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Is the Hospitality
Industry Ready

for ERP?

This article is from the Fall 2010 issue of Hospitality Upgrade magazine.To view more articles covering technology for the hospitality industry please visit the Hospitality Upgrade Web site or to request a free publication please call (678) 802-5307 or e-mail.
By Terry Price, CIO, Grove Park Inn   - January 2011

For those like me, too cool to ask, ERP stands for enterprise resource planning.  So, maybe the question should be, is hospitality ready to operate as a single enterprise? 

For decades the hospitality industry has been trying to solve the problem of running several completely different business units under one roof.  Each business unit has its own unique needs but we want them to all play nicely together.  The most recent plan of attack for this problem is to seek the best-of-breed software solutions for each business unit.  The best of breed approach involves a search using separate RFPs outlining the specific needs of each business unit.  Selections would be based on the solution that is the best fit for that area.  The RFP would include a section concerning the ability to interface with the other systems.  It is usually not a decision factor.  The interfacing needs are, in most cases, developed within the scope of the project.  Technology has made great advances in the last several years and with the efforts of a group to standardize the interface protocols.  The result is more information than ever before flows freely between the systems.  Ok, it is not exactly free.  There are still substantial costs to maintaining that free flow of information. 

At this year’s HITEC show, there were many companies talking about their integrated solutions. I am curious when the definition of integrated changed. Integrated, as I understand it, means all the business units use the same data within the same database; one version of the information in one location.  Interfaced, on the other hand, means the passing of information between two separate systems; multiple versions of the information in multiple locations.  No matter how much information gets passed back and forth, it is still an interface. Changing the verbiage in the marketing material does not change the reality.

Are interfaces a bad thing now?  We all accept their existence.  Why do you not hear a software company bragging about how good its interface is? Could it mean that we are looking for more? The quest is the Holy Grail system that cures all our problems. One system that gives all the functionality we need and never breaks. I would like to play more golf. I can dream, right.

Having one truly integrated system would be ideal, but are we willing to make the necessary changes in our operations to make it work. Using a best-of-breed solution provides a great sense of comfort in our operations. These solutions are designed specifically to provide all the features and functionality needed, or wanted, for that particular business unit. The software providers focus on providing what the users want without worrying about the interaction with other systems. The main focus is to provide the best solution possible for golf, spa or sales and catering. The results are very feature-rich systems that require a very complex interface to communicate with  other systems. It is good for the business unit, but is it good for the enterprise?

The old wives tale about using a fully integrated system is you have to give up functionality. That perception has steered us away from such systems. It is not about giving up functionality, it is about giving up control. In a fully integrated system, control is in the hands of the enterprise.  Decisions on how to manage guest information, communicate with the guest, configure rates and  setup treatments have to be considered by the entire operation. Every area has an effect on the other areas of the system.  No longer is that meeting planner just a contact within your sales and catering system.  She is a meeting planner, a resort guest, a spa customer, a dining patron and a golfer. The entire operation needs to agree on how that person will be entered and managed in the system. We keep asking for the 360-view of the customer, but you can get pretty dizzy making 360-degree circles if you are not careful.

In the perspective of the IT professional, having everything in one system would be nirvana.  No more multiple vendor relationships. We can reduce the amount of hardware to support the different applications.  Heaven forbid a vendor ever allows us to put more than one software solution on the same server.  We would see immediate benefits in our budget with the reduction in support fees. 

ERP solutions such as SAP and Microsoft Dynamics have been providing a platform for enterprise solutions for years. Other industries have made the adoption, so why not hospitality?  It is time for us to seek solutions that will help us run our companies as a whole. Management needs to make informed decisions for the entire company.  The last couple years have been a wakeup call for the need to change to survive.  A business unit may want to work and operate independently, but if the company goes under, they all fall together.  Vendors are beginning to provide solutions using ERP technologies. Maybe they are worth a look.

Change is the key. We cannot make an enterprise solution operate like the disparate systems that we currently have.  The tool is different; therefore we must use it differently.  The process of driving a nail is different using a nail gun vs. a hammer.  We must change the way we operate to use the information an ERP solution can provide.  Are we willing to change?


Terry Price is the CIO of the Grove Park Inn in Asheville, North Carolina.







For related articles on this topic please see:

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Contact:

Geneva Rinehart 
Managing Editor 
Hospitality Upgrade Magazine 
and the Hospitality Upgrade.com website
www.hospitalityupgrade.com/
grinehart@hospitalityupgrade.com

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Also See: Hospitality Upgrade Releases Summer 2010 Digital Edition / June 2010

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Hospitality Upgrade Magazine Expects Record Attendance Numbers at Highly Anticipated Ninth Annual CIO Summit; The CIO Summit will be held September 8-10, 2010 at the Omni San Francisco Hotel in San Francisco, California / May 2010

Hospitality Upgrade Launches Redesigned Web Site / April 2010

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Hospitality Upgrade Magazine Surveyed Hospitality Industry's Top Technology Leaders at Annual CIO Summit With Intriguing Results / October 2009

Hospitality Upgrade Magazine Reports Record-Breaking Attendance for Annual Meeting of Hospitality Industry's Top Technology Leaders; The eighth annual CIO Summit will be held September 9-11, 2009 at the Royal Sonesta Hotel in Cambridge, Massachusetts / August 2009

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