| The information-intensive hotel industry has | | | | preferences. |
| discovered IT is critical at all points of the | | | | Today, technology advances give us the ability to |
| business chain | | | | connect the different islands of information and |
| Back then, making travel plans involves many | | | | enable us to understand what works, what |
| processes. You call up your travel agent and she | | | | doesn't, who customers are and what their buying |
| supplies you with a list of possible hotels, room | | | | patterns are. The Internet has become an |
| availability, rates and special offers. You pick the | | | | accelerator for the adoption of sophisticated |
| date for the trip and confirm your hotel | | | | technology that will enable the delivery of greater |
| preference. She then makes the booking through | | | | customer service and higher productivity. |
| the computer system and off you go. Behind the | | | | The Internet and VPN have allowed the |
| scenes, she sends a confirmation fax to the hotel | | | | connection of different systems, bringing the data |
| with your details. At the receiving end, the hotel | | | | back into a central repository and be able to |
| will enter your details into their computer system. | | | | understand what it all means, in real-time. |
| When you arrive at your destination and you | | | | Lifecycles and priorities |
| check-in at the front desk, the hotel staff verifies | | | | "Those hoteliers who view technology as a cost |
| your reservations, assigns you the room and | | | | center and afterthought to the successful |
| hands you the keys. | | | | operation of any property risk becoming out of |
| Fast forward to today. Technology has caught up | | | | touch with their customers. More dangerous, |
| with the industry. As the travel agent issues a | | | | however, is that those who don't recognize and |
| confirmation to your hotel about your reservation, | | | | exploit today and tomorrow's technologies for |
| the global travel distribution system (Amadeus, | | | | their competitive advantage will quickly be |
| Galileo, Sabre or Worldspan) will connect to the | | | | overtaken by those who do," added Hartmann. |
| hotel's back office and make the appropriate | | | | But just as Hartmann is right in his assessment of |
| entry, minimizing error and ensuring accuracy of | | | | how business managers look at technology, CIOs |
| customer's details. | | | | like Izaks must continue to grapple with the issue |
| Hotels have also adopted a more sophisticated | | | | of technology lifecycles and priorities. In good |
| system for tracking customer information. Hotels | | | | times and bad, budgets remain a constant in the |
| now use data warehouses and data mining tools | | | | life of a CIO. |
| to better understand their customers' individual | | | | Identifying the business priorities, evaluating and |
| preferences. | | | | recommending one standard for the organization, |
| The Internet is used to communicate to their | | | | and sticking to what's been given budget approval |
| business partners -- travel agencies, airlines, | | | | are part of the challenge. Advances in technology |
| government tourism boards, cruise liners, car | | | | offer numerous temptations to throw out what's |
| rentals and global distribution channels -- and | | | | been approved. But most hoteliers will agree that |
| provide updates on room availability, rates and | | | | changing the strategy mid-stream is not easily |
| special offers. | | | | undertaken. |
| Competition for a growing class of travel- and | | | | Technology is changing very rapidly. Things get |
| tech-savvy customers has forced hotels to adopt | | | | replaced faster with each refresh and the rate of |
| the latest technologies to ensure that partners | | | | will even be faster in the future. Just as |
| are updated on the current hotel developments. | | | | technology is an enabler of new business, it is also |
| The Internet has spawned a new segment of | | | | becoming an inhibitor. Izaks laments that the |
| customers who use the Web to scout for hotel | | | | inhibitor then becomes getting the right technology |
| rooms and seek weekend bargains. | | | | into the business, even as that technology cycles |
| Key component | | | | through faster than our ability to integrate it in. |
| Chris Hartmann of global hospitality consulting firm, | | | | "This presents a challenge for the CIO: being able |
| HVS International, said the technology used in the | | | | to identify the technology we need, as opposed |
| hotel industry has evolved. "To look at the state | | | | to what we'd like to have, and allocating budget |
| of technology in hotels and resorts today, it's | | | | for it. We have a five-year budget cycle where |
| important to understand that 'technology' today is | | | | we look at the technology we purchased last |
| not simply a network infrastructure, computers | | | | year and track its depreciation on our books. At |
| and the IT department. Technology is a key | | | | the same time, we look at our business needs |
| component of every aspect of hotel ownership. | | | | today and start preparing for technologies we |
| Management of, and a comfort with, today and | | | | might need three or four years into the future. |
| tomorrow's technology is necessary in every | | | | To keep this picture top-of-mind as we work our |
| department," said Hartmann, who leads | | | | annual budgets makes for challenging budget |
| technology strategies for HVS. | | | | planning cycles." |
| Technology investments require well-defined | | | | The hotel industry, like others in the hospitality |
| objectives aligned with overall business strategy. | | | | business, is in a constant state of battle readiness. |
| Whether it is a hotel redevelopment, acquiring or | | | | The two gulf wars, SARS, avian flu, and the |
| repositioning hotel assets, scores of decisions | | | | Asian financial crisis have forever changed the |
| require technology insight and operational | | | | way the industry looks at its future. |
| understanding. Failure to take into account the | | | | The industry is accelerating the adoption of |
| importance of technology at the onset will result | | | | technology to reap the benefits it has to offer in |
| in substantial costs associated with retro-fitting, | | | | the shortest possible time. The challenge for |
| last-minute implementations, and ongoing | | | | managers like Izaks is to stay abreast of the |
| operational challenges resulting from poorly | | | | changes, keep an open mind to the future, and be |
| selected systems. | | | | prepared to lead every day, 7x24. |
| CIOs believe that the business of running an IT | | | | Convergence in a hotel suite |
| organization has changed significantly from what it | | | | Thanks to the mobile phone, guests today avoid |
| was ten or 15 years ago. Shane Izaks, general | | | | using the hotel's phone system to place |
| manager, information technology at the Hong | | | | international calls, causing a fall in hotel |
| Kong and Shanghai Hotels Limited (best known as | | | | communication revenues. Because of this hoteliers |
| Peninsula Hotels) said to be an effective CIO | | | | have come to regard their voice communication |
| today, you need to understand the business you | | | | infrastructure as a cost center rather than a |
| are in to get business units to buy into your ideas. | | | | profit center. In addition, with more business |
| High expectations | | | | travelers demanding for Internet connection in the |
| "You not only need to understand hardware and | | | | room, hotels have invested in data networking. |
| software from a systems point of view but from | | | | But for how long will hotels keep spending on two |
| also from a business point of view. This is how IT | | | | different networks? |
| is able to drive the business. Technology and | | | | Shane Izaks believes that convergence is |
| processes have matured in complexity to the | | | | inevitable. "The Internet presents opportunities to |
| point that understanding the business is | | | | introduce new ways to enhance customer |
| paramount to ensuring the successful integration | | | | experience and thus differentiate ourselves from |
| of IT into the business. The CEO, CFO and COO | | | | the rest of the industry." |
| have high expectations of the role that | | | | Communication technologies allow a certain yet |
| technology plays in the business of running a | | | | needed differentiation, by offering more and more |
| hotel," Izaks said. | | | | personalized services to this new wave of guests |
| Today's business unit manager, CEO, and his | | | | coming from China, Korea or Russia. Therefore, |
| management team - CFO and COO - understand | | | | hoteliers are looking at building up their |
| the importance of IT and expect the CIO to | | | | competitiveness by improving guest services, |
| understand the business so that there is a tighter | | | | increase staff efficiency and maximize their return |
| integration of technology into the business. The | | | | on investment. |
| technologies today are much more complex and | | | | Marc-Alexis Remond, director of marketing and |
| the resulting integration makes for a more | | | | business development at Alcatel, points to three |
| successful alignment of technology to business. | | | | beneficiaries of a converging network. |
| Izaks says the question is not whether | | | | "Hotel guests want personalized services, fast |
| technology is sophisticated enough to match the | | | | answers, first call resolution and access to |
| business process "The real challenge lies in the IT | | | | advanced communications and entertainment |
| team's ability to understand the interdependence | | | | applications. Hotel staff and executives need |
| of IT and business, and to build processes that | | | | mobility and collaborative solutions that keep them |
| would allow for the symbiotic co-existing of two | | | | connected and available, with access to |
| different but interdependent systems," he adds. | | | | information, in real time and easy interactions with |
| Years ago, hotels had isolated islands of systems | | | | guests and colleagues. |
| that didn't talk to each other. No one had a single | | | | "Everyone wants a highly reliable data and |
| view of the business; financial systems, CRM and | | | | telephony solution that provides consistent user |
| bookings were on different systems that didn't | | | | services across the enterprise while benefiting |
| talk to each other, and data was often rekeyed in | | | | from the maximum operational cost savings for |
| to spreadsheets to make sense of it. This was | | | | the minimum investment." |
| the only way for hotel chains with properties | | | | The trick is to identify the right technologies and |
| located in many parts of the world to have some | | | | applications and find vendor-suppliers with a |
| picture of what the overall business was like. | | | | strategy for deploying enterprise IP telephony |
| At that time, no-one was able to know in | | | | solutions over any data network (LAN switches, |
| real-time precisely what was happening in | | | | routers, etc), whether provided by themselves or |
| properties within the hotel chain, how the business | | | | a third party. Staying with standards-based |
| performed during particular periods, or was able | | | | solutions will mitigate the risks of vendor lock-in. |
| to view and share customers' profile and service | | | | |