploaded into the AS400s by transferring files using a modem.”
One AS400 is devoted to the accounting, payroll and personnel functions for corporate financial planning and management. On the other AS400 the hotel system and the customer information database. From here, the Killington and Mount Snow lodging and reservations systems (Bear Mountain has no lodging nearby) are coordinated among resort-owned and independently-operated properties. The customer database contains detailed information on 1.5 million people who have been recorded over the years as having visited one of SKI’s resorts or expressed interest through an inquiry. The customer database can be sliced and diced to target a specific market segment for a direct mail or advertising campaign at any time during the season.
PCs account for a significant amount of SKI’s computer-driven operation. Many of the PCs are grouped into several local-area-network-based (LAN) systems that run independently to complete a business activity or interact with the AS400s. For example, functions like purchasing and administrative reporting are handled with the aid of a PC-based LAN which, in turn, is linked to the AS400 running the resort’s financial systems. Alternately, snowmaking is controlled by an independent PC LAN with no linkage to the AS400s.
“Having an arsenal of hardware is one thing. Getting the most out of it is quite another,” says Varney. And this is where he maintains SKI Ltd. is differentiated from most other ski resort operations. Over the years, SKI’s MIS personnel have written and fine-tuned programs as needs dictated. For example, in snowmaking SKI’s programmers wrote their own program with an off-the-shelf, fourth-generation language development tool called Magic PC. The snowmaking software, originally written almost 10 years ago and updated since, contains a weather management system and monitors the most cost-effective use of electricity. “Even though computers tell managers which snowmaking guns to turn on and what mixture to use, SKI’s crews must be deployed to get the job done,” says Varney.
SKI’s ticketing system was also written using Magic PC. Point of Sale (POS) PC units gather the number of tickets sold, revenues, yield-per-ticket and, in an example of information integration, the data is uploaded into the financial management AS400 for accounting and reporting.
Several of the applications developed by SKI have grown into a business unit within SKI called Resort Software Services Inc. Varney provides support and development for this new venture and says that its software is very competitively priced. For a new customer, investment in hardware runs about $3,200 per POS unit and requires a thermal printer and PC. Resort Software’s Ticket Selling Software is priced at $6,000 per POS unit and is supported by Varney’s staff. A version of the ticketing software was recently sold to the state of New Mexico, which will use it for seat selection and ticket printing at stadium events.
What is the total price tag on the investment that SKI has made in information management? “Clearly, between hardware, software and personnel, it’s in the multi-million dollar range,” says Varney. “The older AS400, the one that runs the financial management system, is leased from IBM at about $220,000 per year. That unit, the B60, is now in its fourth year and we’ve invested well over a million dollars in it. The other unit, an E45, is only a year old, and is being leased at $130,000 per annum. It’s not that the second AS400 is less of a system, the cost of the technology declined that much in just a few years.”
With such an investment, does SKI ever have any operational problems with its systems? “There are some areas of vulnerability,” according to Varney. “For one, some of the ticketing data at remote sites is manually input into a POS unit, which creates a diskette. The diskettes get physically delivered to the cash office where they are uploaded into the AS400. Obviously, the diskettes are weak links because they can be lost or damaged, although backup is accomplished with hard disk storage at the POS.” SKI keeps PC technicians on standby at each of its resorts in case any problem does crop up.
Storms can cause their share of problems too, and SKI has experienced power outages and downed communication links between computers located at Mount Snow and Killington. But Varney is prepared for power problems with a back-up uninterruptible power supply or UPS. “The UPS consists of a set of batteries that also act as a front-end conditioner, smoothing out variations in the power supply to the system,” says Varney. His own worst experience was when a disk drive on one of the AS400s went out. Still, total downtime was only about one hour, as IBM reps came to the rescue.
Of course, there is always the potential problem that SKI or any resort operator faces when investing in computerized integrated information management — hardware and software is changing at a rapid pace. Keeping up with the technology and adding new components into existing systems creates the challenge of compatibility and the development of new linkages.
What does Varney see as the next step in SKI’s ongoing commitment to information management technology? “Prioritizing, we have several systems, one which is completely automated, and then, graphic displays of the topography of the mountains at the three resorts,” says Varney. “The graphic displays will be used for customer servicing, management review and scheduling.” This could happen sooner rather than later.
