Ict & E-Commerce for Hospitality Industry

ICT & E-COMMERCE FOR HOSPITALITY Module: ICT 106 Institute: Ealing Hammersmith and West London College Submitted by: Jabedur Rahman (ID: 765453) Submitted to: Mr. David Preston Submission Date: 1 March 2011 Contents * Executive Summary * Introduction * Discussion A. >The application systems used by Marriott Forest of Arden, And The principal technologies used in its operation B. >The management information systems used by the hotel And their roles in both the identification and delivery of business. C. >How modern trends might effect the technology. With Supporting arguments. * Conclusion * References

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Executive Summary The discussion of the report is divided into three parts. The first part will describes the existing principal technology and computer based application used by Marriott Forest of Arden hotel through Value Chain. It will mostly focus on operational aspect, how the technologies help the smooth running of the guests stay and of the hotel from day-to-day. The second part will focus on different information systems used by the hotel and its role in identification and delivery of business strategies for the hotel. It will also say about how MIS helps managers and executive directors to make decision.

The third part will discuss on where is technology going and how is that going to affect the Hotel and the systems which appear in part one and two. Finally the entire discussion will come to en end with supporting arguments and references. Introduction: Marriott Forest of Arden Hotel and Country Club is a four star luxury brand hotel operated by Marriott Hotel and Resorts. It is a franchise hotel located four miles away to the east of Birmingham International Airport. The hotel is famous for its golf courses and golf academy. People from all over the west midland gather her for this.

It belongs to 214 bedrooms with two large restaurants and bar, Besides that it has many other departments like C&B (Conference & Banquette), Finance, Health and beauty, Leisure Club, Housekeeping, HR, Kitchen, Maintance, Reception a large sales and marketing team. Particular department has particular function for the operation of the hotel. The application systems used by Marriott Forest of Arden and The principal technologies used in its operation The Marriott Forest of Arden is run by three major functional areas- HR department, Finance department, Sales and Marketing department.

The front desk, concierge, bar, restaurant and gymnasium work for its operations. There are different software systems used by each of these areas. They help the smooth running of the guests stay and of the hotel from day-to-day. It will be easy to understand how our hotel runs if we take help of the Value Chain model of Michael Porter described in the book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985) ? 1. Michael Porter descried in his Value Chain how an organisation works with its different department.

He divided the total activities into two parts- Primary and Secondary activities. The primary activities are the activities related to production that include inbound logistics, operation, outbound logistics, sales & marketing and services. These primary activities are facilitated by some supporting activities. These supporting activities provide the necessary support for the effectiveness and competence of the hotel. The supporting activities include firm infrastructure, HRM, Technology development and procurement or purchasing. ?Figure 2: The Value Chain (Porter 1985)

Now let us see how the ICT contributes in both the primary and secondary activities of the Value Chain. As inbound logistics of Marriott Forest of Arden we see Marriott’s own website plays an important role for hotel booking, reservation service and different inquiries. There are some other search engines that are linked to the websites. The websites is automatically updated in every 10 minutes. The main purpose of the website is to facilitate and accelerate the booking performance and quick information supply. Moreover, ICT is used for the inventory reception, management and proper distribution.

When the necessary raw materials come from the suppliers it requires proper control and management system. Computer plays an important role for the management and distribution to manufacturing where necessary. In operation, to transform the input or raw materials to output there are also several ICT are used. For example in the kitchen there are different machines for heating, cooling, cooking, measuring, cutting etc. There are so many kitchen appliances that highly technology based like blender, digital cooker, microwaves oven, toaster, freezer, dishwasher, glass washer, coffee machine, digital hobs, ice makers etc..

These kind of suppleness facilitate and accelerate the performance and accuracy. Marriott use a distinctive operating system for its front desk. It provides a competitive advantage to the hotel. This operating system helps express check in and registration. Use of electronic key card instead of general door keys has given extra security and flexibility for the hotel guest and their own possessions. It is impossible to operate a big hotel like Marriott with no computerized guest accounting and guest data utilizing. For the sales and marketing the information technology plays an important role.

Recently, Forest of Arden hotel has started using automated checkout system. It is quick and impressive. It glorifies the POS and improved the service quality. In gym there are many digital machine are used like treadmills, digital exercise bike, vibration plates, digital rowing machine etc. These digital machines add value to the hotel by attract the guest. The restaurants and bar use Micros for its quality service in the Forest of Arden. This Micros system is very power system for the hotel. It easily communicates different departments of the hotel.

It provides accurate data of the foods & wine and money. For example, if the staff sent an order through the micros it goes immediately to the kitchen with time and special preparation Indication. Not only restaurant or bar all other departments of the hotel use POS terminal and by this actual investment often come out within a quite short time due to better cost and inventory controls. The house keeping department use cordless walkie-talkies for guaranteeing their quick customer service. They use distinctive software to preserve their data of guest and rooms and for the lost and found properties.

They department has computer management system to control heat and air conditioning. The most importantly, all the primary activities are linked to each other. It is hardly possible to ensure better performance of the hotel by avoiding any of the primary activities. ?Figure 3: Linkage among primary activities of The Value Chain Again, all the process may have some sub process. And they are also inter linked. | | ?Figure 4: Sub-process and their linkage of The Value Chain The better hotel business depends on better infrastructure of the hotel and management of the hotel.

The infrastructure of Forest of Arden is great. In every aspect of the hotel there is a wonderful use of technology. There are automatic doors everywhere of the hotel. Two lifts are available near to the reception. For health and safety CCTV, automatic fire alarm and fire extinguisher are available every part of the hotel. The system can say immediately where is the fire occurred. The HR department of the hotel uses HR payroll for its employee. It is very common in any hotel now a day. Even any small hotels use this now a days.

Moreover, the hotel uses digital ‘punch in’ and ‘punch out’ system for the employee by the ‘blue cube’. It provides accurate and efficient data of the worker for the HR department. For the procurement, the information technology also plays an important role. The accounting system of the hotel is computerized. The hotel keeps all information of the suppliers, materials or equipment digitally. It helps the hotel to take quick decision. Guest account & POS services activity Guest contact & Housekeeping services Check-out settlement Account payment Procurement lanning services Procurement & Financial planning services (Suppliers) Accounts Payable Inventory Management Check-in Guests / Room account creation Financial planning services Booking / Reservation ?Figure 5: Value Chain Linkage (Linkage between processes) The management information systems used by the hotel and their roles in both the identification and delivery of business: The management information systems are the mixture of software and hardware that used to develop or process information automatically. It is very crucial for any complex industry like hotel industry.

It helps managers and executives to perform any task relating to the processing of information it also assists him to take any short term or long term decisions. By this MIS a manager analyses data collected by different systems used in different departments and creates medium term actions for example budgeting and cash-flow planning depending on payments to suppliers and receipts from guests or sales. Again, based upon cash-flow the management can make decision what to do or what not to do regarding certain things like promotions, room rate movements, investment on certain things etc.

The Management information system works in three levels- Operational level, Business level and Corporate level. Corporate LevelStrategy-level highly aggregated databy Office System, EIS & ESS| ^Business LevelKnowledge level aggregated databy Office system, MIS, e-SCM, e-HRM, e-CRM & e-MKT| ^Operation LevelLow-level aggregated databy office system, Web based system & Transaction processing system| ^ Types of Management Information System Operational Level: This is the low level data input areas. Highly detailed data from all areas of business is put into this operational level.

The data comes generally from the office system, websites and the transaction processing system. The area of sources includes room management, housekeeping, restaurants, kitchens, conference suits, accounts and finance department and golf department. The business level is the medium level data input areas. Managers of different departments work in the level with the data found in their own department. They work on it and prepare a summary for the top level. So we can say this data is aggregated and knowledge-level. The basic sources of the data are e-SCM, e-HRM, e-CRM, e-MKT, MIS and office systems.

The Corporate level is the top executive level where all strategies or decisions are made by the top directors of our hotel. This data is highly aggregated because this data generally comes from the managers of the different departments. Lodging Touch Property Management System works on the summary of all the data of the hotel and helps the executives to make decision and strategies. The Lodging Touch Property Management System is very widely used in all the Marriott hotel chain all over the world. It is very easy to use and very little IT knowledge is required for it. According to E-hospitality. om (? 6) This system has many modules like front office operation, guest data system, account receivable, sales, yield management and travel & tourism agency. All those relate together to give a comprehensive system. This system deals in the sectors like guest information, credit card authorization, flash status, history, custom reports, yield management, query wizard, stay wizard, blocking worksheet, night audit processor, auto transfer, customize the online help section etc. The Lodging Touch Property Management System integrates different data from different sources.

The sources includes online room reservation, PayPal payment, room reservation details, financial accounts, Point-of-Sales from different departments like restaurants, golf, bar etc. The way of the integrating system can be clearer by the flowing diagram: Customers Marketing Sales orders Sales reporting Sales Invoicing Accounts Receivable Nominal ledger HR Payroll HR Employees HR Benefits Accounts Payable Suppliers Purchase orders Commitments register Inventory management 1st /2nd & 3rd Tier Suppliers ?Figure 7: System integration The Lodging Touch Property Management System contributes invaluably in certain fields.

Strategic support: The Lodging Touch Property Management System helps to take effective decision making. When computers can not produce business strategies by itself the MIS system supports management in understanding the result of their strategies. (BPC 2011) ? 8 What to-do and what not-to-do support: By the help of The Lodging Touch Property Management System an executive, based upon cash-flow the Management, can plan to do or not to do certain things e. g. promotions, room rate movements. It can give financial statements and performance report to aid the scheduling, monitoring and execution of strategy.

Reservation forecast: MIS helps raising or lowering the room price due to occupancy rates- good or poor. Because of the previous years bookings the MIS assist the pick-ups (usual bookings within a definite period). This anticipation facilitates modify in strategy, amendment of prices or supplementary marketing campaigns in suitable time. ?9 Prediction and Budgeting: The Lodging Touch Property Management System can provide the expected revenue and cash flow report of the hotel. MIS also helps with budgeting and cash-flow planning – based upon payments to suppliers and receipts from guests/sales.

By studying different reports provided by MIS the decision makers can find out trends and patterns that is important for the hotel. This is very crucial for the any big hotel like Forest of Arden. Future decision making is mostly depend of the predicted revenue. Year on Year Comparison: By the MIS system yearly evaluation with regard to different years achievable. When the executives of the Forest of Arden think of compare the change of the total revenue of the hotel they can easily go through the MIS and discover the reality. Evaluation: Evaluation is very important for the hotel industry.

The corporate level executives can make an evolution with the help of data provided by MIS like data on possession based on accommodation, beds, days, month, season, years, guest types, ethnic group etc. Hypothetical scenarios: The Lodging Touch Property Management System MIS systems can also exercise these unrefined data to run replications – hypothetical situation that respond a range of ‘what if’ questions concerning amendment in strategy. For instance, MIS systems can present forecast about the consequence on sales that an change in cost would have on a manufactured goods.

These Decision Support Systems (DSS) facilitate more informed decision creation within an venture than would be achievable without MIS systems. How modern trends might effect the technology and supporting arguments: In the coming future hotel industries are dreaming of different new invention of technologies. Some of them are very likely possible and some of them are difficult to believe. Whatever it is, it will have a tremendous effect in the service and quality in the hospitality industry.

In the below some potential predictions are pointed out on the future technology of the hotel industry: Space Hotels: Space hotels are no more dreaming staff. It is getting true soon. Modern science proved that 0’gravity allows constructing about any form and size, in almost any track. A private space tourism company called Galactic Suite is taking preparation to construct a 3 bedroom hotel by employing pods connected jointly in orbit. The company hope to be start for business by 2012. Many hotel group are planning to build their hotel in the orbit. t will be possible to have a trip to orbit. But the trip will not be so cheap, it will be ? 2 million for a 3 day stay. This may have very slightly effect to the hospitality industry, because it is unaffordable for common people. On the other hand some rich brand hotel may take an opportunity (or risk) to invest on the high profitable and high risk enterprise. ?*10 ?Figure 11: Shimizu Corporation’s popular Space Hotel design Undersea Resorts and Floating resorts: In Dubai 250000 square feet underwater hotel is already made and some more hotels are opening in different countries.

Oceanic-Creations made a plan to build a floating hotel made of plastic spending $209M called Maya in Bulgaria. So many hotel are on the way to be build like this. Both floating or undersea hotel have good prospects in the future. As people like something different thing. The luxury and distinctiveness may effect tbe business of the local hotels. ?12 ? Figure 13: Undersea Hotel| ? Figure 14: Floating Hotel| Mobile Computing: Japan is planning to a wallet free future. In a science iction article NTT DoCoMo, Japan’s largest wireless company, declared that they are introducing such a cell phone which will work as a proof of identity and as a credit card. Anybody can check in or check out a hotel in a minute just by touching the phone and pay their bill. It will easily make the life easy both of guests and hotels. It can save operational cost for the hotel. ?15 ?Figure 16: Cell Phone Instead of Your Credit Card Kiosks: The use of Kiosks in the hotel industry is becoming very popular day by day. YOTEL Gatewick, like many other hotels in the world, started introducing the Kiosks.

In the coming future, it is expected that a significant number of hotels will start using the kiosks for their guest check in, room and event schedule, lobby way finding system and in-room banker channels. It provides proven efficiency and low cost. It may save both operational cost and time. ?Figure 17: KIOSKS iPads at Bar: Many hotel has started introducing ipad for their bar to act as a sommelier. Casa del Mar in Santa Monica, USA, for example is one of them who already using this technology for their bar. The iPad is to act as sommelier. It may improve the quality of the service of the bar and can help preparing cocktail. Figure 18: iPad act as sommelier. Biometrics: It a protection technology that recognize persons by retina scans, fingerprints or voice prints, is by now in use at government and private industry installations. The lock of hotel room’s may be activated by a retina scan. If the guests of future hotels forget their room keys, check in will not be a problem. The biometrics can save time & money and improve security system. Conclusion: So it is very obvious the modern technology has a good influence in the hospitality industry. It can be both good and bad.

Good in a sense that it will open some new ways to make money or saving money as well. It may improve the guest service. On the other hand bad in the sense that hotel’s operational cost may increase to compete some well technologically developed competitors. The technology may also lead risk to the business in a sense that it may not be able to protect fraud or the competitive advantage will be easily copied by the comparators. References: ?1. Porter, M. , 1998. Competitive Advantage: Creating and Sustaining Superior Performance: With a New Introduction, Free Press. New York, 1985 ?

Figure*2: Kooky Plan 2011, Value Chain, digital image, accessed 20 February 2011, <http://kookyplan. pbworks. com/w/page/13595252/Value-Chain>. (Accessed at 15 Feb 2011) ? Figure3, 4, 5, 7: David Preston 2011, Computer Systems, System types & usage: the future for Systems in Hospitality, digital image, Revision ppt. ?6. E-Hospitality. com 2011, Lodging Touch Property Management System, Available at: <http:// www. e-hospitality. com/product. mvc/LodgingTouch-Property-Management-System-0001>, (Accessed: 21 February 2011) ? 8 Best Price Computers, 2011, What are Management Information Systems?

Available at http://www. bestpricecomputers. co. uk/glossary/management-information-system. htm, (Accessed: 17 Feb 2011) ? 9. ASSD 2011, Management Information System, Available at http://www. assd. com/hotel-mis. en. htm (Accessed 19 Feb 2011) ? 10. The Telegraph, 12 Aug 2007) Space hotel to offer guests 18 sunrises a day, Available at: http://www. telegraph. co. uk/science/science-news/3303113/Space-hotel-to-offer-guests-18-sunrises-a-day. html. (Accessed at 26 Feb 2011) ? Figure11: Space Future, 22 Jan 2011, Space Hotels, Available at http://www. spacefuture. com/tourism/hotels. shtml, (Accssed at 20 Feb 2011). ?12: About. om, 23 June 2010, Top 10 Hotel Technology of the Future Available at: http://hotels. about. com/lr/hotel_technology/18135/1/ (Accessed at 15 Feb 2011) ? Figure 13: Hotel Chatter, 7 January 2010, Still Not Happening: Istanbul’s Fantastical Underwater Hotel, Available at: http://www. hotelchatter. com/tag/Underwater%20Hotels (Accessed at 23 Feb 2011). ?Figure 14 Notcot. org, 2011, For even more random NOTCOTness, follow on Twitter!!! , Available at http://www. notcot. org/post/3594/ (Accessed at 22 Feb 2011). ?15: Fitzgerald, M. , 1 May 2010, About. com, Use Your Cell Phone Instead of Your Credit Card, Available at:

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