Our Occupancy Is Up: Are Profits?
By Connie Rheams Global Business Development, Altiuspar | January 27, 2012
Many hospitality industry executives instinctively feel that technology is both a blessing and a curse. Yes, technology increases productivity and enables new ways of communicating with customers, but it also creates new challenges as distribution channels emerge, and new headaches when the technology doesn't work the way it's supposed to-which seems to happen all too frequently. Urban legend has it that more than 70 percent of technology projects fail. That's likely an exaggeration (it all depends on how you define "failure," of course), but it is true that far too many implementations do not provide the expected benefits.
Part of the reason for this lack of success is that most technology initiatives are planned around the technology, not the customer. In today's competitive market, with constant pressure on profitability, hotel operators need a better strategy-one that focuses on the business from start to finish.
A recent survey by New York University and PhoCusWright Inc. (The Effects of Emerging Technologies on the Travel, Tourism and Hospitality Marketplace, Jan. 2006) of 95 executives from various sectors of the travel industry confirmed that most executives recognize technology's potential to provide real business benefits. The key motivators cited for investing in new technologies were: improving competitive position (85%), controlling costs and increasing customer satisfaction (both 76%), and streamlining operational functions (73%).
And technologies that are aimed at providing these benefits will, at least in the near term, continue to be given greater emphasis than emerging "novelty" technologies such as mobile technology and RSS. The respondents ranked data mining, data warehousing, metasearch and business management applications as being particularly important to their business operations.
But although most technology projects are implemented for a business reason, most IT organizations don't really have much skin in the game when it comes to accountability for the benefits.
Benefits realization (defined by Gartner Group as "the discipline of ensuring that business initiatives deliver expected benefits") requires that IT organizations focus on the benefits life cycle rather than the systems development life cycle. Traditionally, IT organizations have considered their role largely complete-aside from whatever ongoing training and support might be needed-when the software is implemented and confirmed to be functioning as intended. If the system is delivered on time and on budget and with the required functionality, IT views the project as a success.