The prevailing theme at this conference was the relevance of the role of the CIO/IT leadership position within organizations and how in many cases it has evolved from simply an operational position to one of strategic importance across all aspects of the organization. Speaking with a number of the attendees, the common sentiment was that the CIO now is an important part of the executive team and is involved in high-level decisions affecting the company’s operations and growth.

Bernard Gay, CIO of Brookfield Hospitality, said, “The CIO has a seat at the executive table. Companies have placed a lot of the business’s future stake in the hands of IT. We are all able to sit down and focus on the strategic nature of the direction of the business which involves IT.”

However, there are still some IT executives whose positions have not progressed to this level and who still are not included to this extent. To some executive teams, IT can still be considered an expense, and in a number of cases the CIO still reports to the CFO or financial arm of the company. This seems to be correlated with the size of the company and the number of staff members within the IT department. With resources being constrained, many smaller companies do not have large teams in the IT organization and as such the predominant role of the IT director is still very much focused on the day-to-day operations of the business and hotels. A few of the IT leaders still felt hampered or trapped with the operational role that requires them to be focused on ensuring that systems are maintained and functional. In these cases they feel that they have not really progressed from the break/fix role to that of a strategic decision maker.

The New Skillset to be a CIO
As part of the evolution of the IT leadership, it has become apparent that the skillset required for the position has also had to evolve. In the past the primary requirements for the position were a solid understanding of information systems and how they operate and work. However, the new responsibilities require far more diverse capabilities and the primary requirement of being able to communicate effectively.

Many CIOs that we spoke with also had a solid financial background, which in some cases included being a CPA. Others said they were confident they had effective leadership skills and certainly understood the concept of ROI. In many cases they said they possessed a strong understanding of sales as they had to sell their concepts and IT needs for funding requirements. They also understood the concept of growth and the need to continue to cultivate the business. Finally they felt that one of the most important skills was communication and this was the skill that needed to evolve the most. The bottom line is that the IT leadership position has changed and requires a far more rounded set of skills in order to be effective at the executive and strategic level.
  
While the majority of CIO and IT leadership positions are still filled from within the industry, it was noted that there are a number of positions that have recently been filled with experienced technology professionals from outside of hospitality. An example of this was the recent hiring of Martha Poulter as EVP and CIO at Starwood Hotels and Resorts Worldwide, who came from the financial services industry and was the vice president and CIO at GE Capital.

The Hybrid Concept – Crossing Over into Other Roles in the Organization
The concept of a changing CIO role is also highlighted by the recent changes at Hyatt. Jeff Bzdawka was the vice president – global property solutions and field services in charge of property applications and services. However he has since taken on a new role within Hyatt. Now, as the senior VP of global hotel operations he will effectively bridge the gap between operations and IT. “Too often there is a tendency to try and cram technology into the business operation without first looking at the business needs and requirements,” he said. “There is a need to have someone on the operational side of the table to find the requirements and use cases. (In a number of instances we are outsourcing solutions and integration.) My role will be to make sure that the technology is relevant.”

Peter Chambers of the Viceroy Hotel Group agreed that the role has become more innovative and believes that as the role of CIO continues to evolve in line with ever-changing trends, he would “make a strong case that the role is now one of chief transformation officer.” This is due to the fact that the position is uniquely qualified to understand the impact on the business unit as a whole and therefore is in a key position to manage and drive the implementation and transformation process. He further believes that “as a modern CIO it is our responsibility to not only bring innovation to all parts of the business but also to ensure that innovation is always coupled with action and meaning. That powerful combination helps to transform the way that we do business.”

Additionally most of the respondents said that with new technologies coming to the forefront of business it’s no surprise that innovation is becoming a key requirement for the IT leadership position. However some CIOs like Laurent Idrac with Accor qualified this by stating, “Innovation is becoming more prominent but this comes on top of the other roles of the CIO.” He further added that “innovation should not be ‘owned’ by a single function in the organization. It may be led (or not) by IT but it is transversal to the organization.” 

Monika Nerger agreed and said, “There are many new opportunities to innovate quickly – whether that innovation or thought creation comes from within IT or from the business in general. Being able to collaborate and bring to fruition new technologies which engage customers, bring insight into data, or help our growing company collaborate are strategic objectives overall. It is technology-enablement across the enterprise for these opportunities which matters.”

Todd Davis with Choice Hotels added, “The role is more strategic and the innovation comes from our sense of urgency, culture of collaboration, diversity of thought, openness to try new approaches and accept risk. Technology is a key enabler of our business delivery and the CIO must clearly understand the enterprise operations of the global company, (and) then set the direction of technology which will help open new opportunities, resulting in competitive advantage.”

A number of the CIOs pointed out that innovation does not necessarily mean using the latest technology. IT leaders such as Darrin Pinkham with Highgate Hotels and Jeff Linden with Red Roof Inns also mentioned the fact that innovation also can be defined as streamlining operations to “do more with less.”

Ultimately most respondents liked the idea of the new title and pointed to the fact that the CIO or IT leadership position inherently requires the CIO to be an innovator. Perhaps Merrie Bird with Canyon Ranch summed things up best when she stated, “but isn’t technology inherently innovative?”

Recent Accomplishments or Key Initiatives
Several of the CIOs were more than glad to discuss their team’s latest accomplishments. These ranged from some more common initiatives like mobility and cloud-based solutions to unique new satellite network to the development of an innovation lab.

Many of the IT executives said their focus over the past few years was on centralization of systems. A number of respondents said that the centralization of most of their functions was allowing them to streamline operations and build upon the foundation for the future.

Moving systems into the cloud along with the adoption of cloud-based solutions appeared to be another common directive for many companies. Jim Lamb with Interstate Hotels & Resorts mentioned that his company was focused on the migration of critical infrastructure to the cloud in order to support the doubling in size of his company. Some of the cloud-based initiatives that Lamb’s team has focused on include its business intelligence platform with a new mobile app, email and an email archive, its financial system and company Intranet. John Edwards with Dolce Hotels & Resorts has been focused on provisioning a full-service conference hotel with 100 percent of the systems in the cloud.

With the focus on strategic alignment, there are a number of organizations that aim their attention on implementing tools to manage their day-to-day operations in a more effective manner so that they can implement new technologies and manage their systems strategically. Mark McBeth said that the North American Division of Starwood has focused on the deployment of a property technology tool kit and services. This included a set of solutions designed to manage security, software standards, remote support and data backup for 150 hotels, more than 15,000 desktops, more than 1,100 servers, more than 1,200 pieces of network hardware, and the backup of approximately 100 terabytes of critical data.

While Charles Bureau with Groupe Germain in Canada indicated that his company has been very busy with PCI compliance and data security issues, Mark McBeth and Starwood Hotels & Resorts has as well. His team rolled out a sophisticated vulnerability scanning program in 2013. They are now scanning approximately 40,000 devices and remediating vulnerabilities on the devices for PCI compliance reporting. Seth Cenac and his team at Trust Hospitality have implemented a security program called SECURE in 70 percent of its operational properties and 100 percent of its new builds and renovations started within past 24 months.

John Wimmer with Xanterra Parks & Resorts has been focused on product standardization across the portfolio (focusing on property management, F&B POS and retail POS/merchandising) to help the organization improve by running on standard platforms.

Laurent Idrac, CIO of Accor and his team have implemented Salesforce.com in a timebox approach. “The pressure of time and sense of urgency are very powerful drivers,” he said. “We just finished the rollout of our worldwide social network and intranet 2.0; it is a great tool for all our employees and can be accessed from any device – corporate owned or personal.”

David Thomson with Pineapple Hospitality has been focused on a paperless front desk initiative. The company wanted to reduce the night audit packet to a digital version, and has stopped all paper registration cards.

Canyon Ranch has actually dipped into the spa management realm. Merrie Bird said her team has deployed a new ERP solution and has taken over and launched spas on 10 cruise ships in six weeks.
“One of our biggest recent accomplishments was building a global Technology Innovation Lab, which has enabled us to test new and emerging technologies,” said Monika Nerger, global CIO of Mandarin Oriental Hotel Group. Her company won the 2014 Hotel Visionary Award for this initiative. But accomplishments are not just about the systems. Nerger added, “For me personally, the biggest accomplishment is being able to work with the finest IT team in the industry. I’m extremely proud of our collective contribution to both Mandarin Oriental as well as the hospitality industry.”

Does Your Company Have Any Significant IT Projects Planned?
With technology evolving at a rapid rate it is often challenging to target specific initiatives. The question as to where to invest is often one of the hardest decisions to make. It usually comes down to the must haves vs. the proverbial wish list. Then there is also the question of being the first to market with a concept or idea. With most of the industry looking to be leading edge vs. bleeding edge, a few of the CIOs weighed in on the future.

While Bernard Gay said that Brookfield Hospitality is going through a transformation effort to bring everything including the reservation system and ERP back in house as part of the move away from its management company (Kerzner International, outsourcing is another initiative for some. Darrin Pinkham of Highgate Hotels is focused on the outsourcing of all PBX, services delivery and reservation calls away from the property taking them directly. Additionally he is targeting a new mobile digital media platform for seamless guest experience for remote mobile check-in where a mobile phone is the guestroom key.

Standardization is also a goal for some. Jim Lamb’s team at Interstate Hotels & Resorts is focused on deploying a standardized platform for HR, payroll and timekeeping using SaaS and managed service models. Once complete, he said all of the company’s critical systems will be operating on a world-class infrastructure and managed by best-in-class suppliers, 7 days a week, 24 hours a day.

John Edwards’ team at Dolce Hotels & Resorts is targeting a new CRM system and a new ERP system, while Ken Barnes of White Lodging is focused on more cloud-based environments for the enterprise, email and possibly ERP.

Even though she is still new at her position as CIO with Omni Hotels & Resorts, Kris Singleton is looking at a strategy around mobile networks and also business intelligence and dash boarding. Additionally, Laurent Bortoluzzi of WHM LLC – Luxury Resorts is focused on updating his company’s IT governance, control and some security projects.

Currently the most significant IT project for Mark McBeth of Starwood Hotels & Resorts involves moving the company’s POS to the cloud. His team began the initiative in early 2014 and estimates that it will take at least 2.5 years to complete the transition. It is a global project that involves many disciplines within Starwood and is much more than an IT project as it brings significant benefits to Starwood’s food and beverage operations.

Merrie Bird said the Canyon Ranch IT team is focused on mobile applications, online activity booking and reservations, upgrading TVs and content in guestrooms, and opening new properties in new markets. Predrag Krstajic of Karisma Hotels & Resorts is also focused on in-room technology as well as infrastructure improvements. Some examples include in-room entertainment relying on smart TV technologies, the expansion of mobile functionalities like augmented reality and personalization of events, infrastructure improvements to adopt new standards (803.11ac), and new builds and openings.

Peter Chambers of Viceroy Hotel Group mentioned that his company is embarking on two big data initiatives “which will bring meaningful insight to the huge amount of daily generated information. One initiative is the development of a business intelligence tool that aggregates data from the PMSs, enabling us to investigate patterns across all business lines (rooms, F&B, spa, retail) and generate insights that will empower sales, marketing and revenue and guest experiences.” The second big data initiative for Viceroy will enable data aggregation from all sources that the company uses to measure its KPIs. “This will result in an automated KPI delivery system that will empower us to make sound decisions based on real-time and historical performance data across every facet of our business,” Chambers said.

Rick Warner of InTown Suites is targeting data warehouse, central reservations and PMS enhancements, while Sam C Selim of First Hospitality Group is looking to implement a hybrid cloud solution.

Seth Cenac of Trust Hospitality continues to be concerned about security and is focused on the implementation of increased PCI compliance. In addition, he is looking at a distributed team collaboration portal for active construction and renovation projects and operational properties. Lastly he is targeting property participation in a VDI pilot.

Todd Davis of Choice Hotels International said his team continues to work on advancements in mobile capabilities, Choicehotels.com, global distribution and rate/revenue management, which all provide value to their franchisees.

Vivek Shaiva of La Quinta Inns & Suites and his team anticipates further expansion of mobile-enabled technology to other areas of the business for improved efficiency and will evaluate any innovations that generate an ROI.

Biggest Issues for CIOs in the Industry
There is no question that security is the primary area of focus for most CIOs. While this predominantly concerns data security, it is important to note that this covers physical security as well.

Monika Nerger, global CIO for Mandarin Oriental pointed to the challenges of innovation as it relates to security. “Perhaps less of an issue and more of an opportunity, the role of the CIO is undergoing transition through the sheer velocity of technological developments in cloud, mobile and social technologies,” she said. “The complexity of this transition requires a collaborative mindset to both drive and support fluid business opportunities.”

However, with this innovation comes greater risks, particularly surrounding data privacy and security. “The ongoing headlines concerning massive breaches of credit card and personal information are ongoing evidence of the need for CIOs to remain diligent and focused in this area,” said Nerger.

Keeping Pace with New Technology
Vivek Shaiva of La Quinta Inns & Suites said, “Technology has been evolving at such a rapid pace that it can be challenging to incorporate newer technologies’ benefits into the business as quickly as possible while remaining focused on ROI.”

While everyone has an opinion on what they believe are the latest, most interesting emerging technologies for the industry, it’s beneficial to gain an understanding of what the IT leadership for the industry are targeting.

Jeff Linden with Red Roof Inns believes that mobile will provide new avenues in finding ways to have guests be “sticky” with the brand that is trying to increase distribution and revenues by making the brand relevant. Seth Cenac with Trust Hospitality is interested in mobile apps to assist with internal marketing programs and is looking to provide additional functionality such as check-in/checkout and door lock functionality.

Michael St-Laurent of Gemstone Hotels & Resorts is actually concerned that people may not be interested in apps and is trying a different approach. “We’re not trying to focus on an app but rather an HTML 5 based solution,” he said. “Guests don’t like to download an app at each at every hotel they go to. We’re trying to create something in a browser based solution that is GPS located.”

In taking a look at this innovative technology, Brian Garavuso with Diamond Resorts International believes that facial recognition could provide a way to improve customer service.

In-room technology is still a big focus for many hotels and Predrag Krstajic with Karisma Hotels & Resorts is looking into smart televisions, wearables and relevant apps for such devices applied in hospitality. As he noted, they could make a difference in guest experience, and on the HR end, using smartphones and wearable devices can improve the employee experience and processes. Also focused in part on the guestroom, Merrie Bird of Canyon Ranch said her team is interested in content delivery options for guestrooms, cellular signal boosters, mobile and updates to guest Wi-Fi.

David Thomson, CIO of Pineapple Hospitality, is interested in social media, learning to engage with customers in the different social channels. “(We are) looking to see if we will have a slowdown in this space in the next few years or if it will be a constantly evolving target,” he said. “As mobile takes over and the traditional search traffic is replaced with social traffic, this becomes more and more relevant for us to master.”

Jim Lamb of Interstate Hotels & Resorts said the constant downward pressure on cost should provide an opportunity for increased expenditure on innovation/emerging technology on a cost-neutral basis for his company’s properties and owners.

Not every property can be in the middle of a major city. “Because of the remote nature of many of our locations and the extreme shortage of bandwidth for both guest Internet services as well as our corporate network, I’m keeping an eye on alternative communication technology such as microwave and satellite,” John Wimmer, CIO of Xanterra Parks & Resorts said. “I’m hoping to find alternatives to traditional land-based communication providers since we are in locations where there is no ROI for the communication provider to upgrade their facilities but our need for improved communications continues to grow at an exponential rate.”

On one side of security, Ken Barnes, VP of IT for White Lodging, is interested in door systems, specifically the major operational impact and major security/safety concerns as the industry moves to opening doors with guest-owned devices. In a different security focus, Seth Cenac and his team at Trust Hospitality will continue to educate disparate owners on mandated PCI compliance requirements and intelligent risk assessment practices. Another interesting development that Vivek Shaiva from La Quinta Inns & Suites said he is closely watching is newer mechanisms for payments that also improve data security.

Predictive Analytics
Peter Chambers of Viceroy Hotel Group said his interest lies in the prediction of guest behavior. “One (technology) which I believe holds great promise for our industry is quantified self and predictive analytics,” he said. “Solutions that are able to accurately predict our behavior and desires based on numerous previous interactions with all sorts of technology sources (e.g., smartphones, TVs, browsers etc.) could provide us as hoteliers with a tremendous opportunity to innovate based more on fact and less on assumption.”

Monika Nerger is looking at existing technology and finding new ways to use it with little cost. “This will unleash an unprecedented cycle of creativity and innovation.” She is watching developments in wearables technology and robotics as well which she believes will alter our thinking about hotel security, housekeeping and a number of behind the scenes services.
 
Data Security and PCI Compliance: It’s not a Matter of if but When
Far from being an issue that has been beaten to death over the past few years, most CIOs and IT directors mentioned the fact that security was still very much a primary focus of their responsibilities. Mark McBeth the VP of IT North America for Starwood said, “My role and the role of my team are now more than 50 percent focused on security. It’s a big deal!”

Education is also a key requirement that is often overlooked. Bernard Gay with Kerzner International mentioned that as an industry, we can do a better job making sure that the business partners understand the risk of the security issue.

For many of the IT leaders the issue boils down to minimizing exposure by limiting the amount of sensitive data that is stored in the networks. A move to tokenization and removing credit card data from the network was a no-brainer to most. As Jeff Linden the CIO for Red Roof Inns said, “If you don’t store it, they can’t steal it.” 

Martin Thell, the company’s director of IT/CIO for Scandic Hotels, said security is extremely important and his team is also working on PCI compliance. Being a company located in Europe, he has seen some initiatives that seem to be working. “We always talk about the U.S. and wonder why they haven’t implemented chip and pin yet,” he said. “We have had it for several years. From what I know the fraud has been going down quite a bit.”

It’s has become clear that while many people focused on new technologies, the issue of data security is front and foremost on the minds of the CIOs and IT leadership. While many of the group would not come right out and say it, it certainly appears that this could have a bearing on job security.

Relationship with the CMO
The lines between IT and marketing appear to be very blurred in this age of digital marketing. It's more important than ever for CMOs and CIOs to communicate consistently and effectively. There have been reports where the relationship between the CMO and CIO/IT leadership has been contentious and this can for obvious reasons be disruptive to the organization. Based on the growing need for interaction between IT and the CMO we asked the respondents to comment on their relationship with the CMO.

In general, the CIOs reported having a good relationship with CMOs and mentioned that their responsibilities are very much linked. The predominant response revolved around constant and effective communication between the parties is an absolute prerequisite. Kris Singleton with Omni mentioned that this actually was “part of the evolution of the CIO. In order to become a successful CIO it takes having good communications will all members of the executive team. You need to have a positive relationship with the CMO and not be afraid to go into their office to talk to them. Brainstorming is what it’s about and the end goal is to make the company profitable.” Most CIOs have constant communications with their CMOs and in fact schedule regular meetings on a weekly if not more frequent basis.

Having a great relationship certainly improves the chances of a successful partnership and collaboration on initiatives and goals. John Edwards with Dolce Hotels & Resorts said that his VP of marketing is one of his closest friends and they talk at least every other day. He said, “We work on projects together constantly and combine to help push innovation along.” It was pointed out that good relationships should also exist between the CIO and the other C-level leaders. A number of respondents indicated that they were “joined at the hip” with some of their contemporaries to deliver the most optimal solutions for the business.

Blurred Lines
There are often blurred lines as to where the CIO’s and CMO’s responsibilities are concerned. A number of the CIOs referenced that it’s important that both parties work closely together so that the various initiatives and projects are successful

Someone who does have a unique perspective on the role is Brian Garavuso with Diamond Resorts International. Brian mentioned that from mid-2009 to the end of 2010 he was both the CIO and CMO for his company and that in some organizations the lines are blurred.
 
While there are those organizations where the roles may be blurred, others point to the fact that there is a clear delineation with regards to roles and responsibilities. Mark McBeth said, “We have IT resources that are directly connected to our brand teams and our CIO and CMO both report to the CEO,” he said. “We are actively engaged in our marketing efforts and with our brands in creating standards and strategy.” 

When There is no CMO
So how are things coordinated and managed in this case? David Thomson with Pineapple Hospitality had one explanation that seems to be working for his company. “We currently have no CMO and our Internet marketing team currently reports to me,” he said. “The interpretation of data patterns and their relationship to business objectives seem like a great place for the CIO to be involved. Who else is going to be technical enough to understand the digital marketing landscape and force accountability of performance while also able to feed the marketing team with relevant tools and information to become more effective.”

Not all Sunshine and Roses
There are a few CIOs who pointed to a slightly contentious relationship with their marketing counterparts. This is especially true where an initiative has just started and they feel that they have a long road ahead of them. Comments such as “Marketing… has the belief that it all begins and ends with them.” Clearly in these instances this relationship will need to be developed in order for a collaborative effort to work.
Monika Nerger said, “(We are) peers, collaborators, and in the trenches together. Most importantly we are mutually respectful that it will take the effort of our respective teams working in new and imaginative ways to succeed.”

This Brings Us Back to the Evolution of the Role of CIO Itself
We all know that technology is changing at an incredible rate and this has had a major impact on the way that we all live and interact as a society. It’s a challenge to keep up with known and proven technology let alone the impact of new emerging trends. If one were to take a look at the technology changes over the past 10 years and how they have affected the hospitality industry, I think we would see that the primary change has been that the role of the CIO has evolved to that of an innovator having strategic importance to the overall growth and success of the company. As the position continues to evolve it will be interesting to see if it can lead to other key leadership opportunities within many of these companies.

Brian Garavuso with Diamond Resorts and Predrag Krstajic with Karisma Hotels & Resorts both believe that every day is definitely a learning opportunity. As Krstajic said, “Every day there is an experience that I take lessons from. I try to share it with my team so that we can do things better when next opportunity presents itself.”

- Collaboration by Jeremy Rock, HU's Kris Burnett and HU's Geneva Rinehart
Jeremy Rock is the president of RockIT Group, a technology consulting firm specializing in new development and refurbishment projects. He can be reached at JRock@RockITgroup.com .

©2014 Hospitality Upgrade
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