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The 2006 CIO Summit Review

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October 24, 2006
CIO Summit Review
Kris Burnett - kris@hospitalityupgrade.com

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© 2006 Hospitality Upgrade. No reproduction without written permission.

What 45 CIOs and top-level hospitality technology professionals experienced September 6-8 at Amelia Island Plantation off the coast of Jacksonville, Fla., was a beautiful beach lined by an extremely challenging golf course, some highly interactive while educational sessions, and most importantly, an opportunity to network and make new relationships with their peers… priceless.

“I think it’s a networking event extraordinaire,” said Scott Martiny, CEO for event sponsor Capton.  “It is a great opportunity to be around the movers and shakers in IT within hospitality. The No. one reason why we sponsor an event like this is it’s the best listening environment I’ve seen in my whole career.”

Return attendee Jeffrey Stephen Parker, CHTP, director of technology and “chief funologist” for Magnolia Hotels said, “The CIO summit is a must attend for me every year. The CIO summit provides an environment where I can hit the ground running, often finding solutions to issues I face from others with similar challenges.”

Andy Furrer, VP, technology for Kimpton Hotels and Restaurants said, “The people here are the people I would like to meet and talk to. I can learn about new technology and learn what other people are doing. The networking is so important.”

This year marked the fifth Hospitality Upgrade CIO Summit. Many in attendance had been to more than one of our summits before, but three attendees had been to all five and were recognized for their commitment to the event: Nick Price, CIO/CTO Mandarin Oriental Hotel Group; Jane Durment, CIO of The Marcus Corporation and Michael Hwu, VP of Information Systems, Four Seasons Hotels & Resorts.
This year’s sessions really highlighted customer experience, with topics including: guest experience management (GEM); Web 2.0 – new trends in distribution; converged networks; service-oriented architecture; a very interactive Six Sigma briefing and the post-modern CIO, a look at how one company, Marriott, is grasping the fact that CIOs are not just technology people anymore. 

Before the sessions began, however, the Ocean Links, one of Amelia Island Plantation’s four courses, proved an extremely challenging but beautiful venue for the annual scramble. This year’s tournament winners included: Scott Martiny of Capton; Michael Hwu of Four Seasons Hotels & Resorts; Michael St-Laurent of Gemstone Resorts and Todd Wood of the Sea Island Company. NCR provided the longest drive and closest to the pin prizes, but more importantly, Tracy Flynn of NCR presented Hospitality Upgrade’s own Rich Siegel with two floating golf balls, which definitely would have come in handy earlier in the day. Steve Bearden of Fidelity Investments won closest to the pin honors and made the longest drive of the day, but the longest drive award went to second place Jay Rollins of Churchill Downs. A fabulous dinner followed by the golf tournament awards capped the evening.

The next day began with an introduction by Rich Siegel and a follow up to the spend survey discussed at last year’s summit. The idea of the spend survey is to provide a report analyzing industry-wide average IT cost detail. This year, with the help of BearingPoint and our own Victor Vesnaver, attendees have the opportunity to participate in a survey detailing their big picture IT costs, system cost breakdowns, staff allocation, funding services and product penetration among other line items. Additional participants will provide content through the fourth quarter of 2006 with results from the survey available in June of 2007. For a look at some of the invaluable responses given by summit attendees as well as plans for the spend survey in the coming year, see page 50, Vesnaver article.

The first session provided a detailed look at guest experience management. Susan Ward, senior manager within the financial services customer relationship management (CRM) practice at BearingPoint started things off with some ideas for how hoteliers can get into the minds of their customers.

“You have to reframe how you think about the guest to understand how to reach them,” she explained. Implementing practices that facilitate this ability are part of guest experience management. The key is consistency. “We all have good intentions for positive guest experience internally, but you have to apply it across different channels,” she said.

Scott Gibson, CIO of Best Western International, Inc., said, “Many of our guests are reaching us by another channel and that channel sets their expectations. We can’t control what they set. Hopefully we don’t start off on the wrong foot.” Ward said channels like Expedia still have engaged that guest and now your property has to deliver.

Ward pointed out, even though billions of dollars are spent on CRM systems, less than 25 percent of executives say their customers promote their institutions enthusiastically to friends and family. Ward said, “Our experience is that the key to truly manage a guest’s journey is to marry the business and guest perspectives in a unified strategy with identifiable and measurable triggers throughout the guest’s experience.”

Tom Walker, EVP of The Rainmaker Group followed Ward and touched on the revenue management portion of GEM. “Sometimes there is a negative connotation of revenue management. If done well, it should be positive. If done badly, it can really step on the toes of guest experience,” he said.

The challenge as Walker sees it, is that with so many different channels, customers don’t have consistency in pricing. In addition, guests are more savvy and have figured out how to get the best rates.

The difference in rates between the third-party Web sites, a phone call directly to the hotel and a corporate or hotel Web site can be staggering. Walker recommended that for your most valuable guest, best practices are key. “Consistent loyalty program usage, exclusive recognition practices and revenue management as a way of doing business, not a computer system, are all good places to start,” he said.

Larry Dubov of BearingPoint took the podium next and explained what it means from a technology perspective to support CEM; customer data integration. He examined how to cement the process, when to start the initiative, identifying what business processes you have installed and what you need for the future.

Dubov discussed selected areas of the framework including customer identification and relationships, what client hub style is right for you, data synchronization components and data governance and quality.

After several travel delays the night before, as well as a very bad “travel/guest experience”, Nick Price, CIO/CTO, Mandarin Oriental Hotel Group, very graciously was able to provide a glimpse of the guest experience that his company strives to provide. Price explained how the philosophy of Mandarin Oriental is truly about the experience. “Luxury isn’t about money, it is about experience. Luxury makes you feel special. Feeling special is the root cause of having a good customer experience,” Price said.

“We are defined by past customer experiences. Customers are absolutely the best sales people for any company,” Price said. “It is all about the people. You must put people first whether they are staff or customers. I actually think that if you have the right people in place, you are going to succeed.

“How you do those things depends on the systems and processes to actually know the people. Operational data is what we need to know to serve our guests better.”

Ron Hardin, director of technology for Davidson Hotel Company said systems are the tool not the solution. At Davidson, they have also begun to start with the people instead of the process. They use psychological and personality tests, focusing on hiring outgoing and friendly people for the front desk, and then teaching them the process after they are hired.

People are an important part of the GEM puzzle, but Zimm Zimmerman, manager within the financial services customer relationship management (CRM) practice at BearingPoint explained another issue when looking at GEM data. He said, “When looking at and organizing customer data, silos are not necessarily accurate representations of the guests. Even though you may have a golfer, you also have someone who has children and a spouse that are interested in other programs like spa, tennis, etc.”

Zimmerman said, “The customer is not one person or one silo, not 1:1. It is 1:many. You need a 360-degree view of customer.”
He and Ward explained that you can’t treat a customer like a product life cycle with a beginning, middle and end. The customer isn’t like that. Zimmerman said, “You need to train the company that this is a guest, an individual with multiple facets.”

After much discussion and examination of GEM, attendees then had the opportunity to choose one of three sessions to attend.
One option was “Web 2.0 – New Trends in Distribution” with John Bray, vice president of advisory services at PhoCusWright Inc. Bray examined many of the newer Web sites and facilities people can use to research travel. He showed that it’s definitely not your father’s Internet any more.

Bray said, “It is changing from searching for the lowest fare to ‘finding the perfect trip.’ This is the emergence of 2.0.”
Some options presented by Bray include various Web sites where travelers can bookmark venues in a chosen city based on customer reviews, create itineraries based on what other people with common interests have said about certain areas, view other travelers’ home movies to actually see a real view of a trip to the area of interest, and enable groups of similar interests to plan tours and trips together.

A search on Google or another search engine is a flat search, a search that is fairly generic and wide spread. “Consumers want more and shop differently than this,” Bray said. A vertical search can be done by a traveler on many travel Web sites instead, allowing him to enter more than one search category and creating a truly customized search.

Bray said, “People are shifting from buying products, flights and cars, to buying experiences. They want tools to help them plan their trip, seamless tools.” He recommended moving from Web 1.0 (search engine optimization) to 2.0 (tagging, blogs, mashups). “You have to embrace and understand these technologies and how they can be deployed in your organization,” he said.

Down the hall, Michelle Miller, commercial marketing manager for Cisco Systems, Inc.; Mark Munger, CEO of Valcros Communications and James Simpkins, partner at MTM Luxury Lodging, examined converged networks. This highly interactive session pointed to the benefits of voice, data and video running on the same network, providing lower costs and greater efficiency to end-users.

Miller said, “Demand is increasing. Technology helps to generate and provide precise and timely information that hotel providers need in order to efficiently operate their hotels while guests have increasing demands of technology in order to communicate, conduct business and access entertainment while they are traveling.”

Simkins described the operator’s side of convergence. He examined the value of centralizing IT support and said one of the biggest challenges is retrofitting existing properties when operating a single, converged IP network.

Munger focused on IP communications design, build and support. “The network (Internet and Intranet) is the conduit enhancing your ability to communicate, deliver and monitor the guest experience. The network enables staff, vendors and the guest to create a better environment thus improving the guest experience,” Munger said. He said being proactive is the way to go. “Build it because it will come whether you want it or not,” he said.

One room down, Pete McEvoy of BearingPoint examined service-oriented architecture. He explained that SOA is a style of design, deployment and management of software infrastructure and applications where the primary functions of applications are organized into services. Other aspects include quality of service characteristics, such as response time, security and transaction recovery, and are explicitly identified in the design of the architecture.

The benefits of SOA that McEvoy discussed in the session include: reuse of business behavior, defensible technology business case, isolation of volatile technology components, externalization of behavior and extensive vendor support. He also examined staffing impacts as well as technology impacts from SOA and touched on increasing reliability.

After lunch, attendees had something else to learn, how to handicap a horse! Professional handicapper, Joel Cunningham of the Florida Thoroughbred Breeders and Owners Association lead the group through a live simulcast of the Louisiana Downs, and explained the basics of analyzing some of the horses most likely to win and how he chooses them. Many of the attendees wanted to continue to try out their new handicapping skills, but the group photo had to be taken. 

Following the group photo, the Six Sigma session by Gerry Sequeria of ICP International proved a very interactive session. Many companies align Six Sigma with business strategies, and provide process improvement projects and achievable business results. Sequeria said, “Six Sigma is balancing what the customer is looking for with what we can provide, and finding what is waste in the process and what is adding to the customer experience.”

Carol Pride, CIO of Pinnacle Entertainment, said the most beneficial thing she has seen with Six Sigma is a consistent vocabulary when the practice is followed.

Sequeria said, “It (Six Sigma) not only gives you a special vocabulary, it gives you a common metric. It is a common measurement scale across disparate segments like F&B versus front desk, for example.”

Paula Winkler, VP and CIO for Carlson Hotels Worldwide said that Carlson Hotels has been using Six Sigma for about 4 ½ years. “It took about two years before we began to see the benefits,” she said. “Executives from different areas were able to discuss problems at a similar level and understand what each was going through.”
With Six Sigma, the theory is do it right the first time. “If we do it right the first time, we exceed the customer expectations and there isn’t the waste,” said Sequeria.

After dinner that evening, guest speaker, Ann Cline took the stage and discussed, “Connection without Connectivity.” Ann Cline is the manager of emergency response for AirTran Airways and has served as Cisco ICM administrator and analyst for AirTran’s call centers–the largest media-terminated call centers in the United States–linking end users with IT. Not only did she give an overview of her position, the airline and some of the issues she deals with on a day-to-day basis, but she very generously gave away two round-trip business class tickets to lucky winner Gustaf Schrils of InterContinental Hotels Group. Also that evening, event sponsor Capton picked the name of Mark Sutten, CIO, Royal Caribbean International & Celebrity Cruises to win a putter for use at next year’s golf tournament.

The following morning at the final session of the summit, Kevin Kimball and Barry Shuler of Marriott International, Ken Barnes of White Lodging Services and Dwight Smith of Marriott Vacation Club International gave the attendees a glimpse of how Marriott manages technology within 2,800 properties in 64 countries, what it means to be a brand management company and how the role of the CIO has changed.

Kimball said, “We have two customers; guests who show up at our hotels, and the owners and franchisees.” Barnes and Shuler explained that Marriott uses a technology advisory committee including select franchisees to help set brand standards and then presents them to the rest of their owners and franchisees.

Shuler explained the value of keeping an open dialogue with their franchisees. “Two years ago we had a converged network workshop. Those franchisees were instrumental in that two-day workshop. We are not just reaching out to franchisees, we are getting our own organization aligned in the process,” Shuler said.

Kimball said, “Brand standards are really important because when you show up at a hotel of ours, you don’t know if it is a Marriott-owned hotel or a franchised hotel. You just show up at a Marriott. Ten years ago, we put together a set of principles. We had 20 different PMSs when I came, now we are down to three. If the proof of the concept is good, we have to decide if it will become a standard.”

Barnes and Smith then described how the role of the CIO has changed. It has taken a long time to build trust between the different departments. Barnes explained how he has had to cross over from just being the IT guy. “Even though I am an IT guy, I am having to learn to understand other aspects of our business like HR and hiring now,” he said.

Marriott depends a great deal on its field services to deal with vendors outside the United States. Additionally, Shuler said, “We try to hire the best and brightest people we can. Well informed people generally do the right thing.”

And that is what we had at the end of the summit, well-informed people. Before heading to the airport, Rich thanked the event sponsors and all who attended, promising another great event next year.
-Submitted by Kris Burnett, Hospitality Upgrade

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