Implementation of Information Systems at Delica Hotels - Case Study Example

Implementation of Information Systems at Delica Hotels Name Course Name and Code Instructor’s Name Date Abstract Delica Hotels (hypothetical) are a group of five hotels in Sydney Australia. The main problems faced by Delica Hotels include manual booking procedure which results in time wasting and overbooking, lack of IT and information system, problems in financial control and operating under capacity and the decentralized management system for its five hotels. The firm can only overcome the problems if it employs an appropriate business strategy. The suitable business strategy for Delica Hotels is to be customer focused. The best information system that can support the above business strategy that is customer focused is the customer relationship management (CRM) system. CRM will solve overbooking problems, and allow centralized management of the firm’s finances and operational activities. Delica Hotels (hypothetical) are a group of five hotels in Sydney Australia. They have a mainly weeknight business clientele with an increasing level of conference business. All the hotels use standalone personal computers (PCs) for billing but each has different systems due to the history of incorporation into the group. Reservations are all handled manually in each hotel and there is no central reservation system for the group (Gregory, Papadopoulod, and Wita, 2009). Hotel general managers report to a group managing director (MD) and provide their reports by manually extracting data from the various systems and creating management reports using a word processing application (Olegas, 2005). The group MD has, therefore, a limited knowledge of the operations of each hotel and a serious deficiency of management information for all levels for the whole group. Major problems within hotels in the group include the treatment of overbooking and the time taken to process guests checking out. The hotels, generally, do not know the level of overbooking until guests show up and this causes friction between guests and staff and provides major problems for the front-office manager as well as playing havoc with the hotel’s operating figures. The problems at checkout are due to the time taken to make up bills and the queries arising from those bills, especially from the use of the telephone systems and the restaurant, which, at present, are manually consolidated in all the hotels (Beynon-Davies, 2009). This leads to confrontation with customers and front line staff frustration. Thus the main problems faced by Delica Hotels include manual booking procedure which results in time wasting and overbooking, lack of IT and information system, problems in financial control and operating under capacity and the decentralized management system for its five hotels. In spite the problems the firm provides its customers with superior hotel experience, it has the best hotel services and it has spacious hotel rooms. In addition, the firm has an opportunity to solve its problems by embracing information technology (Aviason and Guy, 2006). The overbooking problem can be overcome by implementing a customer relationship management (CRM) system while low capacity can be addressed by increased advertisement via internet (Kroenke, 2008). Implementation of a favourable information system can enable the firm to overcome financial control problems (O'Brien, 2003). The firm can only overcome the problems if it employs an appropriate business strategy. The suitable business strategy for Delica Hotels is to be customer focused (Gregory, Papadopoulod, and Wita, 2009). This will require that it gets close to the customer. This will enable the firm to understand completely what the customers want. This will in turn help Delica Hotels to understand how the firm ought to satisfy the needs of its customers and to make them loyal to their services. To satisfy the customers and win their loyalty the firm will have to provide quality services to the customers and communicate them to other potential customers (Beynon-Davies, 2009). This will also entail ensuring that customers who book at the hotel have an assurance that no one else will be allocated their room (Gregory, Papadopoulod, and Wita, 2009). This will avoid cases of overbooking that are currently common at the Delica Hotels which have often resulted in disputes between frontline employees and the customers. To know whether the firm’s customers are satisfied, Delica Hotels ought to carry out customer surveys to show the proportion of customers who are very satisfied as opposed to those who are merely satisfied (Gregory, Papadopoulod, and Wita, 2009). These surveys should be inexpensive and be able to provide real time information. These surveys will enable Delica Hotels to understand and evaluate customers who are likely to be loyal to the firm. The firm should also be able to communicate to its existing and potential customers the services offered. This will help the firm to increase its customer base and reduce cases of reduced room occupancy rates at the firm. From the customer reviews the firm will be able to know what the customers like about the firm and what they dislike (Gregory, Papadopoulod, and Wita, 2009). From this the firm will be able to tailor their services in line with the customer’s needs. Once this has been attained the firm ought to communicate the hew service portfolio that will increase the number of customers coming to Delica Hotels. Most customers in the hotel industry are not only interested in quality services but also faster booking process (Beynon-Davies, 2009). Thus Delica Hotels need to adopt a business strategy that ensures that booking process is faster. Customers who call to the firm ought to spend limited time in the booking process. For the firm to attain this it requires a balanced scorecard. Balanced scorecard is a strategic planning and management system which is used to align business activities to the vision and strategy of the firm in order to improve internal and external communications and to monitor the performance of a firm against strategic goals (Gregory, Papadopoulod, and Wita, 2009). Under the balanced scorecard the organization is visualized in four perspectives to help in development of metrics, collection of data and analysis. The four perspectives include the learning and growth; internal business processes; the customer and financial. The learning and growth perspective refers to employee training and corporate cultural attitudes related to both individual and corporate self improvement. In firms which value human resources, knowledge and skills of employees offer competitive advantage to a firm. Learning and growth constitute the essential foundation for success of any knowledge worker organization. Delica Hotels need to implement a learning culture (Beynon-Davies, 2009). This will enable it to improve the skills of its employees on how to serve their customers in better way in line with customer focused business strategy. The knowledge required in this case will include service delivery and computer literacy. Service delivery skills will enable the frontline employees to serve customers better while training in computers will enable the firm to adopt IT and information systems that will enable the firm to become more competitive. Internal business processes perspective allows managers to know how well their business is running and whether its products and services conforms to customer requirements. In order to satisfy the customer the Delica Hotels ought to improve its booking process to avoid cases of overbooking and also avoid cases of confrontation between customers and frontline employees. The firm should also provide a platform for customer reviews that will enable it to identify the requirements of customers (Beynon-Davies, 2009). Once they have identified the needs of the customers the management will be in a position to tailor its activities in such a way to satisfy the customers (Aviason and Guy, 2006). The shareholders of Delica Hotels are also interested in profits for their investments (Gregory, Papadopoulod, and Wita, 2009). Thus the managers ought to device ways of communicating the services offered by the firm to existing and potential customers in order to increase the customer base and increase room occupancy rates (Kenneth, and Jane, 2010). Customer focus and customer satisfaction have become more important businesses in today’s management philosophy. Customers who are not satisfied will seek other suppliers to meet their needs. Firms with poor performance in customer satisfaction often results in the firm’s general decline in performance (Beynon-Davies, 2009). To develop metrics for satisfying customers, the target customers should be analysed in terms of the kinds of the processes and kinds of customers for which the products are being provided. Delica Hotels target customers are mainly business people. To increase customer base the firm ought to also target luxury travellers. In addition, the booking process as mentioned above, is unsatisfactory and hence the firm ought to improve it. The financial perspective provides financial data which is essential for the well being of a firm. This ought to be timely and accurate. In most firms the handling and processing of financial data is more than enough (Beynon-Davies, 2009). Delica Hotels has a decentralized financial data which is handled by individual hotel. The firm ought to implement a corporate database that is centralized and automated (Gregory, Papadopoulod, and Wita, 2009). This will reduce the need for many employees to handle and process financial data. The best information system that can support the above business strategy that is customer focused is the customer relationship management (CRM) system. CRM has three parts of application architecture. They include operational, analytical and cooperation. The operational part helps in automation of enterprise marketing, sales force automation and a customer service and support (Beynon-Davies, 2009). CRM provides information about the business environment, keeps track of customer preferences, buying habits and demographics in addition to sales staff performance. It also automates some service requests, complaints, product returns and information requests (Aviason and Guy, 2006). The system also allows customers to perform their own service via a variety of communication channels such as email, fax and web. The CRM has an application which allows automation of marketing (Gregory, Papadopoulod, and Wita, 2009). Internet personalization tools on this application allow firms to track behaviour on a web site and allow tailoring of the contact experience or generation of cross selling opportunities based on this behaviour. Given this features, CRM will enable Delica Hotels to develop better communication channels. The system will allow the company to be able to deliver instant company wide access to customer histories. Thus it will reduce time required to attend to a customer who needs to make a reservation by calling a reservation department of the firm (Beynon-Davies, 2009). CRM enables firms to realize that customer relationships exist at different levels including customer service and web presence. This allows the firm to start understanding the need for sharing data that is available throughout the organization. As consequence, the CRM system will enable the employees of Delica Hotels to make informed decisions and follow up on the different levels. Furthermore, if Delica hotels implement CRM the firm will be able to offer better customer service. This is because all data related to interaction with the customer are centralized (Beynon-Davies, 2009). Thus by implementing CRM the customer service department of Delica Hotels will have all the information it needs at their disposal. Thus all decisions made will be based on real time data and not via guess work. It will also allow customer service representatives to use push technology in leading the customer towards the information they need. With such system the customer is able to do most of this on their own since the CRM system is able to anticipate the need of the customer. This will greatly enhance the customer experience. Implementation of CRM system at Delica Hotels will also increase customer satisfaction. This is because the system makes the customer to feel more as part of the team rather than a subject for sales and marketing since the system anticipate the need of the customer (Aviason and Guy, 2006). Moreover, such firms are able to create detailed profiles such as customer preferences which enable it to meet the needs of its customers. Thus the system will ensure that guest service provided are based on the available detailed profiles such as customer preferences which will enable it to meet the needs of its customers. Complemented with products which exceed the expectations of customers; CRM system is able to increase customer satisfaction. As a consequence customers will be delighted and this will greatly increase customer loyalty to the firm. The firm is also able to identify new selling opportunities once it implements a CRM. Thus, CRM enables firms to manage their sales leads, accounts, orders, and case management which increases their revenue and customer satisfaction and reduces costs resulting from less administrative tracking time and greater turn around time (Beynon-Davies, 2009). For the case of Delica Hotels, cost of tracking cost of guest services will be reduced once this system is implemented. CRM systems will also enhance the ability of Delica Hotels to retain its customers. This is because the CRM system will help Delica Hotels to enchant its customers which will in turn increase customer loyalty who will keep on coming back to buy from the firm again and again hence resulting in increased customer retention (Beynon-Davies, 2009). The delighted customers will be turned from doubting clients to loyal advocates of the business resulting in more repeat business (Marite, 2002). CRM will also enhance development of innovative products and services. This is because the system is a more personal approach which leads to development and design of innovative and improved products and services. Such innovations will results in increased revenue for the Delica Hotels. Furthermore, CRM will enhance cross selling of Delica Hotels. By implementing an effective CRM, the selling of other products which are directly or indirectly related to the main product offered by Delica Hotels will be increased (Aviason and Guy, 2006). Thus the system will enable the business to highlight and suggest enhancements and substitutes of the main products which are desired by their customers. This will increase product lines for the Delica Hotels and enhance its profitability. The CRM will also enable Delica Hotels to increase its sells. This is because the firm will be able to identify and anticipate the needs and desires of the customers in a better manner than businesses without the system (Beynon-Davies, 2009). This will result in increased sales since it will have an efficient CRM, which bring innovative and beneficial products into the market. Delica Hotels need to develop a central IT strategy in order to bring some coherence to their operations. This strategy will allow alignment of IT and the business strategy. It will enable managers at Delica Hotels to understand that IT is a strategic asset and hence support it. The Delica Hotels as outlined above intends to implement a business strategy that is customer focused and thus the IT strategy need to be connected to this business strategy. By implementing a centralized IT strategy, the firm will be able to address all the four perspectives of a balanced scorecard outlined above. The main objective of this strategy will be to have a centralized management system, which can allow the firm to solve customer problems, communicate with customers and at the same time allow centralized management of finance (Gregory, Papadopoulod, and Wita, 2009). In order to implement the above ideas, Delica Hotels should source for a firm to develop and install the SAP CRM system. The firm sourced should be able to offer expertise in SAP CRM implementation, consulting and development. The firm should be charged with implementation and integration with existing software at the Delica Hotels (Aviason and Guy, 2006). In addition, the firm chosen should be able to customize the SAP CRM to fit the special needs of Delica Hotels. Since most of Delica Hotels employees are not much experienced in computer use, the firm deployed should be able to offer the required training for end users, administrators and developers at the hotel. The management should also be involved in sensitizing the employees on the benefits of using the new system to avoid cases where the implementation process could be opposed by employees. Implementation of a central IT strategy and CRM system is essential to the firm because it will allow centralized management of the firm’s finances and operational activities. This will also reduce cases of overbooking that are common at the firm. Hiring a firm to implement the system is essential since it will provide professional advice on how to use the new system and offer training to employees at Delica Hotels on how to use the system. Reference Aviason, D., and Guy, F. (2006). Information systems development: methodologies, techniques and tools. Canada: McGraw-Hill. Beynon-Davies P. (2009). Business Information Systems. Palgrave: Basingstoke. Gregory, W., Papadopoulod, G., and Wita, W. (2009). System Development: Towards a Service Provision Society. London: Spring. Kenneth, C., and Jane, P. (2010). Management information system. Ontario: Pearson Prentice Hall Kroenke, D. (2008). Experiencing MIS. Upper Saddle River, NJ: Prentice-Hall Marite, K. (2002). Information systems development: advances in methodologies, components, and management. Oxford: Oxford University Press. O'Brien, J. (2003). Introduction to information systems: essentials for the e-business enterprise. Boston, MA: McGraw-Hill. Olegas, V. 2005. Information systems development: advances in theory, practice, and education. London: Spring. Read More