Adoption of Optima Property Management System for the Hotel - Case Study Example

Name Professor Course Date Abstract The hospitality industry was found to be fast growing (Baumann, pg 12). This necessitated the need for innovative ways to accommodate the growth. E commerce was established to be a key aspect for helping in this growth. A new hotel faces a myriad challenges in this competitive field. To leverage it to the status of established players, E commerce plays a big role (Baumann, pg 30). This was in issues of marketing and planning. These were found to promote the new business a lot. To realize effective use of E commerce for upcoming businesses, an appropriate system must be applied. In view of that, appropriate systems were looked into. These included Optima and Guest 360. Both were analyzed for their effectiveness to the industry. Various aspects were taken into consideration. One aspect was efficiency. The report also focused on user friendliness of the software. Marketing as well as impacts of competition were also considered. Emphasis was also laid on management planning. The report also looked at the impact of the system on security. Cost implications were also considered. In addition, other factors such as changes to information were looked at. After careful analysis, the report concludes that optima is better suited for the hotel than Guest 360. This was due to its ability over Guest 360 in various fronts. In view of this, the report recommends adoption of Optima property management system for this hotel. Introduction Hospitality industry is one of the fastest growing industries. This growth comes with various challenges. These challenges if not tackled will lead to lack of a competitive advantage over rivals (Baumann, pg 22). To curb this, many players are relying on e commerce as the solution. This has been found to yield considerable success. The world is growing rapidly in terms of communication. People are turning to the internet in almost each area of their lives. Businesses have been in the forefront in this change. Sales and marketing are increasingly being carried out online. The hospitality industry has been greatly affected. Competition has increased tremendously due to online marketing (Dev, pg 12). Success in hospitality requires investments in technology. However, it is not simply technology. It should be competitive technology. Property management systems are essential tools in the industry (Dev, pg 12). They are designed to improve efficiency in all the aspects of the industry. They aim at improving sales through effective online marketing. They also help cut costs thus improved profitability. They help in improving security for the clients. Lastly, they help in various aspects of management. These include bookings as well as housekeeping. Background Information Various property management systems exist. Each has its own advantage over the other. Their suitability varies as well. Different industries require different systems. These depend on the task performed by the software. The hospitality industry has its own unique systems. Their main capabilities include marketing, bookings, and housekeeping among others. Many systems for this industry were considered. They were analyzed according to their capabilities. They were examined for suitability to the hotel. The research narrowed down to two popular systems. The two systems considered were Optima and Guest 360. Their functionality was analyzed carefully. Each was found to be widely used. They were also recognized as quite successful. Authorization The research was authorized by the managing director of the hotel. This was done on behalf of the board of directors. We were given the mandate to come up with a suitable system for use by the hotel. Aim of the report The aim of the report was to research for a property management system. Various systems were to be looked at. Their suitability and effectiveness to the hotel were to be considered. The report was to narrow down to two to three systems. Each system was to be analyzed carefully. Comparisons were to be made to come up with the best suited option for the hotel. Conclusions and recommendations were proposed. Scope The scope of the report included various aspects of the systems. These were effectiveness of the system as well as its ramifications. It’s impact on security of the hotel. Impacts of the system to efficiency of the business were also considered. Potential impact of competition on the system was also considered. It also focused on the changes the system will have on marketing of the hotel. It also focused on the evidence of user friendliness and the capability of software expansion. It also involved comparison of the systems on all the above fronts. A suitable software for the hotel was to be determined. Body After careful examination, the report narrowed down to two systems. These systems were Optima and Guest 360. This was occasioned by their considerable capabilities over the others. The two were analyzed as follows. Optima It is one of the widely used systems in the hospitality industry. It is simple to use and provides hoteliers with a good management platform (Baumann, pg 12). It is based on the latest technology. It is good front office software. It helps in online viewing of information. Printing of the information is easy with this system as well. This enables presentation in various forms. These include graphs as well as tables. All computerized hospitality applications are incorporated in it. It has the capability of capturing a wide range of data. Its various modules enable this. Each module is designed to address each hotel application. These modules cover such applications as bookings, accounting among others. It comes with management control systems. These ensure precise management of the hotel. It has powerful analysis capabilities. These make it an excellent planning tool. Easy access of data online makes it a suitable marketing tool. Translation to various languages with ease enhance it suitability to worldwide marketing. It is an all round PMS. Effectiveness and ramifications on the industry This system was found to be very effective for the industry. This is mainly because of its all round nature. It has modules covering each aspect of the industry. It effectively cuts down on accounting costs. This is achieved through the accounting module. It is able to accept cash in almost all currencies. These are then converted through the accounting software (Connolly, pg 19). With this, the hotel reduces on the number of accounting staff. Through online bookings, efficiency in bookings is boosted. This helps serve a large client base. This increases on the sales of the hotel. It also reduces the cost incurred by guests when making bookings. This cuts on the overall costs on the part of the guests. This leads to increased sales as well. Through its online bookings, many guests are able to view the product. This improves on the marketing of the hotel. Through this, many guests get to know about the hotel. This improves on sales as well as the brand name. This leads to more visitations to the hotel. This increases the profitability of the hotel. This is achieved since it is able to reach clients from all over the world. The housekeeping module is effective in asset management. The module enables inventory of hotel assets (Baumann, pg 47). This reduces the losses incurred through asset losses. The management is able to keep track of all the assets. This improves efficiency in housekeeping. It has a report generator capability. This enables the management to generate reports of departments easily. This makes it easy to compare performances between years. This helps in planning for the hotel. It thus effectively promotes planning for the hotel. Potential impact on security As with many online transactions, the system is liable to the threat of online malice. Hackers have been known to come up with smart ways of breaching even the tightest online security protocols (Connolly, pg 19). However, the system has an advanced security system to guard against this. It is capable of easily rejecting clients who are suspected of security concern. This was found to help in avoiding security infringements. It has a good capability of keeping customer history (Baumann, pg 33). It has the capability of identifying people by their photos. It can also be linked to other security databases to access information. It enhances security quite well. Impact on business efficiency This is the key advantage of this system. It emphasizes fast access to management data. Its layout allows for the easy access of data by managers. Its module layout was enhances this. The management is able to effectively manage accounts through this system online. It involves customer billings and calculation of rates. Room allocations are also performed online. This increases efficiency as compared to manual allocations. It assists in yearly data comparisons (Connolly, pg 17). This was found to help in planning for the business. It integrates all management aspects thus makes it easy to detect shortcomings in the business. It also improves efficiency in curbing management costs. Through its online marketing ability, the system reaches a large client base. This increases the marketing efficiency. This led to its suitability more so on upcoming businesses in need of rigorous marketing (Baumann, pg 12). It was found to achieve this at a relatively low cost. This PMS system is considerably efficient for the hospitality industry. Explanation of risks involved in E commerce E commerce is a risky venture. The system chosen should address this fact. Optima was found to explain this. This was recognized by the existence of folio control. This exclusively serves the management of the hotel. This helps much in information guarding (Connolly, pg 17). It helps in protecting ills such as unauthorized access to vital data. However, it does not fully cover all the risks of E commerce. Potential impact of competitive forces This system highly improves competitiveness. Its marketing ability helps the system compete with other hotels. Ability to function in different languages enables wide access around the globe. The hotel is therefore able to market itself in different parts. Data sharing capabilities between hotels opens up to virgin markets (Brymer, pg7). However, this capability if not well exercised, may lead to leak of vital information. This plays in favor of the competitors. The software increases immensely the competitive advantage of businesses using it properly. Changes in the hotel marketing The system puts businesses on the forefront in marketing. Its wide market reach enables this (Connolly, pg 11). Due to the easy access to information, it helps customers to cut on costs involved in bookings. This puts the business a step ahead in marketing. The user-friendly nature of the system was recognized to be very effective for marketing (Brymer, pg7). Clients have easy access to information through this system. It also was found to change the way marketing was done. It moved from manual to online marketing. This helps improve sales since most people are turning to E commerce (Dev, pg 12). It also reduces the cost incurred through intermediaries. The cost involved in manual marketing was also greatly reduced. The system offers an ideal marketing platform. User friendliness The system is user friendly in almost all aspects. It enables easy information access. This makes it easy for clients to make bookings. It has easy usability by workers. The customized modules (Brymer, pg15) enable this. Each activity has its own module. This makes it easy for the workers to work with it. The modules are well integrated. This greatly eases management. The management accesses the data from all departments. This has made the system powerful for management of hotels. However, vital data management, the system is complex. This is for security purposes. This requires well-trained personnel to work with. Change to information requirements The system is windows based. However, it is compatible with various programs. It works well with all windows tools. It is a great tool when it comes to information changes. Due to its support for various programs, information can be changed to meet new requirements. This helps managements transform data to suit their specific needs. This is key aspect when dealing with clients from different countries. The management may be required to change information to suit certain markets. It has flexibility in information handling. Management planning The system has several data analysis capabilities. Data comparison between years is easily achievable. The different modules enable the system to help in data analysis. The system has different data interpretation capabilities. These include charts as well as graphs (Brymer, pg7). These help in data comparison. This greatly helps the management in planning. Analysis by the system made it easy for the management top plan. It helps much in planning. Purchase cost The software is costly. This is because of the wide range of capabilities. It is difficult for many upcoming hotels with small capital to acquire and maintain this software. Prices vary with distributor involved. The average price is $ 190 (Dev, pg 12). It is on a monthly basis. However, its ability was found to be worth the investment based on its wide range of functions and capabilities. Expansion capability Due to its integration capability, it is easily expandable. It requires transformation through the available tools to expand. Additional modules can also be added. These are added as needs arise. Additional options thus can be installed as per requirements. It can be connected to credit card centers. It can also be connected to multi stations worldwide. Magnetic card readers can also be installed. It has the ability to export information to other tools (Brymer, pg7). This makes it readily expandable. Guest 360 This is a next generation tool. Aglysis Company produces it. Its key component is innovativeness. It goes beyond just bookings. It has strong marketing tools. It utilizes advanced technology. It uses SOA technology. It caters for hotels of all sizes. It allows for good integration with other softwares. It captures each aspect of the industry. It has a good guest inventory. It keeps information of tourists. It is able to detect tourist preferences. It is designed to help in accounting. It also helps in housekeeping. It also has advanced functions. These include, guest hub and front office among others. This combined with its security capability make it a strong system for use in the industry (Connolly, pg 22). It is said to offer guests a three sixty degree experience. It derives its name from this. Effectiveness and ramifications on industry It is very effective. Its advanced technology offers a new dimension in marketing. It helps market the hotel globally. Clients are able to find the hotels product globally. It comes in different languages. This helps marketing in several areas. This improves sales and increases profitability. It has good guest screening effectiveness. This helps in securing of the hotel. Guests with ulterior motives are easily avoided (Connolly, pg 17). Through its screening ability, the hotel is able to reduce in the security cost. This is because security workers are reduced since the system performs some of the functions that could have been done by them. It improves on asset management greatly. This is enabled by the flexible inventory system that comes with it. It reduces losses on assets. The inventory records all the assets of the hotel. Any loss is easily detected. This allows for quick action to be taken. This thus greatly helps in guarding against losses (Brymer, pg7). Potential impact on security It presents great security capabilities. Its guest screening ability is great for enhancing security. This is vital for hotels serving clientele from various destinations. This is necessitated by the increased cases of terrorism. Business efficiency It enhances efficiency of hotels much. This is through online bookings. Online screening also reduces cost on security. Marketing is also made easier. However, the software improves efficiency based on the innovativeness of the user (Brymer, pg13). Risk involved in E commerce This system greatly reduces the risks of E commerce. This is through its innovative capabilities. However, it does not directly address the risks (Connolly, pg 17). It requires innovative management to identify risks using this system. Novice managers were found to have a hard time with the software in determining risk. Competitive forces Like many online systems, it highly emphasizes on marketing. This adds on to the competitiveness of the company. Its innovative nature is highly suited for marketing. This gives the system a competitive edge in marketing. However, lack of knowledge on its effective use may not achieve good market coverage (Brymer, pg 21). Change in marketing The marketing will improve. Its innovativeness permits production of attractive products. It creates appeal to even some of the unlikeliest clients (Connolly, pg 9). It was found to divert marketing from manual to online. With this, sales grew and costs reduced. It was has great marketing abilities. User friendliness This system is highly user-unfriendly. It relies mainly on the innovativeness of the user. Its functions are not explicit (Brymer, pg7). A good understanding of the software is needed to reap the benefits. Change to information This is one of the key benefits for this system. It uses advanced technology. This enables manipulation of information to suit requirements. Management planning The system does not offer good planning platform. It was developed mainly as a marketing tool (Connolly, pg 17). This does not offer the management a proper insight into the business direction. Software cost The software is not very expensive. It is a viable option for upcoming hotels. However, it incurs high cost in personnel training. It costs $ 49 and is renewable on a quarterly basis (Baumann, pg 22). This makes it cheap especially for upcoming hotels keen on e commerce. To use the software effectively, a good understanding of it is needed. This calls for training of personnel. This increases the overall cost of the software. Expansion capability It is one of the most expandable. This is attributed to the advanced technology. This makes it easy to develop it further when needed. The SOA enables easy expansion. It makes integration with other programs easy. This helps each hotel configure it to it requirements. New functions can be easily added due to the capability of the SOA (Brymer, pg9). Comparison between Optima and Guest 360 Both systems were found to be very effective in the hospitality industry. They have a great marketing ability (Brymer, pg14). However, it was realized Guest 360 is a better marketing tool but only if used by innovative managers. However, for general marketing, Optima offer the best option. Both are effective in security management. However, Guest 360 offers comprehensive security coverage than Optima. Optima promote business efficiency than Guest 360. This was attributed to its well laid out modules (Connolly, pg 11). It is also less complex. This makes it more efficient as compared to Guest 360. Optima was also found to be more user friendly as compared to Guest 360. It has a simple layout. Guest 360 utilizes complex technology, which requires expertise to use (Connolly, pg 17). Almost every person can effectively use Optima. Both are easily expandable. Optima’s capability was due to its compatibility with various technologies. Guest 360 owes its expandability to its advanced technology. Guest 360 is cheaper than Optima. However, its cost is increased by the need for training of personnel. This makes optima the better option despite the cost. Optima gives the management a good in planning option. However, this is not the case with Guest 360. It lacks in planning abilities (Brymer, pg9). This meant it could not provide direction of the business. Planning is key in the hospitality industry. Guest 360 was thus not suitable for upcoming hotels in view of this. Conclusion and recommendations The hospitality industry is a competitive one (Brymer, pg7). Marketing and planning are key for the industry. E commerce plays a vital role in the sector. It greatly enhances marketing. It helps in planning as well. It serves to improve business effectiveness (Connolly, pg 17). It also helped in improving security and cutting on operational costs. Not all systems were found to be that effective. In view of that, two systems were chosen for comparison. These included Optima and Guest 360. After a careful analysis of various aspects, the report recommended adoption of Optima for use by the Hotel. It was found to have various strengths as compared to Guest 360. Appendix PMS Property Management System SOA Surface Oriented Architecture Work cited Baumann, M A. “Internet a powerful sales tool for vacation ownership.” Hotel and Motel Management, New York: Duluth, 2000. Brymer, R. A., & Forrest, E. J., “Hotel Management and Marketing on the Internet.” Cornell Hotel and Restaurant Administration Quarterly, New York: Ithaca, 1996. Connolly, D.J., and Olsen, M.D., “Experience-based travel.” Cornell Hotel and Restaurant Administration Quarterly, New York: Ithaca, 2000. Dev, Chekitan S. and Olsen, M. D., “Marketing challenges for the next decade.” Cornell Hotel and Restaurant Administration Quarterly, New York: Ithaca 2000. Read More