Being a Smart Buyer When Purchasing Hotel Technology
By Adria Levtchenko CEO & Co-Founder, PurpleCloud Technologies | February 24, 2019
Technology is significantly impacting nearly every area of hospitality. This includes obvious ones like brand and property web sites; guest reservation and communication systems; revenue management systems; and in-room Internet and entertainment as well as others that are less obvious to the average guest.
In the latter group, we can include technology for computerized HVAC systems, security systems, housekeeping and engineering, hotel operations and management, staff recruiting and other human resources functions, right on to all phases of financial planning and reporting.
Competitive targets keep moving and potential budget allocations keep growing. How can we make the right choices and successfully implement these technologies, which are expensive up-front investments and subsequently ongoing expense items, for all hospitality organizations? Areas to consider include prospecting of potential technologies, the purchasing decision, "selling" the technology to all stakeholders and those who will be using it daily, training and implementation, and identifying who "manages" the technology.
In this article, we will focus primarily on the first part of this strategic process, identifying and evaluating technologies and making the purchase decision. Among our considerations are the pitfalls that organizations should navigate around, which include avoiding costly and confusing redundancies or early obsolescence.
Hotel owners and executives are busy people, being pushed and pulled in many directions. However, while any hospitality organization will have a director of information technology on-staff or by consultancy, it is important that the organization's key executives and managers have a good working understanding of the technology sphere. They will be the ones making the final purchase decisions, and, ultimately, be responsible for the results. Technology adeptness is simply part of the modern professional skill set in hospitality.
Today, when the future seems to be pushing the technology envelope so quickly, one can get overwhelmed-maybe, over-enthused, about concepts like artificial intelligence (AI), machine learning, neural networks, block chain and so on. Certainly, we need to be aware of these concepts and their future promise for hotel operations, management and finances. However, it is more important to have a strong grasp of the technologies being commonly employed in the hospitality space and how they may work with each other.
Practical examples include the process behind reservations systems, including their integration into payments and other accounting functions; the now-multiple ways to unlock guest rooms and keep track of the "keys"; or the process of initiating, assigning and tracking an engineering work order. This latter system can include the ordering and inventory of replacement parts, detection of common issues or assigning refresher training to technicians, which demonstrates the ways in which technology systems can "cross-talk" today.
Importantly, technology implementations stretch broader than what we may think of as conventional information technology, i.e. the gal or guy who keeps the computers running. Make sure when evaluating prospective technology to include managers from appropriate functional groups like housekeeping, engineering, security, human resources, staff training, brand communications, revenue management, group sales and so on.
The lesson here: what the technology does is equally as or more important than how it does it.
What and How to Purchase: Dream Sheet or Solution Sheet?
We know quite a bit about technology being used in hospitality operations, management and investment; and what systems we already have in place across our organization.
What's next? Now, it is time to honestly evaluate these existing capabilities: the systems in use and any current issues with them, as well as what we would like to do better (accuracy, cost, staff and guess satisfaction) or accomplish what we can't at present. The result should be a practical technology inventory and prioritized "action" sheet.
There are many great avenues for getting help in making the needed purchase decisions. For starters, the major national brands will have established technology development teams, which have designed, built and tested many of the systems in use. As we know, some of these systems may be deemed mandatory, or, let's just say, highly recommended. So, for franchisees, working with your brand partner is a good start.
Next, it may be helpful to work with a technology consultant. This individual will be able to complete a technology survey of existing platforms, interview key executives as to the organizations goals and perceived needs, develop the action sheet just discussed, and, possibly, help negotiate purchases made with technology vendors. One advantage here is that an experienced technology consultant should have an excellent handle on today's best technologies, where the industry is headed and implementation and integration challenges.
One of the key tasks for any technology consultant is to ensure that any proposed technology investments integrate well with and don't overlap or conflict with existing systems. Compatibility and greatest functionality per dollar spent are the orders of the day. Last, make sure that the consultant does not have any undisclosed business relationships that might taint the recommendations or negotiating process.
Getting ready to write the check. Technology projects often entail a hefty capital investment, as well as expense for setting up new equipment or systems, startup and ongoing staff training, and ongoing maintenance. Redoing a mistaken implementation is equally expensive. Be sure you have a clear idea of total costs (capital, training, ongoing) for any intended project.
Given these considerations, many larger organizations may choose to conduct a formal RFP process and solicit competing bids for proposed technology implementations. As with other hospitality cost centers, this level of formality may help with the technology discovery process, as well as having everyone in the organization be on the same page.
Cost control approaches include looking for a technology vendor that is willing to do a pilot project as proof of concept. Also, consider vendors who will warranty their work and offer some type of performance guarantee.
Technology Triple Play: Security; Integration; Resources
Regardless, in today's information technology environment, no matter the implementation, key issues to consider include the security of the platform and the data it processes and transmits; how systems will be integrated across the entire functionality; and whether we are deploying appropriate resources to the task at hand. Let's consider a couple of examples to illustrate some of these points.
One of the biggest tech buzz-phrases heard these days is cloud computing, sometimes also referred to as IoT-the Internet of Things. For the most part, we are moving away from companies having to maintain full-fledged servers on site to handle most transactions, both guest services and back of house, or generate and secure multiple backups. The computer hardware, networking and software applications have always been a substantial line item, including for on-site IT personnel to maintain this capability and for constant upgrades of computer power, storage space and applications.
With each passing day, more and more hospitality functions, which means the storage of data and the computational steps applied to that data, are migrating to the cloud, with important advantages. Less computer hardware, particularly servers and backup drives, need to be maintained in-house and the solutions vendor will also be responsible for updating and maintaining software installations. It is relatively easy to maintain multiple backups of key data, service multiple locations and bring any one location back working should a natural or man-made disaster disturb operations.
Certainly, security is an issue, as evidenced recently with major hospitality entities. However, local networks are equally vulnerable to internal or external hackers, including ransomware, as some police departments in the U.S. have found out. Data we hold in the cloud is just as "real" as the data on a hard drive on our desk. This scenario is cited as an example of ways of thinking about technology, however understandable, that can lead to excessive expenditure or early obsolescence.
Another adoption principle is that technology applications must be assessed in aggregate; adding one solution may impact needed resources in another area. For example, many of the hotel task optimization platforms now being adopted for operations or management use a property's existing Wi-Fi network for communications. We often find that such networks, used primarily by guests to access the Internet, have weak reception and transmission zones that must be tweaked for these expanded uses. Better to find out as early as possible and budget accordingly. In addition, Wi-Fi protocols and capabilities continue to evolve rapidly, making it important to find that sweet spot between too much and not enough capability.
As we have discussed, technology is an essential component of contemporary hospitality operations and management. It is also an expensive one. Missteps and do-overs can be extremely costly to the bottom line, especially if they impact daily operations, the guest experience or staff productivity and morale.
Guidelines for being a smart buyer of hospitality technology include drawing on the resources of brand partners and specialist consultants; accounting for the full costs of implementation, which includes capital investment, training and continuing maintenance; and getting relevant input from your team.
However, introducing new technology in hospitality is much more than an exercise in trying to keep up with the Joneses. Today's best technology platforms can offer significant advantages toward achieving meaningful strategic goals like controlling costs, improving guest satisfaction scores or staff retention. Just remember, you are not buying a technology or hardware, per se, but a desired functionality. Do your technology homework well and you will stay in control of the buying conversation.
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