Slippery SlopeBy Tom Steinert-Threlkeld | Posted 2003-12-01 Email Print
A meltdown of the ski-resort operator's payroll system could not have come at a worse time. The resort was gearing up for winter and the travel industry already was in a slump. A technical queenwith some additional helpstraightened out the mes
The new time-and-labor system from PeopleSoft that she had implemented was being verbally trashed. Managers of the top-flight ski resorts her company served were not happy. Their computers were hanging up as they looked at the system. They could not easily compile reports reflecting the time worked around a resort by each employee. They couldn't even find the "Delete" button.
"They were passionate" about their problems, Silvera says. And she had no recourse except to end the pain.
Getting payroll wrong is not an option at Vail Resorts. This is a business that runs five out of the top 15 luxury ski runs in North America, from Vail itself to Breckenridge, Beaver Creek and Keystoneall in Coloradoto Heavenly, on Lake Tahoe, astride the border of California and Nevada.
Every fall, Vail Resorts goes into a "period of the frantic dithers," according to Andy Daly, president of the resort operator at the time of Silvera's siege in October 2001. In the space of six weeks, it hires 8,000 employees, including 800 new managers, for the winter ski season. Come spring, the "dithering" works in reverse: The resorts let go the same thousands of workers and hundreds of managers, in about the same amount of time.
Processing the payroll correctly is critical to each resort's profitability. Labor amounts to about 40% of expenses, according to Dalythe largest single day-to-day controllable expense of each lodge and ski mountain.
The siege could not have come at a worse time. Vail was in the midst of the dithers, gearing up for the critical winter months. If resort managers can't calculate paychecks, "you can't pay your employees,'' Silvera says.
Compounding the problem: Expectations were high. Vail had just come off a record year, reporting net income of $13.6 million on revenue of $543.8 million for the 12 months ended July 31, 2001.
Yet, all of a sudden, the travel industry was experiencing turbulence. Airplanes had struck the World Trade Center in New York and the Pentagon in Washington, D.C., just a month earlier. Customers who flew in were about to stay home in droves. The resorts were about to depend on their lowest-margin customersin-state customers who drive in for a day.
Fixing the payroll problems fell to Silvera. She, after all, had gotten the company into the overhaul and consolidation of its disparate human-resources and payroll systems in the first place.
Within the ski industry, she was known as something of an ERP queen. She earned her stripes deploying enterprise-resource-planning systems at the Northstar-at-Tahoe resort of Booth Creek Ski Holdings, a company started in 1996 by former Vail Resorts chairman George Gillett. She eventually converted all of Booth Creek over to a J.D. Edwards system.
That caught the eye of Vail Resorts, where Daly and chairman Adam Aron, former chief executive of Norwegian Cruise Lines, were trying to instill business discipline after buying the Breckenridge, Keystone and Arapahoe Basin resorts in 1997 and taking the company public.
Quite a peak for a woman who had started out by applying for a job at the day-care center at Northstar-at-Tahoe in the early 1980s. She wound up as an administrative assistant instead. One job: acting as the backup switchboard administrator, which turned out to be her technical breakthrough.
When the resort put in its own switch, she also became the backup telecom administrator and had to learn how AT&T private exchanges worked. Later, when the leisure spot went from owning one personal computer to five, she became the support desk. After that, she learned not just how the IBM Personal System/1 worked, but IBM's AS/400 servers, as well. An information-systems career was born.
But, almost two decades later, that career looked like it might just come crashing down unless she could right the deployment of the PeopleSoft software that she had championed. Heading into the crucial Christmas season, "it felt really like flying blindfolded," Daly says now. There was no handle on the number of hours being worked each day and by whom; total payroll was basically guesswork.
Chief financial officer James Donahue convened a "come to Jesus" meeting in October, as Daly recalls it. And coming out of the meeting, Silvera set out to identify precisely where the problems in the system were. Instead of telling resort managers what to do, she listened.
She conducted a dozen focus groups, three at each of the four resorts the company owned at the time: Vail, Breckenridge, Keystone and Beaver Creek. In each, she heard from at least 10 and sometimes as many as 20 key managers and administrators.
One of the most visible problems was the easiest to fix. Computers running the PeopleSoft application weren't actually crashing. Instead, they were having trouble with the Web-based system. Desktop machines running the Windows 95 operating system were "timing out" while trying to get information via the Internet Explorer browser.
That amounted to just 5% of the 2,000 desktops in place. But, naturally, th0se machines belonged to working managers"the guys running the resorts," Silvera would find.
Replacing the hundred machines was easy. Fixing problems that mattered monetarily was more difficult.
The key fix: Consolidating the hours worked by each seasonal hire. A single employee might work for as many as three different operating departments of a resort, each at a different pay rate, from the restaurant to the lodge to the ski facility. The time worked each day for each employer had to be combined into a paycheck for a single period. Easier said than done.