Proactive Change Management: Best Practices for Revenue Tech Readiness
By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | April 28, 2019
Love it or despise it, technological change is constant in our modern existence and professional lives-and the rate of change is exponential. Consider that by the year 2000 around two billion gigabytes of data had been amassed worldwide. Now, less than two decades later, that same amount of data is generated on a daily basis.
Keeping up with the pace of change is hard. Adopting and implementing the latest technology requires an agile business culture. And culture is the key word. The greatest obstacle to your successful change isn't the technology you use-it is, first and foremost, a people challenge.
Change management in revenue management comes down to how hotels transition their individuals and teams and align their resources, processes and technology to meaningfully restructure their organization toward a common goal. And with many hotels now actively pursuing total revenue performance strategies, hoteliers must ensure they keep up the pace and smoothly implement these analytical revenue management approaches throughout their organization.
Before investing in a revenue management system (RMS), hotels need to ensure their house is in order. Let's take a look at how hotels can effectively manage the impacts of applying analytically-driven approaches on their people, processes and technologies.
Think about your organization's change-management culture. What's its commitment to change? When you have an RMS, your hotel will run differently than before. Hoteliers need to figure out who is going to apply sophisticated analytics within their organization. The role of a data scientist is becoming an essential component of an effective revenue management strategy. In-house resources are also becoming more common in larger organizations.
There's also been a lot of recent discussion around the opportunity of a cross-departmental data scientist who can apply their skills where needed, while balancing the overhead costs to maintain this new role. External resources and third parties that can provide analytics as a service are also available. Dedicated support services for analytical technology and processes ensure hotels can perform at their maximum potential.
Restructuring a hotel organization around new processes requires an active, engaging transition plan for employees and teams that supports the new direction. This may involve adding new leaders, redesigning job roles and responsibilities, and developing a higher standard of skills and capabilities. Some in your organization will likely be eager for an RMS. These early adopters will be your allies as you move forward.
Unfortunately, others probably won't embrace the change of an RMS so readily. Some will actively resist, while others may cross their arms skeptically. Do yourself a favor and start to preemptively consider how people at your hotel will respond and what approach you will take to effectively manage these different personas.
It's normal for people to feel intimidated and resistant to changes in the processes, practices and technology they've grown familiar with, and it is important to recognize that taking a proactive approach to change will help negate the potential risks to employee morale and acceptance.
Thoroughly planning for upcoming organizational changes-and the impacts to and requirements of its people-requires comprehensive development and a structure that can adjust as the effects of change are felt at various stages. Hoteliers can begin the implementation by focusing on data collection, analyzing, planning and implementing business practices that support the new processes, technology and revenue strategies.
These efforts should also consider the hotel organization's realistic capacity for change. It is also important to recognize whether the desired change is the natural next step for the organization, or if there are more appropriate transitions that may be better suited. Moving too fast, too soon, can leave hotel teams feeling like they are being set up to fail.
Active involvement, communication and support from the hotel's executive team are critical pieces of the change management puzzle. A leadership team exemplifying the behaviors and processes expected from their own teams demonstrates the organization is wholeheartedly embracing change from the top down. This is critical to the success of any change management plan-and when teams are facing stressful situations, they can feel supported by their leaders and deliver results.
What revenue management principles, practices and standard operating procedures exist at your hotel today? How are you collecting data, analyzing data, forecasting, pricing, managing inventory, distributing rates, evaluating groups, etc.? Who is handling this?
Optimal processes should not only look at taking advantage of the analytics outputs, but also the inputs. To make analytics work effectively for a hotel organization, the company culture needs to be geared toward a common goal of data integrity and the effective implementation of analytical decisions.
If you don't already have documented revenue management processes in your manual environment, you should develop some basic standards. Why? Because one of the many benefits of having an RMS is automation. It is not as effective to add an RMS, which continuously manages these various areas on a daily basis, when nothing is currently in place or it is being done differently depending on who handles it.
Change is a process in itself-and different levels of a hotel organization are going to be impacted by the progress of change. Hotels should outline the current state of their organization, transitionary periods and the desired future outcome-and how they are going to involve every layer of the organization for a smooth flow throughout every department.
To drive change, you must also train in a different way. Identifying, training and aligning the appropriate leaders at every layer and communicating progress and messaging to the entire hotel will help make the transition from point A to point B a manageable and successful process. Create an internal learning owner accountable for team proficiency by launch and beyond and use your new RMS's online courses to prepare for instructor-led programs.
Finally, create regular, active, joint working sessions with your team and partner to tackle questions and challenges. This creates situational relevance and reinforcement. Your team should work together to solve problems and share their real-life experiences to foster ongoing learning.
Believe it or not, technology can be the easiest part of this as it plays a supportive role for your people and processes. It frees hotels from being spreadsheet dependent. An RMS becomes the single source of truth as opposed to multiple versions of the truth which exist throughout your property.
Technology removes the emotion from revenue management. Analytically-derived, science-based pricing decisions are made from what an RMS knows will happen versus what someone feels or thinks might happen. Automated, user-directed reporting becomes accessible across your organization and eliminates all the time previously spent creating manual reports.
Analytics help hotels move even further beyond the normal revenue management processes into harnessing data and forecasting capabilities to explore, predict and optimize revenue results. Today's analytics help hotel organizations explore why patterns and trends are happening to predict whether similar or different results will occur moving forward. By determining why specific results are emerging-and if they expect to continue-organizations can then start to optimize them by working to get the best effects and deliver revenue performance.
There are many aspects of analytics and technology that play a role in delivering optimal results. High performance forecasting capabilities provide a dynamic selection of hundreds of forecasting algorithms and models to give the best possible results; granular data and decisions can be provided for multiple hotels by departments, segments, room types, day parts and rate codes; predictive analytical tools allow hotels to understand the impacts of changing strategy; advanced pricing and inventory controls maximize revenue opportunities; and expanded data sources such as reputation, competitive performance, rate shopping and value of demand can be integrated into decision outputs.
Total Revenue Performance
Total revenue management for the hospitality industry will become a reality sooner rather than later. As revenue management becomes ubiquitous in the hotel industry and moves beyond guest-room-only optimization to other areas of the business, we realize the growing awareness of the benefits of a holistic revenue management culture.
To successfully roll out total revenue management practices, an established revenue management culture is needed. This is a journey all organizations trying to achieve total revenue performance need to take, and it impacts their people, processes and technology. For many, the understanding of the revenue management principles is the easy part; it's the "change" of perceptions and habits that becomes more complicated for hotel organizations.
So, how can we facilitate "change" in our organizations? As revenue managers, we keep pushing but resistance is there. A revenue manager's role has and continues to change with the evolution of revenue management practices. Leadership is becoming a key revenue manager's capability, not only because we need to challenge the process, but also because we need to look for advocates that will follow our lead and help us adopt a strong revenue management culture.
The hospitality industry continues to evolve, change and innovate. It is essential for today's forward-looking organizations to ensure they are moving up the revenue capability ladder to effectively apply analytics across their income streams. The race for total revenue performance is relentless and only those with the capability to adapt quickly and effectively will ultimately benefit from these sweeping changes impacting the industry.
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