Ahead in the Clouds

Jul 12 2016   2:15AM GMT

How cloud is helping the hospitality sector go that extra mile for customers

Caroline Donnelly Profile: Caroline Donnelly


In this guest post, Dr. Peter Agel, global segment leader for hotels at software giant Oracle, explains how pay-as-you-go computing is helping the hospitality sector improve profitability and respond to changing consumer demands.

Like every consumer-facing business today, the hospitality industry is confronted with unprecedented—and ever-increasing—demands from customers. To stand out from the competition, hoteliers at every price point are striving to provide a smoother, friendlier, and more personalised guest experience.

To do that successfully, organisations need to identify, adopt, and integrate new technological capabilities as soon as they become available. Otherwise, each new development becomes a negative differentiator—something you can’t do but the other guy can.

The CIO should lead this process of ongoing innovation, but assuming this role within the hospitality sector has typically been a challenge, because of the industry’s fragmented approach to IT.

Typically, each individual site has their own IT team running their own servers, carrying out maintenance and software upgrades, and collecting its own data.

In companies where a centralised system exists, hotel staff can and do bypass it in the interest of, say, getting a guest checked-in quickly. If there is no record of a certain guest in the hotel’s database, rather than waste time checking the central data repository, a busy desk clerk may simply create a new record on the spot.

In such an environment, it is extremely difficult to upgrade system capabilities without adding a lot of bolted-on point solutions, which in turn makes the system even more difficult to maintain and scale up.

Opportunity for innovation

Cloud offers CIOs an opportunity to leapfrog over these structural difficulties by moving, organisation-wide, to a simplified environment that is secure, stays current, and can scale rapidly. Through its cost efficiencies, it can also enable them to develop and add-on their own proprietary innovations.

By replacing the traditional, decentralised hotel-chain IT structure with a centralised, easily maintained and upgraded system, CIOs are afforded the opportunity to stop being the guy who keeps things running to someone who works hand-in-hand with the organisation’s business stakeholders to drive innovation.

The case for innovation in this industry is not hard to make. The entire travel sector has been feeling the aftereffects of the economic crisis, while online travel agencies sought to disrupt hotel chains in terms of distribution cost and customer relationship management.

Hoteliers have responded by attempting to build a direct relationship with their customers, while seeking out opportunities to merchandise and upsell.

Creating these relationships, however, has yielded challenges of its own. Hoteliers are inundated with bits and pieces of information, which collectively promise to unlock vital insights into their business but lie scattered and inaccessible throughout their operations.

Bringing it all together requires a digital technology management system or repository, where the data can be tapped quickly and easily by any qualified user and shared enterprise-wide in an instant.

Greater security and data integrity

Moving from a local IT model to the cloud is a major change, though, and there is an understandable hesitation in the industry about making (what can appear to be) such a radical step. While some hotel companies are aware of the advantages of the cloud and are working toward making the transition, a greater contingent is held back by concerns about system security and data integrity. A centralised function that is off-site seems simpler, but triggers key concerns: What if I lose power? What if I lose my data?

Though seemingly counter-intuitive, it can be argued these problems are less likely to occur in a cloud-based system. By its very nature, data processing in the cloud is distributed across a large network of servers, which means it is less likely that there is a single point of failure.

This redundancy, coupled with 24/7 global support for the systems, enables major suppliers of cloud-based services to run at higher uptime than many local IT systems.

As for data integrity, a cloud-based system could handle all customer records in one place, automatically merging and updating them virtually in real time – providing a more robust customer database than decentralised systems.

To protect this asset, major cloud service providers offer encryption, virus scans and whitelist support, and these protective systems are continually maintained and upgraded. The same cannot always be said for local IT operations.

Operational benefits

Arguably, the greatest benefit of cloud is that it takes responsibility for IT away from local hotel managers, allowing them to devote their attention to guests. Moreover, by creating a central customer database, the cloud enables hotel managers to provide even better, more personalised care as well as offer ancillary products and services.

On the enterprise level, the cloud makes it possible to stay abreast of business and technological developments without having to make unexpected investments in IT infrastructure.

Along with these reduced implementation and ongoing resource costs come automatic and universal software upgrades. Other benefits include increased power, storage capacity and performance, and a drastically shortened deployment process.

With the tumultuous challenges facing the industry today, it’s no wonder hoteliers are kept awake at night with weighty questions: How can we broaden our array of services or enhance interactions with customers? How can perishable inventory – a room that stands empty for a night is revenue lost forever – be better distributed? How can work efficiency be increased? Fortunately, some answers can be found in the cloud.

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