IT Impact on Business - Hilton Worldwide - Case Study Example

IT Impact on Business Name Professor Institution Course Date IT Impact on Business Executive Summary In this digital and information age, Information technology has greatly improved on how tourism industry players do business. IT has been touted to reduce cost of operation, and to improve operational efficiency, customer experience and service quality in tourism sector. In this report, this paper will describe and analyze the impact of IT on that business. In particular, the report will discuss whether the business needs IT, how business use IT, what is required to apply IT into business, the benefits and advantages IT bring to business, types of risk IT bring to business and how business maintain and monitor IT. The report will focus on Hilton Worldwide and how its adoption of IT has impacted its business. Table of Contents IT Impact on Business 2 Executive Summary 2 Table of Contents 3 1.0 Introduction 4 2.0 Overview of Hilton Worldwide 4 3.0 Why business needs IT 5 4.0 Why IT is important for business survival 6 5.0 What is required to apply IT into business? 7 6.0 How does business use IT? 7 7.0 What benefits and advantages does IT bring to business? 8 8.0 What type of risk does IT bring to business? 9 9.0 How business can maintain and monitor IT 9 10.0 Conclusion 10 11.0 References 11 12.0 Appendices 13 1.0 Introduction As the era of information unfolds, technology developers and enthusiasts have come with various platforms such websites, cloud, social networking sites, analytics and mobile technology which Hilton Hotel & Resorts have capitalize to gain competitive advantage, reduce cost of operation and improve customer service delivery (Chathoth 2007, p.395). Yao and Jong (2010, pp.4059) stated that despite of the benefits, consumer security and privacy have been put to risk more so where personal details are required. Therefore, this report will analyze the impact of IT on that business. To put this analysis into context, the report will the report will discuss whether the business like Hilton Worldwide needs IT, how business use IT, what is required to apply IT into business, the benefits and advantages IT bring to business, types of risk IT bring to business and how business maintain and monitor IT. 2.0 Overview of Hilton Worldwide Hilton Hotels & Resorts a multinational hospitality corporation which operates group of hotels and resorts chains across the globe. Hilton Hotel & Resorts (2016) claimed the hospitality corporation in 1919 in Texas and has headquarters in Beverly Hills in California. Hilton Hotels & Resorts has grown over the years and now have more 540 hotels worldwide (Hilton Hotel & Resorts 2016). The company operates in a very competitive industry where top players such as intercontinental, Four Seasons and The Palazzo, First World Hotel and The Venetian scramble market share. The market wisdom then holds that Hilton had to embrace technology to compete with these market players. 3.0 Why business needs IT In this current competitive environment, businesses needs information technology for several reasons including supplies management, general operation, marketing and accounting. In the past, companies use to conduct supply chain management manually between themselves and the supplies (Odoom 2012). Due to change like technological advancement and intensification of competition in the world markets, companies and in this case Hilton had to integrate technology within their supply chain management to improve lead time and inventory management. Odoom (2012) claimed have been tools like Supply chain management 2.0 which combines process of supply chain and internet have been used by tourism companies to management their supply. In particular, software like Enterprise resource planning has been used in inventory management by Hilton Hotel & resorts. Rao (2000, p.36) ERP systems normally track resources such as the raw materials, cash, production capacity and business commitment status. In this context, business commitment status means the payroll and purchase orders. Business also needs IT in conducting marketing activities. The department of market within Hilton Hotel usually uses IT for creating adverts television, online, radio, billboards, newspapers and magazine audiences (Hilton Hotel & Resorts 2016). The world has changed and it takes effort to create perception and attract customers. Jones, Hillier and Comfort (2014, p.6) claimed that the company has realized the need for information technology platforms and develops unique ads that creates competitive advantage. For such reason, Hilton current employs graphic designer who use technology to design ads for marketing purposes as shown in appendix 1. IT is needed to allocate funds for purchasing, marketing and human resources management activities. In addition Chebrolu and Ness (2013, p.3) contended that business needs IT for general management like information process and storage, distribution, hiring, room reservation and communication. 4.0 Why IT is important for business survival Change is increasingly happening in the business environment as more companies expand into foreign markets. Despite the expansion communication between the head office and management of employees are highly essential for sustaining change. Huang (2009, p.7) opined that IT plays a key part in the communication between head office and foreign outlets. Information technology can therefore be used to control these outlets to ensure their survival. Law and Jogaratnam (2005, p.174) argued that Information technology makes it easy for a business like Hilton Hotel & Resorts to conduct market research for valuable information before taking a certain investment. Good market research increases the chances of business survival. Currently marketing is one the activities which ensure the survival of the company. A company which has been outdone on marketing normally finds it hard to compete and can even remain anonymous. Zhou (2004, p.35) stated that business can now use technology to improve the marketing activities and improve brand images and help the business survive the competition. Hilton Hotel has highly benefited from technology in terms of marketing to survive the competition. Jones, Hillier and Comfort (2014, p.10) contended that technology can be a source business secret where the company derives their unique formula or processes hence creating a competitive advantage. 5.0 What is required to apply IT into business? Integrating IT into a business is very expensive. It means a business which wants to incorporate information technology must set a high budget to get the best IT infrastructure and tools (Chebrolu & Ness 2013, p.8). In a nutshell, financial resource is required to pay IT firms to integrate technology systems. A company like Hilton has a budget for IT; for paying monthly or yearly bills like web hosting, internet and ERP bills among others. In addition, Hilton Hotel & Resorts (2016) claimed that the management also set budgets or costs for upgrading it technology infrastructure and systems. Planning is also required to integrate IT into business. The management of a company must understand that business environment is quickly changing hence must have a time framework upon which they want to apply IT into their business. Planning also helps the company seeks funds, get the best vendor m and get the best advice of when to apply IT. Furthermore, planning is used a process of identifying the right equipment for a particular use (Buhalis 2003, p. 57). 6.0 How does business use IT? Tourism businesses use IT in several areas of management including office operations, marketing, accounting, booking and security purposes. Hospitality and tourism market player uses IT to run the office in processing and disseminating. Equipment like computers, printer, and telephones are essential for official communication between individual staffs and between staffs and customers (Sikora & Langdon 2006, p. 1618). Email, Skype, team viewer and office domains have created a platform for staff communications between themselves and with the customers. IT is also used for business coordination. Department installed with IT systems do not need to send individuals with information to take to another department because it can be done through intranets in softcopy format (Ahmed et al. 2011, p. 1102). IT is also used to store very important information for the business including busy secrets. Databases, cloud and other storage devices like hard disk and flash disks provide this opportunity for Hilton or any tourism industry players to store information. Law and Jogaratnam (2005) asserted that reservation systems are used to make reports about room availability and cancellations. 7.0 What benefits and advantages does IT bring to business? Information technology has brought massive benefits and advantages to business including attraction of customers, online booking or shopping, loyalty management, and operational efficiency and cost reduction (Xiaoqiu, Buhalis & Song 2003, p.455). The company that has connected its product and service with technology such now gets more customers unlike companies which are rooted to traditional management. Elena and Andrea (2013, p. 89) claimed that many people now spend their time online hence are likely to come across products or services offered by Hilton Hotel & Resorts in their website or social media pages. The advantage of this is that the customer does not need to go to their physical hotel or company to ask a question what the company offers, but provides the opportunity for customers to book for vacations, business conferences, camping and picnics from wherever they are (Hilton Hotel & Resorts, 2015). Hilton Hotel & Resorts has integrated central reservation systems which makes sure there is no double booking of one room. A research conducted by Zhou (2004, p.73) claimed that companies benefits from technology in that they use them to manage customer loyalty. The loyalty program of the company is linked with its websites and customers can subscribe through their emails to get newsletters either weekly or monthly about the service and products as shown in Appendix 2 (Hilton Hotel & Resorts 2016). Companies also benefits from reduced cost of operations. 8.0 What type of risk does IT bring to business? IT has two main risks to business including concern for business information and privacy and security of customer personal information. There is an increase of internet fraudsters who are developing software where phish information or business secrets (Tsai et al. 2011, p.256). Yao and Jong (2010, p. 4061) affirmed that the fraudsters often target business’ vital information from their database to sell to their rival or can use to get ransom from the company. When a company loses its important secrets, it becomes exposed to competition. On the other hand, information technology also exposes customer personal information to risks such as theft and fraud (Yao and Jong 2010, p. 4062). When booking a room at Hilton Hotel through online platform, customers are normally required to provide personal information such as names, credit cards pin and phone number. Research shows that hackers target such information to steal customers’ money from ATM or banks (Tsai et al, 2011, p.259). 9.0 How business can maintain and monitor IT Maintaining and monitoring IT is the determiner of success for a business. Even though, managing IT needs funds, it’s worth it because of long term benefits. Huang (2009, p.65) stated that business can therefore maintain and monitor IT by first allocating funds for maintenance and upgrade. This is what Hilton does every year by allocating funds for internet, websites hosting and buying new equipment. Equipment can be computers, laptops, tablets, servers, software and antivirus (Hilton Hotel & Resorts 2016). Another way the company can maintain IT is by setting up ICT department and equips it with the required IT infrastructure, architecture, and tools required for every functions such as marketing, purchasing, accounting and general management. Chebrolu and Ness (2013, p.9) argued that another way is by hiring qualified and techno-savvy individuals, including IT manager, systems administrator, graphic designer and network officer among others to run the office and IT systems. The staff in this office ought to be allocated task of training staffs from other departments on how to use IT devices. Hilton Hotel IT department conduct IT training annually to other members of the organization to sustain change which takes place in IT and tourism industry. 10.0 Conclusion In conclusion, the report has discovered that Information Technology has revolutionized business particularly in the tourism sector. IT advancement and application has improved how communication, marketing, purchasing, sales and office operations. Hilton Hotel & Resorts which adopted sophisticated and advanced technology has benefitted in terms of increase customer attracting and room reservation, brand image, operational efficiency, enhanced inventory management, customer experience and service quality in tourism sector. Despite the benefits, adoption of IT among Tourism sector players pose a serious personal information security risks on customers especially when booking hotel rooms online. For this reason, IT manager within these businesses must focus on network security technologies like virtual private networks, firewalls, virus prevention techniques to reduce such fear. 11.0 References Ahmed, I, Qadri, A.S, Shahzad, R.K and Khilji, B.A 2011, Information Technology-Its Impact on Global Management, World Applied Sciences Journal, Vol.12 m No.7, pp. 1100-1106. Buhalis, D. 2003, eTourism: information technology for strategic tourism management, Pearson, Essex. Chathoth, P. K 2007, The Impact of Information Technology on Hotel Operations, Service Management and Transaction Costs: A Conceptual Framework for Full-Service Hotel Firms, International Journal of Hospitality Management, Vol.26, No.2, pp.395-408. Chebrolu, S.B & Ness, L 2013, How Does Alignment of Business and IT Strategies Impact Aspects of IT Effectiveness? International Journal of Applied Management and Technology, Vol.12, No.1, pp. 1–15. Elena, A.M & Andrea, O 2013, ICT impact on tourism industry, International Journal of Management Cases, Vol.3, No.6, pp.87-94. Hilton Hotel & Resorts 2016, Hilton Hotel & Resorts Official Website, Viewed 8th February 2016 from http http://www3.hilton.com/en/index.html Huang, L 2009, The contingent role of innovation between IT management sophistication and strategic alignment, Journal of Global Information Management, Vol.17, pp.60–92. Jones, P, Hillier, D & Comfort, D 2014, Sustainability in the global hotel industry, International Journal of Contemporary Hospitality Management, Vol. 26, No.1, pp. 5-17. Law, R & Jogaratnam, G 2005, A study of hotel information technology applications, International Contemporary Hospitality Management, Vol.17, No.2, pp.170-180. Odoom, C.K 2012, Logistics and Supply Chain Management in the Hotel Industry: Impact on Hotel Performance in Service Delivery, University of Nevada. Rao, S.S 2000, Enterprise resource planning: business needs and technologies, Industrial Management & Data Systems, Vol.100, No.2. pp. 35–38. Sikora, R.T & Langdon, C.S 2006, Agent-based information systems and solutions in business: an introduction to the special issue, Information Systems and E-Business Management, vol. 4, No.1, pp.1617-9846. Tsai, J, Egelman, S, Cranor, L & Acquisti, A 2011, The Effect of Online Privacy Information on Purchasing Behavior: An Experimental Study, Information Systems Research, Vol.22, pp.254–268. Xiaoqiu Ma, J, Buhalis, D & Song, H 2003, ICTs and Internet adoption in China’s tourism industry, International Journal of Information Management, Vol.23, No.6, pp.451-467. Yao C.T & Jong, CY 2010, Perceived risk of information security and privacy in online         shopping: A study of environmentally sustainable products,  African Journal of Business        Management, vol.4, pp.4057-4066. Zhou, Z 2004, E-commerce and information technology in hospitality and tourism, Delmar, London. 12.0 Appendices Appendix 1: a picture of services offered by Hilton hotel Source: (Hilton Hotel & Resorts 2016) Appendix 2: Hilton Newsletter subscription platform Read More