Thomas Cook has abandoned its long-term and company-wide tour operating reservation system, a move confirmed today in delayed annual results which revealed a wider cost write-off of £428 million.
The announcement puts an end to a long-running debacle which included the collapse of the UK-based BlueSky Technologies two years ago at a critical point in the first delivery of the so-called Globe project to put the reservation system of every Thomas Cook tour operating brand on a single platform.
In the delayed annual results for the year ending September 2011 released today, Cook says £86.3 million of its financial write-off relates to "historic costs associated with a long running major IT project".
The wider £428 million figure relates also includes "impairment of goodwill in our UK and Canadian businesses".
It is still unclear the total costs incurred by the failed reservation system project, although a string of people familiar with the programme over the past 12 months have put the project well into six figures.
An official says:
"Over the past five years, we've continually reviewed the development of an integrated tour operating platform across the business. Compared to when the project was initially scoped, Thomas Cook is now a totally different business with many brands and tour operators with specific IT needs.
"As a result, the increased costs, time and risk now far outweigh the potential benefits of the project."
The announcement comes as Thomas Cook prepares for another round of retail shop closures, restructuring and job losses, amid high losses during 2011, £398 million for the 12 months ending September this year, despite a 10% increase in overall revenue.
The company says it will close around 200 "under-performing" shops within the next two years but invest in its online offering, including relaunching its websites "in time for peak trading".
It expects to see the total number of bookings made online increase to 40-50% over time from the current level of 25%.
The Globe project will no doubt enter folklore as one of the most problematic IT programmes in travel tech history, with millions spent on consultants, in-fighting amongst executives and, today, the eventual axing of the entire scheme.
A number of companies were invited to pitch for the project in the mid-2000s, with BlueSky winning what was seen at the time as a flagship project for the company but a massive undertaking for both it and Thomas Cook.
It has since emerged that at least one large travel tech company declined the opportunity to run the project - and told Thomas Cook as much - as it believed the job was simply impossible to do, given that the tour operator had a myriad of brands on different and very complex systems, each with their own vastly different requirements.
Despite the warnings, Thomas Cook went ahead with the programme and pretty much came into difficulties within the first year as BlueSky and Thomas Cook's then-IT provider IBM fell out over delivery schedules and integration.
Disagreements at board level then came as costs spiralled, leading in September 2009 to the collapse of BlueSky and a switch from IBM to Capgemini as its main IT provider and consultancy.
Despite the dismay which the project appears to trigger from many of those involved in it, internally and externally, very few have spoken publicly about it.
Perhaps the only senior executive to have since hinted at the differences in opinion over strategy is Russell Gould, the company's former-ecommerce director.
Speaking at a conference in September this year, he made a general but pointed remark about travel technology projects:
"It’s about lots of little agile developments every month, because if you start to build a new platform it will cost a fortune and be likely to be redundant."