HOTELS Cloud Computing Part 3

Posted: 09 Nov 2011 | 6:00 am

Here is our final installment of Terence Ronson's article on "Cloud Computing" -

"Day-to-Day Management

With systems now being off-property, the traditional model of system management will change to one that is handled by others. Likely you will downsize your local IT team, and hand-off this responsibility either to a Team managing the DC, your Corporate IT team (via a Help Desk), or directly to a vendor if they are operating a SaaS model.

Changes to the system like rates, menu prices, codes, users etc., will be processed via The Center and your request placed in a job queue along with others from your company. Prioritization will take place based on severity, with system faults escalating to the top of the queue, and others falling behind. A Server failure will always carry a higher priority than changing a menu price.

Possibly, there will be different teams to handle different types of requests, depending on how the Center is managed and how large is the enterprise and Team.

Some of these activities have been around for a while, and have seen the Operation fighting with IT over prioritization and alignment with service levels...

Costs

As mentioned earlier, Cloud based computing models will see a paradigm shift in the way these systems are paid for.

Under the traditional model, the Owner of your property will pay for all Hardware and Software, including Infrastructure (Capex). Service fees then fall under Opex.

Under the Cloud-centric model, the Owner still pays for on-property hardware and software, but this is now much reduced since the Servers and Applications will be off-property. Computer rooms are scaled down in size and complexity, as could be the network infrastructure.

But who pays for the DC? You will of course - the Business, and out of Opex. OUCH!

Since it's unlikely that the majority of Hotel Groups will build and setup their own DC's, they will opt for the Grey version - Hosted Models, defraying costs across the Enterprise using some kind of pro-rated financial model. This equation will be company specific, and I'm not even going to speculate as to how this be sliced and diced, but suffice to say - you will be paying for it - and it will be a Cost Center - appearing as a recurring expense somewhere on your Financial Statement.

Now YOU know a bit more about The Cloud, what type of Hotel Systems do we see moving to The Cloud?

Short answer: All, however, let's note some current favorites;

PMS

HR

Sales and Catering

Revenue Management and Optimization

CRM

Accounting to include Payroll

Menu and Recipe Engineering

Telephone (PABX)

Telephone Call accounting and Voicemail

ERP (Enterprise Resource Planning)

IPTV to include content

Service Tracking/Service Optimization

Spa & Leisure

Point of Sale

Office Applications (such as Email and Microsoft Office)

Access control

Guest Internet access authentication

From a Vendor and Technologist perspective, virtually all Hotel based systems are destined to move to The Cloud.

What should be my Game Plan from here?

Firstly, you need to mitigate risk. A Hotel in its entirety is a mission-critical operation, and really cannot afford for any of the working parts to go down or fail. As a well oiled machine the fact that the sum of its parts make up the business as a whole - the Guest Experience, means that if one of the systems fail, much the same as could happen if they were on-property, you need to know how to efficiently function without it.

Being off-site, and having a single connection to all of them via the Internet, logically means that the likelihood of some kind of failure is increased - so a well thought through Business Continuity plan is essential.

Secondly, you need to understand that there will be a cost, financially and operationally. Expenses move from Capex to Opex and all concerned need to be aware of the ramifications.

Thirdly, know that support and system management is now out of your-day-to-day control, and some would argue placed into the hands of experts, who are more adept at managing and fixing those systems. Those experts will also take care of upgrades and system patching, which were often burdensome to the operation.

The train has left the station as far as moving to The Cloud is concerned. But I predict Hotels will not go 100% into The Cloud - some systems and services will be left on-property - this due to cost, security and practicality.

And to echo this thought - I recall hearing someone recently say, "The Cloud is for everyone - not for everything", and I agree with this wholeheartedly."

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