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Things to Remember before a Technology Upgrade.
By Solomon James
Monday, 5th December 2011
 
Technology is becoming a key driver in the hospitality industry, and is influencing the way hotels manage their property and service guests across segments.

Hoteliers sensitive to competitive pressures are quick to realize the business benefits of investing in technology and assign pride-of-place to technology while considering up-gradation. Some of the technology changes being adopted include:

  • Automation to optimize human resource – as India has one of the highest Room to Staff ratio in the world
  • Optimizing maintenance spends – as nothing is more expensive than maintaining out-dated technology
  • WOWing the guests – by adopting numerous interactive technologies
Aligning Technology to Business Goals

Existence of technology silos, and the consequent friction among technology components leads to increased maintenance costs and sub-optimal returns. The ad-hoc expansion and adoptions of technology by the hospitality industry has left the IT map in most of them amoebic and disjointed. A growing number of hospitality properties have since noted the benefit of aligning their technology needs to serve the strategic goals of their business and the need to upgrade technology thoughtfully and in a planned manner.

For any typical IT up-gradation exercise to be successful, the following three simple phases need to be kept in mind;

Audit: This phase starts with taking a comprehensive asset inventory. One major advantage this leads to, and that your CFO can't miss, is the optimization of IT support cost.  In an Audit exercise for example, IDS NEXT points out to clients that their maintenance costs at times are higher than replacements costs. A typical candidate here happens to be telephony, a technology that has seen a sea change in the last decade. Each asset should go through the below grill:

  • Is the original requirement that this asset served still valid?
  • If yes, is this asset/ service the best way still to serve that purpose?
  • If no, how can we re-deploy the asset to serve a more current requirement? Some assets render themselves to be re-deployed with some minor alterations and upgrades.
Audit is not all about assets and applications. It has a lot to do with users and managers too. One of the basic functions for an auditor is to understand key IT related issues faced by users to ensure the same is not faced after upgrade. It is essential hence to choose auditors who are familiar with hospitality as a domain and can relate to users at all levels in the latter's lingo. A good audit report should include a department-wise Gap Analysis.

Align IT with Business Goals:  This is a toughie and needs top management bandwidth. One can start with high-level objectives like bringing Room to Staff ratio below a targeted threshold. To be effective, however, more granular and department level objectives need to be addressed like decreasing Waiter to Bill ratio to a given threshold, reducing time to serve etc., this is where the department – wise Gap-Analysis comes in handy. Objectives can also be abstract like providing personalized service and enabling mobility to staff. A set of fine tuned, mutually agreed objective statements will anchor the next phase and all future IT investments.

Upgrade: This phase starts with comprehensive solution architecture. Once the solutions architecture and investment outlay is finalized, the rest of this phase is handled at the operational level. Standards like ITSM, have well laid out structures for RFP floating, vendor selection and SLA Right vendors. It is also important to re-evaluate contracts, especially the in-house/outsource decisions.

Decisions taken a few years back may not hold good anymore, so before a contract is renewed, it is important to ensure that the arrangement brings the best benefit. Take Wi-Fi for instance – Hotels outsourced Wi-Fi infrastructure, bandwidth and support to third-party providers with a revenue sharing arrangement. With declining bandwidth and rising expectations of complementary internet connection, is this still the best arrangement?

Pacing the upgrade is also a very key component. Over-night upgrades are  risky and downtime is a hazard hotel can ill-afford. A 12-month plan to upgrade is minimal, an 18 to 24 month plan is ideal. Apart from providing an easy pace to provision budgets, a well phased plan can use off-seasons and lean patches to squeeze in cut-over schedules with minimal service disruptions.

Professional help in program managing an upgrade can help in marshalling through the process. They bring with them a pair of fresh eyes and are usually experienced in models like TOGAF or FEA that will help stakeholders move from abstract to physical without much compromise on the original objectives.

Older hospitality properties are keen to prove that they are an equal match to their newer technology savvy counterparts. Investment in technology, not only, creates ample opportunities for older hotel properties to optimize costs it also helps them focus attentions on the most important element of the ecosystem – the guest.

Solomon James - Vice President – IDS Networks Group
Experienced in the field of Technology and Communication, James has close to a decade of experience in solution architecting and IT strategy. This MBA in Marketing has served with Datacraft and Avaya Global Connect before joining IDS. With extensive experience in leading large scale Hospitality, Healthcare and Public safety projects, leading Avaya Global Connect's foray into the Hospitality & Healthcare spaces, James' industry acumen is his forte in his new role as Vice President of the IDS Networks Group.


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