Operations Management in International Hospitality Management - Essay Example

Topic: Technology in Restaurant and Hotel Operations Journal: Operations Management in International Hospitality Management Hospitality industry players like hotels and restaurants have been affected by the advancement of technology in the administrative and management tasks. Service design and hence, customer experience are also enhanced using modern technology. Service quality can be improved by customizing the product, modularizing it, outsourcing components and using tools like POS terminals that allow the customer to design his/her own service. Technology can also be used to enhance the service process. To expand the outreach of the hotels and restaurants and to cater to customers through various delivery modes and to capture a wider customer base, they can use internet, websites and maps and imaging services. Keywords: customization, technology, service quality, service outreach, POS terminals, customer databases. INTRODUCTION Technological innovation has transformed every field of business today and the hospitality industry is no exception to the rule. In the past ten years, the improvement of technology has not only helped the global hospitality enterprises to grow rapidly, but also guided the consumer attitudes and consumer behavior. Therefore, the overall volume of the hospitality industry was promoted from quantity to qualitative. The modernized hotel collects the guest rooms, food and beverage, communication, amusement, commercial culture and other various kinds of services and facilities – it is an integrated consumption place. The hotel needs organization on a large scale as there are many there are many service items. Additionally, the amount of information that flows into a hotel everyday – like every modern organization – is large. If a hotel wants to improve labor produce, lower costs, improve the service quality and management level and promote the economic benefits of the organization, it must carry on the modernized information management through the computer. As we entered the Internet era, the sustainable development of the information and communication technologies is having a profound impact of the hotel industry. In 1963, Hilton Hotel of the United States installed a small IBM computer for the automatic managing of hotel rooms. This marked the beginning of using modern information technology in the hospitality area. As Law & Jogaratnam (2005) report, ‘with the increasing demand for intensive information from customers and hotel practitioners, hotels have adopted computer-based IT facilities to improve operational efficiency, reduce costs, and enhance service quality’. With the use of IT in their businesses, hotel managers expect that their profit margins and financial returns will increase. IT starts and ends with customers in a hotel. The investment in IT thus benefits the hotel if it enables customers to have a better experience and the hotel staff to work more efficiently to better assist customers. It is also argued that the use of IT can place knowledge and information at the core of a hospitality organization’s competitive profile (Law & Jogaratnam 2005). HOW TECHNOLOGY IMPROVES A HOSPITALITY SERVICE ORGANIZATION Nikolis (2008) reports that the first innovation in the hospitality industry was in the process of billing. Advanced accounting software did away with the old-fashioned paper-based bookkeeping. This was followed by the use of information technology in booking systems. Phone bookings have been common for the past few decades but now it has gone way beyond that. Hotels partner with travel companies to provide customers with integrated travel packages. They place online advertisements and allow online booking. In the future, we can expect to see intelligent booking systems and online menus to order services before arrival. Furthermore, the management and administration activities involve the use of information technologies. Everything from the employee payroll to customer databases are recorded on computers. In addition, the components of the service itself are mechanized. The use of elevators in hotels is one of the earliest examples. The creation of Wi-Fi hotspots in hotel rooms and lobbies is another example of how value can be added for the customer with the use of high-tech equipment. Customers nowadays have POS terminals at restaurant counters to order their food. Law & Jogaratnam (2005) reported that ‘In terms of IT equipment and services that were available to guests, hotels in 2003 were generally able to provide a full range of facilities that had been only partially available in 1997’. The focus nowadays is not only on the use of technology to ease the administrative burden of a large organization but also to enhance the quality of customer experience by using technology in ways that it enhances customer satisfaction at the customer touchpoint. Improving the Service Quality According to Pratten (2003), service quality is a core element for hospitality organizations to be successful because the success depends on the customer’s satisfaction which is the customer’s entire experience. As the hospitality industry goes to the global scale, those firms are busy seizing customers in order to sustain businesses. A quality service is thus a crucial approach for gaining customers because quality service is basically perceived as customers subjective interpretations of their experience and it is also crucial to customer satisfaction (Garavan 1997). Several tools for improvement in the design of services are identified by Heizer & Render (2005). These tools, which allow the application of information technology to service industry, can be applied in the hospitality industry to improve the quality delivered to customers. To design a service, the service providers can use the following techniques: Delay customization in the process: Delay the customization process to allow the customer to obtain the maximum level of satisfaction. For instance, restaurants and fast food counters use touch-screen POS terminals to allow customers to customize their own meals (POS terminals will be discussed in detail in the next subsection). Modularize the product: The customer should be able to choose from a variety of components. For instance, in hotel suites, the customers can customize their own suites online in advance on booking. They can design their own suites using modules such as balconies, waterbeds and continental breakfast. Divide the service into small parts and identify those parts that lend themselves to automation: For instance, hotels can mechanize in their housekeeping services or the telephone operator services. Some further tools can be used by managers to improve the quality of their overall service: Outsourcing: To improve the quality of each small part of their service, service providers can outsource the modules of their service. For instance, laundry services are outsourced by a large number of hotels. This has the added risk that the managers may lose control over the service quality but the advantages of a far greater range of choices for the customer can outweigh such costs. Using customer databases: Using databases allows employees to use previous customer records to provide better service next time. For instance, if the records show that the customer orders a single-bed hotel apartment the first week of each month, this can be used to automatically book the same hotel apartment for the customer the next time he asks for a room. Use of Point-of-Sale Terminals: A point-of-sale (POS) system is ‘a computer automated alternate for a cash register. The POS system can perform such functions as record and track customer orders, process credit and debit cards, and manage inventory’ (Articlebase 2009). The article ‘Is a Point-of-Sale System Worth the Money?’ (2009) further explains that these systems are designed with a touch-screen interface that allows servers or cashiers to simply press the buttons that identify the items being ordered or purchased with new windows opening up if there are additional components that need to be ordered as a part of the initial purchase. This ensures that the cashier or server does not forget anything vital to the order, as it cannot be completed until the appropriate selection has been made. POS terminals offer other benefits such as: Additional prompts can be placed inside the POS system, giving your employees additional reminders such as reminding them to smile at the customer when they begin taking an order or letting them know current specials for suggestive selling. A well-structured POS system can take all of the guesswork out of order taking, covering every possible angle and suggesting questions to your employees that they may not have thought of on their own. POS systems allow businesses to maintain detailed sales reports so they can evaluate marketing methods and make any necessary changes to improve sales. Sales can be assessed by promotional activities, SKU, reward programs, when the products are sold, and what products are sold. You can even track clerk sales. You can identify peak selling hours and adjust staff accordingly. A POS system can also provide up-to-the-minute sales reports for the day, week, month, or year. POS systems allow better for better inventory management. You will know when you are running low on certain items so you can quickly reorder. You can calculate and create restocking orders and email them to suppliers. You will also know what items are selling so you can better manage merchandise displays. As well, there is no longer any double entry of orders. With POS, item scanning is more accurate which reduces sales discrepancies. Customer service is improved. POS systems allows for faster transactions resulting in faster customer service. There is also integrated credit card processing. The system allows for managing and processing gift cards as well as managing loyalty reward programs which helps with various marketing plans. There are also charge accounts that are built into the software. Enhance the Service Process Not only can technology be used to enhance the customer experience, it can also be used to create cost-efficiencies in the service process. This can be done by using such techniques as: Automated payrolls for employees Using Virtual reality and Computer-aided design to design hotel lobbies, restaurant layouts and snack counters Automatic Identification systems for employees to enhance security in hotels Using process control systems such as sensor-based ovens in restaurant kitchens which allow Establishing computerized customer databases to allow faster processing Using technology to provide better service to customers The article ‘Tweaking Technologies’ (2009) reports on a number of technologies used by hotels to provide quality to customers. These include entertainment panels for mobile devices and automated guestrooms. Security systems allow the management to track the activities of a housekeeping individual and measure their productivity. Minibars are fitted with sensors that alert the hotel’s computer when an item is removed and used by the hotel guest. In today’s world, technology is so fast-paced that it is difficult for a customer to compare one company to another on the basis of technology as different hotels may be providing different technological services. In the end, it would be about which technological innovation appeals to which customers. However, Victorino et al (2005) have concluded that in the hotel industry, the service process innovations affect the competitiveness of only economy level hotels rather than upscale hotels. This is mainly because those who patronize the upscale and mid-range hotels are more brand conscious and are less concerned with technological innovations in the hotel. Expanding the Outreach Technology not only allows hospitality services providers to expand the services they are providing, but also to expand the places they provide these services in. Khan & Khan (2009) examine the impact of technology on the outreach of operations of the hospitality industry. According to the research conducted by Khan & Khan (2009), services move from direct to indirect delivery mode with the application of technology. As innovations in the service process take place, service providers switch from direct to indirect mode of services. For instance, online pizza ordering is a thriving business. Not only does the use of information technologies help the hospitality industry expand its customer base, it also helps them market to attract this customer base in the first place. Bentley (2009) explains how mapping and imaging technologies can allow the hospitality service providers to ‘put themselves on the map’ and be found by customers. Research has indicated that one of the key factors in the success of any player in this industry is its location. Therefore, mapping services can allow customers to know of all the restaurants or hotels in a particular locality the customer intends to visit. This is further facilitated by the imaging services that can allow the interested customers to view the service outlet from a series of photographs hyperlinked from the map. CONCLUSION The hospitality industry has come a long way in the adoption of information technology. Over the years, countless technologies have been introduced in the sector to keep the customers satisfied. In the past, most of these efforts were geared towards the automation of the administrative sections of a business for cost-cutting purposes. Now, the focus is more on adding technological innovations in areas that would improve the overall customer experience. The efforts of all service organizations nowadays are in the direction of providing integrated solutions to customers. Hotels are partnering with travel companies to provide a complete travel package to customers. Hotel bookings are made with the finest details specified in advance such as what kind of eggs you want delivered to your room in the morning. However, innovation has been made in every aspect of the business. A lot of this innovation makes a hotel or restaurant very stylish in the customer’s eyes and enhances the brand image of the company. In any service industry, customer perception and customer experience is the most important determinant of the company’s profitability. Therefore, managers in this industry should keep up with the latest trends or they will lost out in the competitive world. REFERENCES Bentley, R 2009, ‘Put yourself on the map’, Caterer ad Hotelkeeper, vol. 199, no. 4588, on Hospitality and Tourism Complete database, viewed 6 September 2009, . Fitszimmons, J A and Fitszimmons M J 2001, Service Management: Operations, Strategy and Information Technology, 3rd international edition, McGraw Hill, Boston. Garavan T N 1997, ‘Interpersonal skills training for quality service interactions’, Industrial and Commercial Training, vol. 29, no. 3, pp. 70–77. Heizer J and Render B 2005, Operations Management, 8th edition, Prentice Hall. ‘Is a point-of-sale system worth the money?’ 2009, Articlebase, viewed 7 September 2009, . Khan M and Khan MA 2009, ‘How technological innovations extend services outreach to customers’, International Journal of Contemporary Hospitality Management, vol. 21, no. 5, viewed 6 September 2009, . King, J H and Cichy, R F 2006, Managing for quality in the hospitality industry, Pearson Prentice Hall, New Jersey. Law, R and Jogaratnam, G 2005, ‘A study of hotel information technology applications’, International Journal of Contemporary Hospitality Management, vol. 17, no. 2, viewed 7 September 2009, . Nikolis, N 2008, ‘Information technology in hospitality industry’, Articlebase, viewed 7 September 2009, . Ottenbacher, M C and Harrington, R J 2009, ‘The product innovation process of quick-service restaurant chains’, International Journal of Contemporary Hospitality Management, vol. 21, no. 5, viewed 7 September 2009, . Pratten J D 2003, ‘The importance of waiting staff in restaurant service’ British Food Journal, vol. 105:826–34. ‘Tweaking Technologies’ 2009, Hotel and Motel Management, vol. 224, no. 9, on Hospitality and Tourism Complete database, viewed 7 September 2009, . Victorino, L, Verma, R, Plaschka, G and Dev, C 2005, ‘Service innovation and customer choices in the hospitality industry’, Managing Service Quality, vol. 15, no. 6, viewed 6 September 2009, . Read More