Issues And Assumptions Of Hotel Mangement

Issues And Assumptions Of Hotel MangementThe following report is a unadulterated analysis of the outrigger Hotels and Resorts case that describe the present-day(prenominal) Information Technology (IT) being utilize by this unbendable and the Information System resources that are being employed by Outrigger Hotels and Resorts. We will first start by giving a brief background history of the company and then analyze the new backing structure and the Information System currently being employed. Key Issues and assumptions are identified from the case and thoroughly analyzed. Additional SWOT (strength, weaknesses, opportunities and threats) analysis questions are answered and fin anyy, additional recommendation on how Outrigger provoke improve their current IS and IT infrastructure are countenanced to improve the future outcome of Outrigger Hotels Resorts.INTRODUCTIONOutrigger Hotels and Resorts is a management company that is have by its holding corporation, Outrigger Enterpris es. It is one of the largest, privately-held leisure lodging and cordial reception crocked in the Asia Pacific and Oceania. With quick growth, Outrigger is expanding its presence throughout the Hawaiian Islands and the south pacific. By the dawn of the 21st century, the pains was estimated to have exceeded $295 one thousand thousand in sales (Outrigger, 2010). With much than 60 years of hospitality experience, Outrigger has a diverse product portfolio that allow highly successful, multi-branded line of hotels, condominiums and vacation resort properties, including Outrigger Hotels resorts, OHANA Hotels Resorts and Outrigger Condominium Collection (Outrigger, 2010). It is considered as one of the leading finish and vacation spots in the Hawaiian market with above average performance levels of the global industry (Piccoli, G., 2005, p. 106).KEY ISSUES AND ASSUMPTIONSMain focus is to gain agonistic advantage.Currently in waves 1 and 2 of the Waves of conversion increase of its electronic interfaces with their wholesalers. exclusively not all wholesalers were fire in automatingThe trustworthys meldd CRS/premenstrual syndrome (Central arriere pensee System/ plaza Management System) IT infrastructure Stellex, failed to move with a modern plan that was thought to alter connectivity with the other off-the-shelf computer placementsHaving a Central Reservation Office (CRO) operating in Denver, Colorado. Reservations were centralised for all properties in Hawaii and beyond Hawaii, reservations was taken at each property.Issues with distance, high telecommunication cost and unacceptable reliability of worldwide network led to a decentralized structure. belligerent pressures raising the immenseness of integration as large branded hospitality and resort companies are hurt into the market. trip out agents and wholesalers were decision the condominiums hard to selladvancements in technology and the overall internet boom proving a challenge for outr igger to pre make out up with and jeopardizing Outriggers future stabilityDetailed descriptionThe main concern that Outrigger had was to analyze the current outriggers assembly line strategy and to come up with an appropriate IS vision, IS architecture, and a strategic IS plan for outrigger hotels and resorts that not only gives Outrigger competitive advantage plainly also visits future stability and success of the firm.When looking at IT and how it is used by industries and enterprises, waves of innovation chart is used (provided in the appendix, figure 4) that identifies the current evolution of IT within a firm (McNurlin, Sprague, Bui, 2009, p. 46). Currently, it is our assumption that Outrigger Hotels and Resorts are in Wave 1 and Wave 2. Their main goals are to reduce cost (Wave 1) and in leveraging investments (Wave 2) that focus on cutting cost through brass instrumental effectiveness duration increasing corporate assets and profitability (McNurlin, Sprague, Bui, 2009 , p. 47). Outrigger achieved in reducing costs by automating manual processes to wholesalers such as billing and invoicing generating presidential termal effectiveness. They gained competitive advantage by implementing the electronic interface to be used by wholesalers. As shown in stick out 4, both Wave 1 and Wave 2 are down the stairs the line as this identifies that systems were developed mainly for administration, finance, and manufacturing (McNurlin, Sprague, Bui, 2009, p. 47). Further much, with the outsourcing of their website and web table services, they introduced online chat to better help their customers and provide much information to them. Although this can be regarded as Wave 5 under the Waves of Innovation as it shows how IT is used to communicate directly with consumers, thereby leading to new marketing, distribution and service strategies (McNurlin, Sprague, Bui, 2009, p 47). Also what can be considered under Wave 5 is the adoption of a dynamic package that O utrigger serves that appeals to travellers, suppliers, even travel agencies. It provides the option and flexibility to choose air, hotel, car rental and even activities, ticketed single-handedly and then priced out as a bundle to the buyer. This is another example of how Outrigger is reaching consumers and creating opportunities (Wave 5 in Waves of Innovation) by directly communicating with their prospective clients, making use of internet and e-commerce (McNurlin, Sprague, Bui, 2009, p. 47).Outrigger Hotels and Resorts historically maintained a highly centralized organization structure. As the firm grew in size from Hawaii localisation of functions and expanded multinationally such as Australia, Outrigger remained consolidate and offered centralized services where possible such as in accounting, IT, finance, engineering, purchasing etc. The challenge that was presented with their Australian resorts was of distance and real-time coordination of the reservation system with the c entral reservation service.Within the IT infrastructure, the firm mat that its current centralized IT infrastructure was the source of competitive advantage. Their software Stellex was an integrated Central Reservation System/Property Management System (CRS/PMS) which was upgraded to Stellex 2.0 in 1992 to provide revenue management functionality and reservation center jut. But with the enlargement of the firm internationally, they ran into issues such as high telecommunication costs to and from Hawaii and the unacceptable reliability of international networks. Therefore, they did not extend their centralized mould to their operations in Australia and the Pacific.Outriggers IT professionals did minimal finish program development wrote customized reports, and tack to doher and interfaced with off-the-shelf applications. Even their website development and web services were outsourced and hosted by a third party in Portland, Oregon.Their main competitive advantage that outrigger had was the development of real-time electronic interfaces with wholesalers as mentioned above. Outrigger felt that with the use of technology, electronic interfaces will generate substantial efficiencies, including automatic billing and invoicing without human handling and thus lowering costs. But not all wholesalers were interested in automating reservation processing. The lack of interest was generated from those doing small operations or those for whom Hawaii and the Pacific represented a small percentage of line of descent. Not only that, but the electronic interfaces proved to be expensive to maintain and replace and didnt provide the expected goals that Outrigger envisioned to gain to get beyond their competitors (Piccoli, G. 2005, P 113).System integration is the trend that allows different departments to have communication and information settle amongst each department and thus making technologies and systems co-exist with one another to work unitedly. This is usually a ccomplished by implementing and ERP system that provides the accessibility of working from a single computing weapons platform integrating different departments and functions crossways an organization (McNurlin, Sprague, Bui, 2009, p. 333). With stellex software though, it failed to migrate with the modern platform that integrated other off-the-shelf application hypnotism outrigger to re-evaluate Stellexs role. Additionally, Stellex also failed to interface with outriggers Point of Sales (POS) system which were old and needed to be upgraded first. Therefore, the whole wander was aborted.Outriggers management is also in need of change management. They had this misconception that they did not want to extend their centralized model in operations because of high telecommunications cost and the unacceptable reliability of international networks. They had no central servers, sustain alone systems and their use of outsourcing was limited to website development and hosting. Their data management systems consisted of data marts setup to hold luxuriant information for a maximum of common chord years, and later they would consolidate this data for aggregate analysis. Overall, Outriggers management felt that their IT function was enabling them double-dyed(a) success and that their IT function would be able to operate more expeditiously than its competitors.QUESTIONSWhat are Outriggers most important internal business strengths and weaknesses, as well up as, the external opportunities and threats to their competitive surround?StrengthsThrough Partnerships and management agreements with third party owners, Outrigger added properties on Maui and Kauai and grew to 26 locations in the Hawaiian Islands. Furthermore, through partnerships, enunciate ventures, acquisitions, and new developments the firm grew internationally adding properties in Guam, Fiji, Tahiti, Australia, and rude(a) Zealand thus becoming geographically dispersed.They also begain to beam their pro duct portfolio by adding condominium resortsThe changing of their name from Outrigger Hotels Hawaii to Outrigger Hotels and Resorts and rebranding their off beach hotels in Waikiki to base a new hotel brand name OHANA Hotels of Hawaii. OHANA became the largest Hawaii-owned operator in Waikiki catering to budget travelers looking for revalue on off-beach properties.Even though they were expanding their firm and buying properties (both on-beach properties/condominiums and off-beach budgeted properties) their commitment in their identity remained the same. Providing hospitality and wiz of place to their guests visiting and a leisure experience that is rich in culture and the characteristics of their destination.2004 data showed outrigger as being the stronghold in the Hawaiian market with performance levels above the average of the global industry. By 2005, Outrigger had a portfolio colossal US $1.4 billion and approximate revenues of US $45 million. It awarded their success of the ir destination markets and to the offbeat of airlines serving its destinations. Being quite isolated from any large population pool, Hawaii is a genuine destination market with an exclusive fly-in customer base.Their Stellex software proved to be an anchor from which all in operation(p) systems connected, including telephone switches, call accounting, and in-room entertainment. All the Hawaiian islands had access to Outriggers centralized IT system which was served from the Honolulu-based data center, through the firms massive Area Network.Their management of their multicultural and multilingual employees and guests in a multicultural environment adding to the richness and culture of their organization. Also, engaging in a non-unionized business in a heavy unionized Hawaiian crunch market.Operating properties that have good location, strong travel distribution network and employees who provide hospitality from the fancy adds value and creates a differentiated product. David C areyUse of outsourcing was limited to website development and hosting.WeaknessesEven though condominiums represented an increasingly important share of the total portfolio of properties, travel agents and wholesalers found them hard to sell. Not only are condominiums expensive, but they were also complex and proved to be a non-standard product from what Outrigger offered. It appealed to independent travelers and are built to serve as primary or vacation homes for the tenants offering little office or staging shoes for management companies to operate in. They also lacked typical hotel services and departments such as food and beverage, room service, laundry, and everyday maid services. Thus, there was a lack of reasoning involved on Outriggers behalf when they decided to expand their firm into condominium market and acquiring expensive properties.As Outrigger started to diversity their product portfolio, the profile of their customers and competitors also changed. traditionally tar geting to middle class travelers and families with income below $100k a year, they became to target towards leisure travelers. A typical guest staying at their premium brand was often a multigenerational customer with a sense of loyalty to the brand and an income exceeding $75,000. Their guests became exclusive leisure travelers.Outrigger still relied on the traditional system of faxing. Reservations were taken at each location and almost all the reservations were faxed to the property.Although Outrigger was expanding rapidly, they had yet to find an integrated solution for international properties namely for operations in Australia and Pacific. Having centralized stand alone systems or legacy systems. It created high telecommunication costs to and from Hawaii, as well as international networks proved to be unreliable.Their Stellex software failed to migrate to a more modern platform that was thought to simplify connectivity with the other off-the-shelf computer systems.Point of Sal es (POS) systems were not centralized and couldnt be interfaced with Stellex software as they were old and needed to be upgraded first. This resulted in inefficiency as a manual strike voucher had to be manually written.Data marts were setup to hold detailed customer information for three years, but later this data would be consolidated and it would only provide aggregate analysis.Outsourcing was done to website only.OpportunitiesInvestments in condominiums provided a way for expansion to expensive properties. It created value to on-beach property location spotsCondominiums also appealed to independent travelers and couples who desired privacy.Hawaii is a classic destination marketCompetitive pressures will raise the enormousness of integrated system and the benefits that come on with it within Outriggers IT infrastructure. Better integrating of its international properties is a important stepping stone to the firms continued success.With the increasing competition in its key ma rkets, outrigger should also look towards fortify their electronic presence and relationships with their distributers, improve their trademark hospitality and customer service.ThreatsMore competition from larger brand competitors entering into the market. Hawaii is the classic destination spot and many competitors are entering into the Hawaiian market. More larger branded hospitalities and resorts are entering into the Hawaiian marketNot all the wholesalers were interested in automating the service of billing and invoicing for small operationsIT infrastructure needs to be upgraded and changed to keep up with modern platforms. Competitive pressures will raise the greatness of integration systems within Outriggers IT infrastructureThe change in the overall hospitality distribution is also rapidly changing. Historically, travel agents would provide significant amounts of information, counseling, and reassurance to leisure travelers, but more and more consumers are turning to the inte rnet for this information. Thus, Outrigger should challenge populating the new electronic world and create a omnipotent presence. The emergence of online agencies such as Expedia has created significant opportunities and threats.Explain the strengths and/or weaknesses of Outriggers existing infrastructure i.e. Information Systems Technology, heap (users and IS staff), and Data. Include your assessment of its performance today as well as how well equipped it is to relief future needs.Outrigger existing infrastructure includes the overall establishment with their Stellex software. It was introduced in 1987 as a COBOL application and guaranteed complete redundancy and 24/7 uptime. Later in 1992, and update to stellex, Stellex 2.0 was introduced by Outrigger which ran on Sun Microsystems UNIX platform and provided revenue management functionality and reservation center support. They also utilise JD Edwards ERP system as a inception for their back-office operations. This led to Out rigger having a competitive advantage by having centralized IT infrastructure (Piccoli, G., 2005, p. 111). All of the properties in the Hawaiian Islands had access to the Outriggers centralized IT systems and was served through their Wide Area Network based in Honolulu. Stellex provided the anchor to which all other operational systems connected, including telephone switches, call accounting, and in-room entertainment. Due to the high telecommunication costs to and from Hawaii and the unreliableness on the international networks, Outrigger did not extend this centralized model to its operations in Australia and Pacific. The properties in Australia and New Zealand which were all condominiums, used standalone Property Management Systems (PMS). None of the properties in Hawaii had a server on property and these other regions used standalone PMSs and on-property reservations.Additionally, Outriggers IT professional engaged in interfacing off-the-shelf applications and writing customized reports with minimal application development. The use of outsourcing was limited to the Web site that was developed and hosted by a third party in Portland, Oregon. But to maintain the integration of the direct channels, Stellex served as the booking engine behind Outriggers Web site. The development of electronic interfaces with wholesalers was considered a key initiative and was custom-developed by the firms IT group using XML (Piccoli, G., 2005, p. 113). This provided real-time electronic interfaces for wholesalers allowing them to tour of duty availability, to get reservations instantaneously, to provide automate billing and invoices, and ultimately lowering any estimated costs. However, not all wholesalers were interested because of Outriggers small percentage of business.In 2001, business intelligence software, a data mart and analytical tools, were acquired from E.piphany and the application ran on Windows 2000 platform. Their data management system could hold data for up t o three years, and then it would get consolidated for aggregate analyses (Piccoli, G., 2005, p. 118). Being able to harness the analytical power of E.piphany to do forecasts and generate business intelligence, outrigger could better use the data for marketing and operational analysis as well as consist information into their daily operations with improved efficiency and service to their customers.With regards to their IT staffing and organization as a whole, an organization chart has been provided in the appendix section detailing the distribution of duties and responsibilities among Outriggers IT staff. The overall IT function was organized along user needs one IT professional in charge of Australian properties application needs. The hardware support was contracted out to local vendors.Outriggers senior executives found technology a great asset to modify communication and felt confident that the IT function was enabling the firm to compete effectively and that they were operating more efficiently than their competition (Piccoli, G., 2005, p. 116). As the firm was expanding aggressively, they still had yet to find an integrated solution for their international properties. Some even questioned the viability of reinvesting in Stellex. The IS group felt that their legacy system namely their ERP, integrated PMS/CRS, and electronic interfaces with distribution partners was serving the firm quite well. They were prompted to re-evaluate the role of Stellex after a failed attempt to migrate a more modern platform thought to simplify connectivity with the other off-the-shelf computer systems in the portfolio.Outrigger engaged in limited formal technology instruction and relied mainly on on-the-job training when it came to software applications. This approach however created difficulties for people who were hired from outside the firm.With the latest advancements in technology, even the guests who follow to resorts expect to have access to their technological needs . Eg wireless access and thus outrigger should look into future to provide that feasibility to their guests. Additionally, it would be best to strengthen their internet presence and populate the electronic world strengthening their electronic relationships with their distributers, improving their own trademark hospitality and customer service. Although currently their firm is doing well, but for the future, a better integrated system that connects all the international properties is a crucial step in enabling the firms continued success. Developing a right kind of information strategy and developing a enlighten vision for the role of IS and a solid IS architecture are a crucial step in enabling these goals.Based on your assessment of the case, state your key recommendations and rationale to Outriggers senior management to ensure that it competes successfully.To compete successfully in the future, a key recommendation for Outrigger is to implement a change in their overall current I T and IS systems and strategy and look towards the advantages that are offered by a complete ERP system. An ERP system aims to integrate corporate systems by providing a single set of applications from a single application (McNurlin, Sprague, Bui, 2009, p332). Although Outrigger has already implemented the JD Edwards ERP as their back-office operations, its more advantageous to have the ERP system integrating the whole overall different departments and properties together with one module and have information flows in real time. These days, an ERP system is used extensively in almost every major organization whether it be in manufacturing or distributing services, an integrated ERP system allows a firm to gain competitive advantage. Not only that but competitive pressures have raised the importance of integrating business processes and thus, the underlying information system. Additional motivations for ERP implementations are provided in Figure 4 outlining the advantages of an ERP s ystem implementations. To realize the benefits of ERP, Outrigger must therefore change its organizational structure and culture.APPENDIXCASE 1 OUTRIGGER HOTEL RESORTSOutrigger presidential termFigure Organization ChartOutriggers InfrastructureFigure Timeline of Major Infrastructure Developments at OutriggerWaves of InnovationPicture2.jpgFigure Waves of InnovationMotivations for ERP implementationsFigure Motivations for ERP implementations