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Business intelligence lifts revenue at Ontario ski resort

A Winter's Tale: Blue Mountain Ski Resort is using a cool business intelligence tool for everything from changing how it pays ski instructors to adjusting room rates and scheduling housekeepers.

Winter did a number on the Blue Mountain Ski Resort this year. December came and went with no snow to speak of; 1,300 seasonal employees spent the Christmas holidays at home. But when the manna finally fell in mid-January, the Collingwood, Ontario, resort was ready to make the most of the shortened season, thanks in large part to IT.

Using business intelligence (BI) tools, Blue Mountain has changed the way it operates, from paying employees and determining room rates to reporting financials to New York-based Fortress Investment Group LLC, its new owner.

Business intelligence gets smarter and richer
Two major trends dominated the business intelligence platform market in 2006, according to a Gartner Magic Quadrant published in January.

First, BI went "well beyond" simply delivering reports and measurements to users in 2006, becoming more process-driven and strategic. Reports and analyses increasingly are embedded directly into the workflow of a business process, Gartner noted. The move toward strategy-driven business intelligence ties BI more closely with corporate planning and performance management.

Second, large software infrastructure and application vendors such as Microsoft, Oracle and SAP AG sharpened their focus and offerings in the BI platform market. The foray by the Big Three could prompt other large systems vendors, including IBM, Hewlett-Packard Co. and Sun Microsystems Inc., to beef up their presence in the BI market. Finally, "flattening technologies," including Ajax front ends, the Multidimensional Expressions query language, in-memory analysis and Excel Services for Office Integration have paved the way for software vendors in general to provide BI, thus eroding the technical advantage enjoyed by pure-play BI vendors.

The sum of these trends is that companies are spending more on BI and using it for more things, from complying with regulatory reporting requirements to measuring system performance. Plus, more people at the company now use BI. Once the province of senior executives and analysts, companies are letting "operational workers," managers and customers in on the fun, Gartner said, all of which signals solid growth in the BI market. Gartner expects BI-related software revenue to grow an annual 9.5% through 2010.

-- Linda Tucci
A big conundrum at Blue Mountain was how to make its snow school more profitable. During the winter season, the resort's 251 acres of skiable terrain and 34 trails attract more than 700,000 skiers, making it the third-busiest ski resort in Canada, after Whistler Blackcomb in Whistler, B.C., and Mont Tremblant in Mont-Tremblant, Quebec. But labor and revenue for snow instruction were rarely on the same slope.

"We could have days when we had large numbers of instructors on the hill and maybe sell 10 snow lessons. So instead of getting a group lesson, everybody got a private or semiprivate lesson," said John Gowers, director of IT for the resort. Good for the customer, not so good for the coffers.

Complicating matters more, ski instructors are a hot commodity in the Blue Mountain area, so the labor-to-revenue ratio problem was not going to be solved by being cheap. "There's a lot of competition in the area and a lot of incentive to rob these instructors away," Gowers explained. "We need to make money, but we also need to pay our instructors appropriately."

IT took on the rescue mission and found a "cool business intelligence tool" from Applix Inc. in Westborough, Mass. The tool let Blue Mountain analyze labor costs and revenue and then redesign a pay structure that was tied to revenue and also tied into a complex point system used to determine instructor pay.

Pay is linked to certifications from the Canadian Ski Instructors Alliance (CSIA) and the Canadian Association of Snowboard Instructors (CASI). Blue Mountain instructors also earn points for the number of hours and years they've worked for the resort, whether they have racing or park and pipe skills, how many private lessons they give, and, of course the number of people in their group lessons. (It pays to be popular). Points fluctuate on a daily basis, making it even harder to reconcile pay and labor.

"It's two, three pages' worth of stuff, so there was no way to do it manually," Gowers said. Or to do it easily.

One area where Blue Mountain discovered it was losing money was in the "turnover process." This is the buffer between one lesson ending and the start of another, when instructors basically are being paid to say hello and goodbye.

Blue Mountain lengthened the lessons, thus reducing the amount of downtime during a day. The resort also raised the lesson price, but not as much as the customer would be paying at the old hourly rate -- the "win-win" scenario businesses love to brag about.

More important, by calibrating instructor pay more accurately, the resort has reduced turnover, Gowers said, an important consideration in a small area where the opening of a new Wal-Mart or Home Depot can drain the labor pool.

"It gave us a chance to reward loyalty to the people who stuck with us. Each year they had incentives, so they would make more money the following year. But it also reduced costs, because we didn't have to recruit new staff," Gowers said. "It gave us a competitive edge."

Business intelligence platforms have helped companies build applications that cull and deliver information (see sidebar). Using BI as a strategic tool to help give the business a competitive edge is a big part of what IT should be doing these days, Gartner analyst Mark McDonald said.

"What IT really wants to be doing is changing the way enterprise works, as opposed to just kind of automating it," McDonald said.

Gowers said Applix has been put to work throughout the resort, in large part because of its ease of use. The tool is used for operations ranging from scheduling housekeeping crews to adjusting room rates with the ebb and flow of demand.

Gowers did not disclose how much money the company has saved using the Applix tool, but he said the $100,000 investment (the majority of that in software license fees) has "paid for itself many times over."

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Gowers said user-friendliness is especially important at seasonal businesses like ski resorts, where a new crop of employees comes in each year. In his area, many of the seasonal employees are university students, who come and go, and farmers, who aren't sitting in front of computers for most of the year.

Gowers said he used other BI tools at other jobs. "I found them quite challenging, in the implementation. I also found the user sophistication had to be higher."

At companies that retain employees year round, it probably makes sense to invest in training, but Blue Mountain needed a tool it could teach employees to use in a short time -- this year, a very short time.

Let us know what you think about the story; email: Linda Tucci, Senior News Writer

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