Change. The One Constant.

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June 11, 2015
Feature
Amitava (Chats) Chatterjee

Moore’s Law just turned 50. Is it being challenged? Are we approaching the limits of what we will see?

In 2015, Gordon Moore himself suggested that saturation will be reached – in his words, “dying here in the next decade or so, but that’s not surprising.” Is he correct? Or is there much yet to come? Think back to the computing changes you have witnessed in your personal and professional lives. Fascinating, aren’t they? I still have my father’s first laptop, a 1985 model, and it still works. It has a tiny phosphorescent display, an integrated keyboard, a 300 baud modem, boots with 3.5-inch diskette that needs to be swapped out to use word processing software, and a briefcase handle that makes it portable… barely luggable, but wow, what fun! Luckily for me, my father didn’t want much to do with it and I was happy to take it over and convert his beautiful handwritten notes into submission-worthy drafts of his works. Fast forward to today. Large sections of this article have been written on my tablet, which, despite being two years old and therefore a dinosaur in technology terms, has a beautiful display, a word processor, dictation software and a virtual assistant who takes care of a great deal for me. Today, especially in the personal realm, we take technology advancements for granted. The barrier to entry for new technology is relatively low; all it takes is a bit of convincing and a lot of pain when that credit card bill shows up. Other than that, investing in new technologies for personal use is pretty straightforward. It gets easier still if one stays within the same technology ecosystem (devices within a family generally tend to talk easily to one another and data migration is straightforward). Does this translate as easily in our world?

This article examines how our hospitality industry has had to change in response to the shifting technology landscape. We will reminisce a bit, examine the changes that have occurred, and gaze into a crystal ball. Come along.

Indoctrination
I was first introduced to hospitality technologies in the summer of 1992 during an internship a five-star hotel built to satisfy New Delhi’s desire to be a world-class host of the 1982 Asian Games. Everything about the hotel was cutting edge, down to the black five-line phones with that distinctive ring tone that can be heard in so many of the world’s hotels. The lobby had networked computers – four behind the check-in counter and one sunk into the lobby manager’s glass-covered desk. Staff loved the machines that helped simplify many tasks. The computer center, located in the subterranean recesses of the hotel, was off limits. I will never forget its heavy, imposing door with “MIS” proudly stenciled across it, signifying something special beyond. I was very curious about what treasures it led to. “MIS – computers,” my then-colleague deferentially whispered as we went on a tour of the back-of-the-house areas of the hotel one day. One could do magical things with this system after getting past a steep learning curve but interns weren’t allowed to touch it. I prevailed and was soon given an opportunity to perform basic tasks – looking up local attraction phone numbers, as I recall. Eventually, when they realized that I didn’t crash the PMS or lose the data, they allowed me to do more. I will never forget the day I was finally given permission to interact with the hotel’s PMS, which I grew to love. I even had an opportunity to check in the chairman of the board for the owning company when he arrived in the lobby late one night. Within the next 30 minutes, I built a rooming list, finalizing rooming assignments, handed out room keys and per diem packets to a flight crew. I was flying high. In fact, I was hooked on hospitality technology. Those big, beautiful, green screen terminals tugged at my soul like nothing ever had. I was changed forever. I wonder how the hotel had to change to adapt to the introduction of this new technology. I’m sure the changes spanned infrastructure, processes and obviously technology. Change management must have been key. For one, they had to dedicate a massive room to the computer system itself, which required dedicated cooling and air filtering. This was a data center with a raised floor, special fire retardant extinguishers and a sterile, windowless environment. No one could enter that room except the MIS manager, the hotel’s general manager, and one intern who begged his way in. 

Thou Shalt Standardize
I graduated from hotel school with a bachelor’s degree and a desire to be a chef. However, the prospect of being in close proximity to hotel technology dazzled me and I continued to be wildly attracted to it. My employer at the time was poised to transform the technology in its hotels. I considered myself very fortunate to be where I was and asked to join the corporate technology department. My timing was impeccable since my employer had just formed a joint venture with a leading PMS provider; a decision was made to implement the product throughout the luxury hotel division. My employer was also beta testing a POS solution that was a candidate for chainwide standardization. I was made an installation project manager and liaised with the hotel staff and technology vendors to ensure everything went well. Our hotels had to build data centers in which to house these new technologies. New procedures were adopted; security, tape backup, storage and retrieval, and disaster planning were all covered. A select number of staff went identified to be super-users and system ambassadors, and were sent overseas for advanced training.

The new systems gave us an opportunity for something that was hitherto difficult – consolidated reporting. We recognized the need to standardize rate codes, room categories and other things. Reports were important because they allowed us to see our data in ways previously difficult to achieve. I’ll never forget one day at work when we’d just finished implementing a solution to manage sales and catering. A banquet sales agent was staring at one of the many system-generated reports and asked the banquet manager what it said, to which he dryly remarked, “It tells you that you have implemented a new system.”

Fast Forward
Fast forward to today. Hotel companies have implemented central reservation systems (CRS) with standardized codes, categories, data sets, address formats and a lot more. Property management systems (PMS) and point-of-sale systems (POS) are standardized across the enterprise, or are in the process of getting there. Reservations flow from CRS to PMS along with other relevant stay data and appear where they need to. All this is because of standardization, or data mapping and transformation. Many hotels know about their guests even before they have arrived on property, and they are taking steps to empower their employees with relevant information to aid in delivering excellent service. “Where was I” reporting is giving way to forward-looking, predictive “Where will I be” analytics and scenario-driven what-if analyses. Big data is making its presence felt and companies are starting to grapple with what it means to employ analytics across various touch points with the objective of transforming experiences.

Integration. The New Norm.
In many hotel companies, in the absence of enforced corporate IT standards, it was not totally out of the ordinary to find multiple software development set up alongside each other, with dual training budgets, conference budgets and development tool license fees. Technologies often did not talk easily to one another and interfacing was difficult. Typically, when a key vendor mandated an upgrade, custom interfaces broke, data was lost, resulting in unhappy employees and angry guests. How many of you put off upgrades because of this very reason?

In 2002, an industry association was formed with the objective of helping ease the integration and interoperability among industry software vendors. This association, HTNG, stands for Hotel Technology Next Generation (not to be confused with the ICAO code for an airport in Tanzania). When it started, HTNG had one workgroup and approximately 500 members – today it has 12 workgroups and initiatives, and more than 4,000 individual members, including 74 hotel companies represented, translating to more than 30,000 properties and more than 4.5 million rooms. HTNG and the OpenTravel Alliance have done much to improve integration between hotel systems.

New Roles and New Players
In the 1980s and early ‘90s, the CIO title was common. Underneath this leader, there was usually a team responsible for various systems – PMS, POS, accounting. However, the role of IT is expanding. As technology transforms existing business models and gives rise to new ones, the role of the CIO and the IT organization is evolving rapidly, with integration at the core of its mission. Increasingly, CIOs look for opportunities to harness emerging disruptive technologies for their businesses while balancing future needs with today’s operational realities. They should view their responsibilities through an enterprisewide lens so that critical domains such as digital, analytics and cloud aren’t spurring redundant, conflicting or compromised investments within departmental or functional silos. In this shifting landscape of opportunities and challenges, CIOs can be not only the connective tissue but the driving force for intersecting, IT-heavy initiatives – even as the C-suite expands to include roles such as chief digital officer, chief data officer and chief innovation officer. And what happens if CIOs don’t step up? They could find themselves relegated to a “care and feeding” role while others chart a strategic course toward a future built around increasingly commoditized technologies.

It’s no surprise to many companies that changing consumer technologies are impacting how they run their business, and the hospitality industry is no exception. As guests get more tech savvy and use smartphones, smartwatches, social media and other technologies, they begin to expect similar applications wherever they go. We know that. But as companies – and especially in the hospitality industry – try to connect with guests through more channels, gather more data, and learn more about them, this potentially comes at a price beyond what it costs to be the first to market with a cool new app. The one organization that supports all these great technology advancements – IT – needs to change, too.

The shift to the cloud has been looming for several years. In hospitality, this infrastructure delivery model pushes the core infrastructure and its management above property and frees up time for employees to do what they are meant to d be hospitable. This is a two-sided coin. Hoteliers can employ the same cloud structure to their IT organization if they choose. There are pay-as-you-go service models that can help mitigate risk, provide consistent sources of funding, streamline processes and support standardization. As the focus shifts to security, these same “cloud teams” can be deployed as needed to provide consistent coverage, security and compliance capability.  At a minimum, the IT manager role should be rebalanced to its initial desired function with limited focus on compliance. This takes a great deal off IT management’s shoulders. 

But then there’s the hospitality part. Now that so much consumer-facing technology is being deployed, the IT staff may have to be more guest facing, and can be just as impactful as the front desk or concierge. The person knocking on your door to help you with a guest’s wireless connectivity issues may have to do so more often, or chat on the phone with a guest to understand why their downloaded TV remote app doesn’t work.  These staff will need the people skills to match the guest experience that hospitality companies are looking to provide.
 
As hospitality brands evolve, technology will evolve – likely even faster. Tablets in the room have come and gone, keyless entry is here and now, but what’s next? This presents a challenge for the hotel IT organization. The organization must be structured and staffed with associates who will be able to keep their skills up to date to be able to support the changing technologies. They’ve also got to be willing to accept the changes, and corporate needs to be more forgiving when technologies don’t deliver the value promised. This begs many more questions: How will staff be trained? How will they be compensated?  Which technologies should they support? 

One could argue that the skillset required for on-property IT support can be lowered to reduce regional disparity in role requirements and promote top performers. This may optimize the span of control but there is a balance that must be achieved. The important part is to develop leadership through training programs and groom talent with a clear career path to what’s next. There is also a need to be creative and potentially create staff training programs that allow them to perform dual roles. Since property IT has a large guest-facing component, and, in fact, since infrastructure and applications are moving to the cloud, perhaps a hotel’s front desk ambassador could be the onsite IT manager for that shift, giving him the opportunity to expand his area of influence. The IT organization should be viewed more as brand ambassadors than ever, becoming the secret sauce of the business. How each company proliferates their brand will be different, and that is the exciting part that will continue to evolve.

Influencers of IT Decision-making
Multiple forces are continually acting on hotel companies and their IT departments. Pause to think about key industry stakeholder groups including guests, employees and franchisees. All of them play an influential role in a hotel company’s technology decision-making. In addition, third-party OTAs, the rise of new entrants and new channels for engagement transform the demands placed on a hotel company's IT department.

Some of the key influencers of technology decision-making are as follows:

  1. Guest experience – a transformative guest experience is becoming key and companies are starting to invest in differentiated experiences with the objective of creating stickiness.
  2. Excess capacity – as hotel companies grow, excess capacity is always a concern, and this gives rise to a need for the ability to create offers and deliver targeted campaigns. Dynamic packaging and bundling is also coming to the fore as guests seek experiences.
  3. Social presence – we have already discussed this but it merits a second mention, the rise of online channels and other social networks have forced hotel companies to define social engagement strategies.
  4. Mobile everything – The growth of mobile is making new demands on hotel companies, especially in the case of their information technology assets. New technologies such as smartwatches are giving companies the ability to provide new alternatives to guests, (e.g., keyless door opening) all of which serve to enhance the guest experience. Hotel companies have to keep their mobile assets refreshed, engaging and intuitive/easy to use, in addition to making enhancements to take advantage of new platforms.
  5. Accommodation alternatives – The availability of online channels that make it easy to find and book accommodation alternatives is having an impact on the hospitality industry. Entrants that rely on completely new business models are disrupting the competitive landscape. It’s no longer as simple as “which hotel” – now travelers, especially the growing millennial population which prizes flexibility and customized experiences, have an alternative to hotels altogether . Hotel companies will have to use technology to create experiences that enhance stickiness and entice guests to come back.
  6. Bookings are all digital – Online booking channels have grown. Mobile commerce is growing and will likely continue to do so. Hotel companies should continue to pay attention to their e-commerce channels.
  7. Brand blur – In the last 15 years, across six U.S. hotel companies, the number of brands grew from 43 to 74; loyalty is becoming less important to guests, especially considering the fact that the OTAs and credit card companies offer their own loyalty programs with points portability. According to a 2014 Deloitte Consulting LLP study, the majority of travelers (68 percent) declared themselves loyal to a specific hotel rewards program because that is where they have accumulated the most points. Once those points are consumed, in the absence of stickiness, guests may shift loyalties. Hotel companies should be looking to leverage information technology to transform experiences and enhance loyalty.

What Should Hoteliers do to Keep Pace with Technology Change?
The role of technology in business has had a dramatic shift from where it was in the ‘80s to where it is currently. Earlier, technology was seen as a luxury, probably intimidating as well, while being perceived as useful only to a select few geeky individuals often labeled as nerds. However, the many nerds the IT industry has seen have transformed and helped to bring technology into the mainstream, allowing the masses to take advantage of it. In the late ‘90s and early 2000s, competing on technology was seen as something that only large businesses could afford, something which required deep pockets and large IT departments to build, maintain and operate. Since 2010 we are observing a shift. The transition from running large monolithic disconnected systems to systems that are tipping on the other end of the scale from an interconnectivity standpoint is beginning to happen. IT solutions are becoming a commodity, which is good since businesses are supported by IT’s capability to deliver tools to support the execution of the business vision. The business can now focus on getting business done since IT has come of age.

The hotel industry is no exception, however, it has been a bit slow to adapt to this change. Hotel companies are beginning to explore what they can do to get more connected with all guest touch points within the bounds of the inertia brought on by legacy systems. They see the potential business benefits but tend to get overwhelmed by the degree of change, the fear of change and by the idea of potentially becoming irrelevant. Businesses should no longer perceive technology as a competitive differentiation – it is now a necessity. Industry players that fail to adapt could find themselves chasing guests and potentially becoming extinct due to the failure to provide the guest the experience that he or she has come to expect. 

To get back in the game the right way, hotel companies should reflect on the real value and relevance of the systems they have in place today. They should examine the value that could be gained by modernizing legacy platforms and embrace a distributed cloud-based technology ecosystem. The desired end state should be architected in a manner to remove barriers between above-property and on-property systems. Systems such as CRS, finance and accounting, CRM and loyalty, business intelligence, marketing, revenue management, pricing, owner systems, lobby technology, on-property technology hardware (e.g., locks, geo-location devices, RFID, etc.), and distribution networks (including GDSs, OTAs, traditional travel agencies, wholesalers) should all be part of a large connected network. Distributed systems have come of age. Between the availability of reliable cloud infrastructure and multigigabit network connectivity, moving technology functions above property has become a reality.

Cue Enterprise Architect
Hotel companies with legacy platforms should upgrade their technology across all the layers of the solution including revitalizing the applications to a modern UI design, making use of cloud computing and SOA, based on robust data models and practical business rules engine, effective business intelligence, and an all-compassing reporting solution. The old school architecture principles such as separation of concerns, single responsibility, Law of Demeter, don’t repeat yourself (DRY), and minimize upfront design still hold true. An enterprise architect is a very important person in this regard, and this is a role seen more and more in the hospitality industry.

A service layer-based solution can help align technical implementation to the business strategy, which when achieved is like nirvana if it delivers the intended desired results and sets the organization on a potential path to success for the long term. As an example, take a look at the service-layered architecture.

This architecture can provide many capabilities by using loosely coupled specialized systems at each layer of the solution, thereby enabling an efficient experience for stakeholders including hotel staff and guests.

For hotel technologies this architecture involves abstracting the UI from the various systems and providing a seamless workflow/UI, which can improve hotel staff experience. This is not a trivial task – an ambitious undertaking like this requires key systems such as PMS, CRS and CRM to exchange customer and operational data real time in a consistent format to allow each system to perform its tasks. For example, the CRM system that houses guest data should display the same information to the call center agent that it shows a front desk clerk interacting with the PMS. Further, as a guest making a reservation, I should see the same information that hotel staff see (minus internal information).

One key to getting a services-based architecture to operate in a relatively painless fashion is to get the architecture foundation right and then rigorously follow the architecture design principles mentioned earlier. 

Maintaining the Pristine Nature of the Architecture
Merely creating award-worthy leading enterprise architecture once is not sufficient and sustainable. The sustainability of the architecture requires effective architecture governance though an enterprise architecture board as well as executive IT governance council. These should not be treated as glamorous meeting forums, rather, they should be taken for what they are – serious discussions where tough decisions get hammered out, taking into account business goals, proposed solutions and the fact that the modern technical ecosystem has many interdependencies. Often weak or technologically disinclined leadership can result in faulty decisions that can set the organization back. This approach is also not beneficial to the shareholders.
 
The enterprise architecture board should be chartered and empowered to veto technology proposals that do not adhere to architecture design principles and enterprise standards. This body should not be seen as a hindrance to operations, in fact, all should be educated on the value of this organization. This body should also be cognizant of the impact of its decisions on the business.

Given that the enterprise architecture board and the company strategy teams all have common goals yet different ways of achieving them, it is not surprising to find them at odds with one another. The executive IT governance forum helps resolve these issues by mediating between regional technology councils, the central IT application product owners and the business teams. They are in place to provide counsel and a voice of reason in the best interests of a hotel company. It is important to remember that moving above property or into the cloud does not provide the license to do away with architecture principles and resort to shortcuts. Such moves can result in very costly, potentially multimillion dollar mistakes.

Technology Trends and Disruptive forces
Several trends are making their presence felt. This is not an attempt to do a deep dive on all, but a few of the key trends are highlighted here.

Internet of Things (IOT): There are huge possibilities for embedded sensors and intelligently wired devices working together. For the last several years, our homes have become more “wired” and many devices are connected to the Internet. When I was in grad school I ran a 20-foot cable between two rooms in my apartment which gave me the ability to plug my laptop into our school’s network at my desk or my living room and while watching TV. Today, I have 28 IP-hungry devices at home. Some talk to one another and others don’t, but I control all of them through my mobile phone. Similarly, the hotel of the future will take advantage of IP-based connectivity and advances in analytics-driven, “next-best-course-of-action” security and integration to link rooms to guest preferences and deliver tailored experiences. Imagine a future where the hotel room knows your preferred ambient temperature setting, the TV channel menu displays of your favorite programming, the room lighting is color-temperature set to the exact shade of white that flatters you, and the Internet music appliance is streaming your favorite classic rock station. Doing so will require tremendous growth in integration platforms, network infrastructure and capabilities, as well as bandwidth growth. Heavy fiber-based network trunks will be laid and be tapped by these hyper-connected IOT-based rooms. Where it makes sense, I can imagine that we will see wireless alternatives for fulfilling bandwidth needs. All this bodes very well for hotels that will be able to take advantage of guest preferences to deliver highly tailored experiences (preferences of course will have to be stored in an über-CRM engine capable of not only storing information but delivering it in real-time to touch points that need it).

API Economy: Deloitte Consulting LLP’s 2015 Technology Trends study describes “The API Economy.” An organization’s core assets can be reused and repurposed through application programming interfaces (APIs), allowing companies to do things that were previously not possible. With most organizations' technology footprint getting increasingly complex, the ability to rapidly integrate different systems and data can be a competitive differentiator. A strategic approach to APIs not only can ease the integration challenge, but it can also open up avenues for re-use, growth and potentially new revenue streams. Simply put, APIs can be the foundational building blocks for new services and uses of a hotel company’s IT assets.
 
New ways of Marketing: Advances in analytics and the application of Big Data are giving hotel companies new ways of understanding their guests. Armed with this information, they are able to create precisely targeted campaigns, deliver them, measure success and learn from the outcomes. Next-best-course-of-action engines can analyze guests’ clickstream, location, social, customer profile, transactions and voice of the customer data to enhance and optimize their journeys and interactions with a hotel company’s touch points. All this is made possible because of analytics.

Yes, we’ve come a long way from that first laptop and the first property management system. Not only has the technology changed, but so have the guest’s needs. Hotel companies will continue to grow and must adapt, continuing to focus on the guest experience as best as they can (or as best as their systems will allow).

Amitava (Chats) Chatterjee is a director with Deloitte Digital. Pete Giorgio is a principal with Monitor Deloitte. Maria Barton and Puneet Bhargava are senior managers. Ramya Murali is manager. All are leaders in Deloitte Consulting LLP’s Travel, Hospitality and Leisure practice.
 

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The Changing Executive Title
Given this rapid pace of technology change it is not surprising to see new roles in addition to the broadening of existing roles as discussed earlier. Technology shifts have good and bad consequences, as a result of which the hospitality industry, and indeed, more broadly all industries, have had to invest in new roles with additional oversight responsibilities and titles such as CISO, CPO, DSM. Let’s take a close look at what some of these roles do.

CISO – Chief Information Security Officer: The CISO is responsible for the protection of a company’s information assets and data security. He or she reports to the CIO and very likely directly to the CEO or COO. In the event of a data breach he or she may be called to testify before the U.S. Congress. Data breaches are costly; according to a 2014 Ponemon Institute study on data breaches, “the average cost to a company was $3.5 million in U.S. dollars and 15 percent more than what it cost last year.” 

A modern-day CISO has to battle the rise of hacking incidents that are seeking to steal sensitive personal information (SPI) and credit card data. Several breaches have been reported in the recent past and the incidents will likely continue to rise. Corporations are working hard to combat this information theft and the CISO’s role is not likely to go away.

CPO – Chief Privacy Officer: the CPO is responsible for creating and implementing policies to prevent the theft and unauthorized access to customer data; one might argue that the CPO is identical to the CISO. Both of them certainly have similar roles and responsibilities. Safeguarding customer information is the key activity.

DSM – Director of Social Media: Let’s face it – social media is probably here to stay. The growth of social media channels that are assisting the proliferation of user-generated content is forcing hotel companies to rethink how engage with their customers, many of whom use social media as a preferred medium to engage with customer service. In fact, looking across all businesses, not only those in travel, a 2013 study conducted by the MIT Sloan Management Review and Deloitte Consulting LLP found 58 percent of companies have appointed an individual to oversee their organizations’ social business initiatives. Have you noticed companies advertising URLs that begin with a social media URL instead of their own? Customer service is a given, and hotel companies need strategies for dealing with their guests who choose to interact via social media.

 

Architecture Foundation
The architecture foundation should be based on the following:

1 Standards should be adopted all the way from development architecture standards, messaging standards, execution architecture standards to application architecture, and enterprise data object models. Efforts should be made to implement industry standards-based messaging solutions. This approach helps enable interplay between applications and a better orchestration of the macro business process with tangible outcomes. The hotel industry has many different messaging standards put together by organizations such as the OpenTravel Alliance (OTA) and Hotel Technology Next Generation (HTNG) referenced earlier. These standards provide a common base from which organizations can consider adopting and building  However, the greater the customization, the greater the cost to maintain interoperability with other vendor solutions.

2 Data model should be treated as sacrosanct. Unplanned updates to enterprise data models with disregard for collateral damage should be avoided. A reckless approach in this area is capable of causing issues in multilayered services architectures.  In a well-designed enterprise solution, the data model is the only thing that all applications in the enterprise ecosystem will point back to – be it the reservation PNR in the CRS or the PMS, or the special service request and preferences in the CRM or the room attributes in the inventory system or in the housekeeping module. All should play well together.

3 Services directory and enterprise object models should be published to help boost speed to market by minimizing the need for building core components needed to execute the business as well as keeping systems in sync and maintaining master data in the system that is the true rightful heir of that data.

4 Loose coupling of services will allow less-efficient systems to be swapped out with higher value services/applications.  Loose coupling of systems will also help in continuously improving functional capabilities needed by the business to execute leading strategies in the marketplace.

 

Industry Perspectives
What Do Industry Luminaries Have to Say?
When we were discussing the approach to this article, it was evident that we would be doing a disservice if we didn’t include perspectives from a few industry luminaries and HFTP Hall of Famers who have been at the forefront of technology advancement and ridden the wave. Conversations are reproduced with their permission and views are their own. Each interview is fascinating in its own right.
 

What is the biggest impact from technology advancement you have had to deal with?

Bob Bennett, hospitality technology veteran and HFTP Hall of Fame Inductee 2000
“Technology advances have resulted in a shifting value of data. Historically, data was thought of as operationally important, but now, data is particularly valuable. Earlier on, data quality was not a priority, but now data has value because of data mining and Big Data – this is different. Because of these shifts, we have had to upgrade and secure our systems. Data needs to be respected and treated as an asset.
Another impact of technology advancement is on the audience that uses the systems. Looking back, a lot of systems were built for internal use and one could get away with them not being very pretty or easy to use, since employees were using them. Now, in many areas, we are skipping employees and putting the power into the hands of our guests. This puts a lot of pressure on IT teams. Guests, who are used to simple, easy-to-use websites with rich functionality will hold you to a higher standard since they are used to this high-performance intuitive experience. As a result, you need greater skillsets, more designers, and a lot more QA – all this translates into a more robust team.”

Raman (RP) Rama, executive vice-president, CIO/CTO, JHM Hotels
“The biggest impact arising from technology advancement that we have had to deal with can be attributed to the rise of Millennials, centennials and the proliferation of digital technologies and channels. Given their deep adoption of mobile and digital technologies, Millennials expect that we will interact with them in a manner of their choosing, via necessarily user-friendly applications. In addition to these customers of the future, even baby boomers are becoming more tech savvy; they too look for convenience in interaction with hotels. Their decision-making processes and time between thought and purchase has shrunk – they have become impulsive and instant buyers. They are adopting a “do it yourself” mentality as well – travel coordinators are gone, assistants don’t book their rooms, and they don’t deal with travel agents; they go direct to the hotel website or mobile app. Further, guests are really embracing self-service. They want to choose their own room and even bypass the front desk, opening their room door locks with their smart watches.”

Barry Shuler, hospitality technology veteran and HFTP Hall of Fame Inductee 2014
“Dramatically increased speed, stability, availability and flexibility of wide area networks, computing platforms and application programming languages have combined to enable the theoretical promise of service-oriented architectures to finally be realized in implementable systems. This allows IT architects, both in hospitality and travel companies and in commercial off-the-shelf application development companies to design systems that can operate in multiple instances globally, but still give the appearance of being on a large centralized system. This in turn allows the design and implementation of a portfolio of application functionality that can operate as if it were completely centralized, while retaining the speed and availability characteristics required for individual property systems’ functionality, with little to no property-based computing platforms required.”

Jules Sieburgh, hospitality technology veteran and HFTP Hall of Fame Inductee 1998
“PCs came out in the ’80s and made a big impact to our business. There was a lot of excitement and in their eagerness, our staff would open up the PCs and set them up before reading instructions, and this caused problems. I actually had to teach them to slow down and did this by performing a skit before my staff – I wore a giant diaper with bobby pins and a pacifier around my neck and took off my clothes; basically the message was crawl (as a baby would, hence the diapers and pacifier), walk, run. It made an impact.”
 

What are the biggest issues/challenges arising from technology advancement?

Bennett: It has always been a challenge to grow staff as technologies change. Most would agree that the pace of change has increased; the days of finding someone who would be working on the same development tools and code base for several years have gone away. We can no longer keep the same technology for decades altogether. Therefore, we have to retrain staff more frequently and this is becoming more mainstream.

Rama: Security, security, security – this is my biggest concern. With the prevalence of Wi-Fi networks, I’m worried about hackers. Many hackers are probably working on the latest hack as we speak; we have to manage security patches every week to address various issues, vulnerabilities and keep their products secure.

Integration is a big one too. The hospitality industry is behind other industries when it comes to customer-facing technologies because it has a lot of old, proprietary software; we have integration issues due to the vast number of systems that a hotel needs in order to operate; many vendors have just not been able to keep pace with the latest integration and technology standards – all of which make integration difficult. On the other hand, companies who control their technologies and have standardized are able to rapidly deploy innovative technology-driven concepts to market.

Shuler: For the first time, hotel management companies can decide which business processes are most effectively performed at the hotel property itself, versus in an above-property location. Without being forced into the assumption that certain things have to be done at the property, because that’s the way it has always been done, or that’s how it had to be done because of shortcomings of, or restrictions of, the information systems.

An increasing number of guests are demanding an active role in hospitality and travel technology, as self-service customers. Actually, the notion of providing shared services to individual hotel properties will deliver significant economies of scale while concurrently, can provide these guests with an even better experience than they enjoyed before. Properly designed, these new, more efficient shared systems can be opened up to the guest’s own devices. This allows the guest to become a truly active user of the hotel system’s functionality, thereby feeling they are more in control of their interactions with the hotel and the brand company. 

So, we need to proactively include our customers as users of our systems and technology, right along with our hotel property and above-property staff. And with regard to the functionality, we first need to focus on normalizing all business processes across all brands. Then, and only then, should we be designing, developing and implementing application system functionality to fit these agreed-upon core cross-brand processes. With this as a firm foundation, we should only then consider whether additional unique functionality is required by brands because those brands have incremental unique business processes that must be supported.

Sieburgh: One challenge that has never gone away is the battle for money. You’re always competing with room and restaurant renovations. The other challenge is where people spend more time complaining about technology instead of embracing it. Another challenge was ensuring that a hotel GM was visibly seen as being an ambassador and visible supporter of the new technology; I’ve always maintained the need to get the GM to understand that the new technology is intended to support business operations, not hinder it.
 

What new roles have you had to create to deal with technology advancements?

Bennett: Director of innovation and chief data officer are new roles that have been created because of technology advancements.

Rama: Technology advances have given rise to a need for mobile technology support road warriors to provide assistance at various hotel locations. Also, since the marketing and distribution models have changed, new positions have become part of the executive management teams, such as chief marketing officer, chief digital strategy officer, chief information security officer. A few years ago, we didn’t have this prevalence of identity and information theft.

Shuler: (There is a) need for a new breed of business process engineers and global application portfolio architects to ensure steady progress toward the style of computing that will enable functionality to reside in the cloud.  Also, a new breed of application programming skill is needed.  Analysts and programmers (who) are comfortable developing object-oriented code that can scale to the ultra high transaction rates needed for the object oriented application portfolio of the future. These skills and the roles are required to develop and put the new architecture in place, and are absolutely critical. But, planning, architecting, designing and delivering new systems and functionality are just part of the technological challenge.

Once we’ve broken down the barriers to cross-brand technology sharing, we can also start rethinking staff support roles that need to be delivered on property vs. from an above-property location. In the new paradigm, highly technical property-based roles can be eliminated, because those systems and underlying technology platforms are no longer running in the property. Property systems managers move above-property into regional support roles. It’s really all about normalization and the rooting out of unnecessary redundancy, in the architecture and application functionality, and in the roles required to design and operate within the new WAN computing (cloud) paradigm.

Sieburgh: Revenue management, as a discipline, has resulted in the creation of new roles – we had to create new roles and processes to support yield management. The same holds true for distribution, especially in the last decade. Another change has been in that 10 or 15 years ago we had hospitality-experienced CIOs who had grown up through the ranks. Over a dozen years ago we started seeing non-hotel systems managers take on the CIO mantle, reporting to a hotel company’s CFOs. Now, there is a tendency to see the CIO reporting into finance or marketing.



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