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The Organization

Carzonrent is one of India's largest car rental companies with over 5,000 cars and operations in 13 cities. It offers end-to-end, long- and short-term car rental solutions to individuals and corporates but is also well known for spearheading the organization of the car rental sector.

But back when Carzonrent launched in 2000, the taxi business in India looked very different. It was disorganized and had none of services that consumers have come to expect today including reservations systems, call centers, and polite, punctual drivers. "A few years ago," says R.K. Vij, CEO, Carzonrent India, "India had only metered or non-metered taxis. A non-metered taxi was called 'rent a car' but it was not really the same thing." The company wanted to change that. It wanted to build a technology-driven, nationally networked car rental company and re-shape the industry.

The Business Case

But before it could get there, the company first needed to change the way the sector - and it - did business. Bookings, for example were, managed manually over the phone, or via fax and e-mail, all of which led to bloated costs and lengthy lead times. Customer invoicing was also done manually, which also resulted in increased operational costs. Worse, the company's standalone applications were not integrated with its payment gateway, giving it little control over payments and cash flow.

"Traditionally, players in the industry used paper registers for reservations," says Vikas Marwah, COO, operations, Carzonrent, alluding to a problem that defined the sector's pandemic lack of refinement. "We decided to break from this league because we were an organized enterprise and wanted to set some new ground rules."

The prevailing decentralized approach also impacted Carzonrent's ability to use its fleet of cars optimally. Different locations ran their own cars separately, making reservation tracking impossible. Rajesh Munjal, head-IT, Carzonrent, witnessed how these  inefficiencies are into Carzonrent's revenues. "Our cost per reservation was prohibitive. And credit cards were charged post-service, which resulted in huge revenue loss," he recalls.

The Project

The need to fix these issues formed the first glimmers of project INSTA, a Web-based platform that was commissioned in 2008. The project's immediate mandate was to be a sophisticated online reservation management and billing system. On the reservation front, it would give the rental company's customers a way to book themselves cars on their own. And on the billing front it set out to create an integrated payment gateway which would enable the pre-authorization of payments (at the time of reservation) and full charging at the end of a rental. But the system needed to do this across a gamut rental types including chauffeur driven cars, self-driven cars, and cars used for airports drops, among others. It also needed to be scalable and provide real-time information to all the company's offices including the allocations of cars, invoices, and collection.

The First Steps

If the car rental business looks simple from the outside, it is actually quite complex due to of a number of permutations in client requests. "Every individual unit offers different packages to meet customer needs. We had to align the application with all those needs," says Munjal.

This forced him to build multiple functionalities in the system. These included functions that allowed users select their own service and batch requests from corporates, and functions that enabled pre-authorization and online charging of credit cards. Other modules dealt with services that were specific to individual units or customer needs and some to support the business. These challenges were accompanied by a significant change management test since INSTA needed to be implemented at all the company's locations. "Convincing the frontline and operational teams on the benefits of a Web-based reservation system was tough," says Munjal. "It was like changing the way car rental business works. Operations were happy using physical registers and standalone applications." Over time Munjal and other top executives rode past these speed bumps allowing for the implementation of INSTA in a phased manner. Today, it is used at over 50 locations including contact centers, branch offices.

The Bottom Line

Carzonrent invested over Rs. 40 lakhs in INSTA but it has helped it improve reservation levels significantly. "This deployment has helped us bag very prestigious global accounts. We've seen a 35 percent jump in business volume, while being able to reduce operating cost drastically," says Munjal.

It has also resulted in a substantial reduction in communication costs, greater control over the business, and more efficiency. "INSTA helps us with the yield management of our fleet. It helps us frame our pricing policies and fleet usage practices. We have been also able to achieve higher productivity with the same manpower," says Munjal.

INSTA also opened the door for more possibilities. "Over time, we integrated the payment gateway with MasterCard, Visa and American Express. This has provided a cutting-edge to our business. Customers can log on to our micro-site and get direct car allotment or retrieve their invoices and account statements. There is greater transparency," says Marwah.

And in the long run, it's helping the company live up to its promise to re-define the industry.

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Carzonrent Defines Industry Standards Using Web Business Integration

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Issue Date: January 12, 2010