Navigating the process of IT solutions procurement for the hospitality industry. (Part 1)
By Harish Chandra & Jaidev. C
Thursday, 12th October 2006 |  |
Information Technology should always enable hotels and restaurants to reap maximum rewards from minimum investment.
Part one - Supplier selection
Today there are players of all sizes providing IT solutions to the hospitality industry and due to the complex nature of the industry, evaluating and implementing the best technological solution can often prove to be a difficult process for hoteliers.
Business houses should identify their core technological needs before assessing the software that they plan to buy. Many companies make the mistake of buying software before really evaluating their requirements. This methodology is not advisable since it doesn’t allow enough time to prioritize any necessary changes to the application.
Properties should estimate and re-evaluate the following in planning the requirements of a Hospitality application.- Standard operating procedures (Operations Vs Systems)
- Company strategy and plan
- Strength, weakness, opportunities, and threats (SWOT)
- Key management and data input requirements
- Organizational financial reporting
- Future budgets and growth
It is important not to confuse what you 'want' and what you 'need'. Many applications provide various options that hoteliers later realize to be more fancy than useful. Instead of providing all the basic required features, application providers use these fancy features to lure the customer into making a purchase decision.
The following are a set of guidelines, which can assist hoteliers in selecting an application. It can be broadly classified under two criteria. Supplier selection - hospitality application solution provider and/or its local dealer. Technical considerations - about the hospitality solution itself. Credentials
The credentials of the hospitality solution provider and its system installer should be closely analyzed. The application installer is a person whose main objective is to make sure that the system integration goes according to plan, and is well suited to the users needs.
Trainers should have the combination of sound IT knowledge along with clear understanding of hotel operations. An emerging trend in some of the major hotels chains is the procurement of the details of past hotel work carried out by various installation vendors and installers followed by full analysis before making any vendor decisions.
Application demonstration
The hotelier should request a demonstration of the application from the vendor. The operational executives, system manager and representatives from the finance and accounts departments should attend this demonstration. Typically, the vendor will attempt to paint a glowing picture of the software, highlighting only the strengths. Potential flaws are only likely to be discussed if questioned directly and occasionally even operational integration is overlooked. Prepare yourself with a list of your well-defined requirements to cross check the application during the demonstration. Be aware that the vendor may use scare tactics, spreading fear and uncertainty to grab the business. Don’t trust the salesman's pitch until he can validate his claims. In many cases we buy the salesperson and not the product. There should be a representative of the hotel at this demonstration who technical enough to see through the maze.
Vendor stability
The stability of the vendor and his ability to provide 24-hour technical support throughout the year should be stressed. There are instances where companies have installed and supported properties only for few years before closing their operations, leaving the hotelier looking again for a new vendor or product. Major IT solution providers gain an advantage over some of the smaller vendors in this regard due largely to a larger support network and an ability to provide a track record in the market.
Support offices
Obtain the details of the various support offices made available by the vendor. This point is important since many solution providers just have one or two offices in the country. Since most of the hotel applications are mission critical and revenue generating, a quick and responsive technical support is essential for the smooth functioning of hotel operations.
Case: - A hotel located in a remote tourist destination experiences an application and systems related problem and unfortunately the solution provider doesn’t have a local support office.
This situation can be handled only by two ways. Either by using a remote utility/application e.g. "PC Anywhere" or "Carbon Copy", or the company sending a support executive by the fastest available mode. Depending on various factors such as size of the property and business volume, the down time of the application should be minimized by the vendor, since it is crucial for the property to generate the regular key Management Information System (MIS) reports. In most cases, the property would be liable to sponsor the travel, board and lodging charges in addition to many other expenses incurred by the technical support executive during their stay. This can become an unexpected and substantial expense in comparison to the budgeted annual IT expenditure.
Prevent wastefulness
Stay away from over buying to prevent wastefulness. In some cases, vendor’s software implementation proposal contains unnecessary computer peripherals and software. Clearly identifying your needs prior to purchase would solve this issue. Properties easily overlook "hidden costs" when a new application is implemented. The golden rule is that you spend two to three times the cost of software. Identify and evaluate your hidden costs, which could include re-training the staff on the new system, or buying specific system peripherals attuned with the application.
Annual maintenance contract terms
After finalizing the products look deeply into the terms of the annual maintenance contract (AMC) with the technology supplier. This could cover hidden costs, type of support offered and conditions of integrating the application with any third party. It has to be closely evaluated to avoid any future misunderstanding. The AMC could be categorized separately for hardware, software, office hours, 24-hour coverage etc. The scope of work to be undertaken by the application provider and their accountability should be clearly discussed and contracted.
Single vendor concept
As far as possible, try to procure your entire system related inventory from one vendor, otherwise it becomes difficult if a fault occurs to identify who is responsible for rectifying the problem. Due to the complexity of current systems, faults can appear to overlap between various applications.
Case: A front office printer fails to print. Now whom would you consult for support – The front office application provider, hardware vendor, OS vendor or the Network vendor?
If all the systems were purchased from the one vendor a single phone-call to the vendor's helpline should start the process of resolution. For larger hotel installations this point is often impractical. Properties with bigger systems to install approach different vendors to fulfil their hardware, software and networking requirements. If this is the case, ensure that there is proper co-ordination and communication between these vendors. The scope of work that each vendor is responsible for should be clearly defined in the contract to avoid any mismanagement of projects. In many cases it has been observed that vendor’s misunderstanding hinder the installation process and support later. Properties should organise constant meetings between all involved IT vendors and mark the progress of the project. Finally, they should obtain (preferably in black and white) the liability concerning with vendor in various technical aspects.
Next concluding part of this report, focus is on the procurement of IT solutions for the hospitality industry from a technical perspective.
This article was written by Harish Chandra and Jaidev C during their tenure with KIT as ‘Consultants and Installers of Micros-Fidelio products’. KIT is a large IT company in Dubai and dealer of Micros-Fidelio hospitality solutions for the complete Middle East region. This report is a part of an independent study and evaluation of their past experiences. With both hospitality operations and information technology exposure they wanted the report to portray a different and versatile picture.
For more information please contact:
Harish Chandra
Area - Information Systems Manager
Le Royal Meridien - Mumbai, India
Mobile +91-9892300057
E-mail:harish_doon@yahoo.com
Jaidev. C
24/7 Customer
Bangalore, India
Ph :+91 80 36875058
E-mail: jaidevc@hotmail.com | 
