The hotel industry has survived the most dramatic downturn in its history. With a recovery well underway, hoteliers are launching new business initiatives that rely heavily on information technology to drive business growth and profitability.
The challenge is that over the last three years, Hotel IT staffs were reduced, budgets slashed and projects deferred to weather the financial storm of the great recession.
Unfortunately, over the same period, there was also an unprecedented leap forward technologically with cloud computing, mobile technologies and social computing technologies all entering the mainstream.
The result was a more technically savvy guest with increased expectations pitted against a hospitality industry that was struggling in survival mode.
A gap materialized between hotel industry business priorities and IT priorities. Hoteliers will be spending the next three years closing that gap.
With hotel marketing departments, operations groups and information technology teams all seeking methods to advance divisional initiatives, the key question becomes who is responsible for bridging this gap and how can these diverse organizational objectives be aligned?
Amadeus IT Group engaged RockCheetah to explore how hotel companies can align business and IT strategies to drive business transformation during a period of economic recovery; specifically, the three year time period from 2011 through to 2013.
A proposed solution is the identification of an IT Pathfinder.
The white paper provides an overview of the current industry hospitality environment and key business drivers to provide insights into how hospitality executives can bridge business and IT objectives. The report draws on desk research, a global survey and executive level hotel interviews to reach its conclusions.
Below is the white paper’s executive summary:
Transform Your Growth Strategy Now – Remove Barriers Between Hotel Technology, Marketing and Operations
Economics, Technology and Guest Empowerment Collide
The combination of constrained budgets, technological advancement and consumer empowerment between 2008 and 2010 presented challenges for the hospitality industry, but with the current recovery underway, opportunities now abound. Hotel IT environments are poised for transformation with cloud computing assisting hotel companies turning toward asset-light operations.
Broad consumer adoption of mobile computing technologies, social networking and location based services have given hotel guests tools to communicate marketing messages that are more trusted than traditional forms of advertising.
Fusing Business Needs and IT
- Aligning Business and IT Priorities
Like most organizations, hotel business leaders are focused on discovering innovative methods to grow, attract new customers and reduce costs. Similarly, hotel IT leaders are also prioritizing cloud computing, virtualization and mobile technologies. However, hotel IT leaders are attending to core central and property system platforms before following other industries in developing
collaboration and web 2.0 initiatives.
- Identifying Key Business Drivers and the Enterprise Value Chain
To bridge business objectives and IT objectives, a common vocabulary is required to open lines of communication across business units. Outcomes must be material results from clear actions and ideally reflecting measurable economic value. External growth and internal efficiency business drivers should relate directly with the customer value chain to maintain consumer focus.
- Defining Strategic Hotel Business Priorities
Hotel business leaders are seeking to expand their property portfolios by growing room counts and expanding into new territories. Brand development also rates high as a priority – both the repositioning of existing brands and the launch of new brands. Additionally improving guest satisfaction and improving operational efficiency are interrelated for hoteliers as both share the goal of enhancing the guest experience.
- Defining Strategic Hotel IT Priorities
Hotel information technology leadership is prioritizing enhancement of core CRS and PMS platforms while strengthening direct distribution channels. From an infrastructure perspective, virtualization of systems, with migration to cloud computing and SaaS to increase security, reliability and scalability head the list of key goals.
The IT Pathfinder
By establishing the role, function and approach of the IT Pathfinder, hospitality groups may gain greater alignment between corporate business and technology objectives, identify appropriate solutions and implement the initiatives that create the greatest economic value. The IT Pathfinders are tasked with three fundamental tasks: understanding how the operating environment impacts key business drivers; linking IT initiatives to corporate strategy; and road-mapping methods to create economic value from IT initiatives.
- Getting the Ideal Infrastructure in Place
Hospitality executives on both the business and IT sides of the operation do not perceive infrastructure solely in the realm of hardware and software. There is also a highly perceptive acknowledgement of the importance of experienced management personnel to oversee the design and support of the platforms. Hotels interested in virtualizing systems are also seeking superior technical support of mission critical systems.
- Understanding the Essential Deliverables
The sentiment that IT Pathfinders must “speak business to business people and technology to tech people” was shared by several leaders. For hoteliers, it was essential that IT Pathfinders
ensured delivery of core platforms and planning processes for the organizations to be successful.
- Quantifying Business Impact
A holistic approach to measuring performance is preferred by hoteliers. While business impact must be benchmarked against measurable statistics, hotel executives sought to reach beyond standard financial performance measures and track guest satisfaction, associate engagement, owner adoption, and technical service levels to provide a comprehensive perspective founded on measuring the economic value of various initiatives.
Ensuring Business Transformation
Every hospitality organization is different, with different product portfolios, competitive positioning and shareholder objectives. As a result, IT Pathfinders cannot rely on a one-size fits-all approach to establish the optimal IT roadmap for a property, brand or management company.
- Eliminating Dangers
While hoteliers cited future economic disruptions as a potential risk, internal risks were also frequently identified. Most significantly, resistance to change was highlighted by companies as a leading barrier to success, even by individuals that characterized management openness to change as an organizational strength. Strategic and executional failures are also areas of concern.
- Capitalizing on Opportunities
Virtualization, with its promise of reduced data center, payroll, hardware, software and services costs presented a strong value proposition for IT. Mobile computing is seen as an important technology to enhance customer engagement, and most importantly, holding the prospect for monetization due to superior reach, targeting, transaction and viral capabilities.
- Leveraging Organizational Strengths
IT Pathfinders must accurately identify business dynamics and measure their impact from an organizational, staffing and partnership perspective. Commitment to change must be reinforced through the expression of economic benefits that can be shared as a common goal across diverse constituencies.
Aligning business and technology groups is the primary role of the IT Pathfinder. If the Pathfinder function can develop strategies that eliminate danger, leverage strengths and capitalize on opportunities, as measured by economic value, the probability of success is greatly enhanced.
In summary, the discipline of Hotel IT Pathfinders requires exceptional communication and analytical skills, a deep understanding of the organization’s unique value propositions and IT capabilities, and most importantly, a determined, goal-based mentality to provide the leadership necessary to map the course of action that delivers the greatest economic value to the organization.
The complete white paper is available for download here: Transform Your Growth Strategy Now [Free – registration required]
For those attending the Hospitality Financial & Technology Professionals HITEC Conference in Austin, Texas, Monday afternoon June 20, at 1:30pm in Room 10C of the Austin Convention Center there will be a session on bridging the gap between organizational business and information technology priorities. I will give a brief overview of the white paper and moderate a panel of hotel industry leaders, including:
- Flo Lugli, Executive Vice President Marketing, Wyndham Worldwide
- Caryl Helsel, Director Central Reservations & Revenue Management, ARAMARK Parks & Destinations
- Mike Blake, Chief Information Officer, Hyatt Hotels Corporation
To attend the HITEC session, please RSVP as space is limited.