In total, Marriott operates hotels under fourteen different brands, with four brands in full-service lodging, three in select-service lodging, three in extended-stay lodging and four in timeshare.
This extensive accommodation portfolio is combined with a synthetic fuel production facility, which Marriott operates as a joint venture. (Global Market Information Database, 2005) Given the wide size and scope of Marriott’s operations around the globe, information systems are vital to the smooth running of Marriott’s hotel operations, thus this piece will examine how they have fit into such a diverse portfolio.
Many business organisations in today’s information age have holistic, broad views of business operations, and tailor them to accommodate the different types of individual business units or operations within their portfolio. In the past, companies were relatively self-contained and information management was straightforward, but the diverse business needs of the modern environment, including strategy formulation, process definition, product portfolio definition and construction, capital equipment ownership, technology, infrastructure and operations can no longer be kept on such a tight rein as many companies held them a decade ago. (Olson, 2005)
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The way enterprises manage their operations has been changed, in fundamental ways, by the information age, and these new approaches are applied by corporations to strategically manage operations and diverse portfolios with virtually every new initiative, whether it is internal transformation, where direct control of risk factors is very high but technology is new; with partners, where direct control over risk factors is shared; or with other stakeholders where direct control over risk factors is often very low. As such, it is important that diverse, multinational operators, such as Marriott International, have solid, manageable information systems in place, to better enable them to manage their diverse operations and investments.
As such, this piece aims to use various sources of secondary research to analyse some of the systems Marriott International uses to manage its hotel and catering operations information across its global hotel holdings.
Procedure / Research
My primary method of research has been to use online databases, such as EBSCO host, MINTEL and Euromonitor, to find relevant articles, both on the use of information systems in business operations in general, and more specifically on the use of information systems within Marriott International’s business model. One of the main, and most well known, uses of information systems by Marriott International is its focus on technology initiatives to boost the company’s sales.
In order to accomplish this, the company has implemented a detailed customer-relationship management package from Siebel Systems Inc., and engaged in a plan to upgrade its central reservations, revenue and property management systems, allowing customers to view and book rooms online. (Rosen, 2001)
Another, less well know and less obvious area where Marriott International uses information systems is across its many in house catering departments. To aid with this, the company has completed a rollout of the ChefTec recipe management, food costing and inventory system, a Windows-based platform developed by Culinary Software Services Inc. Marriott International corporate executive chef Peter D’Andrea expressed enthusiasm with the new system and discussed the operator’s previous menu management process. (Nation’s Restaurant News, 1999)
For example, the system means that recipes can be converted automatically from domestic, to metric scales, to imperial amounts in the United Kingdom, where Marriott has many properties. The operator also has versions of software in several languages, including English, Spanish and German, and is working on one in Mandarin Chinese. Marriott also added its own glossary of culinary terms, optimum cooking times for off-used foods and a year-round planning feature, which helps chefs with seasonal menus; for example it informs them that March is the peak month for asparagus.
Denver-based Culinary Software Services also worked closely with Marriott to cull about 2,500 of its recipes and 500 pictures and replicate them onto CD-ROMs, which were be distributed to more than 400 of Marriott’s full-service hotels in the United States and abroad. (Nation’s Restaurant News, 1999) Taking advantage of ChefTec’s core and advanced features, Marriott International also will be able to do the following: organize inventories based on bids from multiple vendors; search for recipes by ingredients, categories and names; attach photographs and video files to recipes; and save recipes in the hypertext markup language, which will allow chefs to distribute them over the Internet.
Findings / Analysis
In the context of the hotel industry, computers and information systems do three things very well, all of which are important in the hotel and catering industry. One, they handle large amounts of data. Two, they communicate at the speed of light. And three, they follow rules. (Hamstra, 1997) These factors are hugely important when managing a 3,000 hotel portfolio across seventy countries around the world. Not only must information, including booking and reservation data, be shared quickly with all other properties, but it must also be accurate, and in line with the company’s overall strategy.
Toward that end, the company has recently tested an Intranet prototype called Oasis, which is designed to give unit-level managers instant access to the information they need to run their locations, and manage relationships with their customers. (Rosen, 2001)
Accounting is one of the more obvious areas in which technology has an impact on Marriott operations, as although most units have typically been equipped with basic software programs, much like small businesses, over eighty percent of period-end transactions are now handled electronically by year-end. (Rosen, 2001) The company is about halfway through its rollout of the Xcellenet system, which allows operators at the unit level to download software from corporate headquarters and to digitally transmit accounting reports via phone lines.
However, the company keeps a wary eye on its technology expenditures, often using existing technologies longer than other businesses would. Although the entire Marriott organization spent $100 million on technology in 1997 (Hamstra, 1997), the lodging side of the company generally has the greatest need for the most advanced systems in its global hotel network. Often systems are tested and implemented in the lodging division before being adopted by the catering and other departments.
In human resources, Marriott is putting advanced technology to use both in recruiting and training, including the company’s Alexus system, which uses laser-scanning technology for the electronic storage of resumes, which can be accessed via the Internet by human resources personnel. When a position needs to be filled, Alexus automatically sorts through the resumes in its database to display those that represent the most qualified applicants.
The company also sees a bright future for its CD-ROM interactive training program, which was developed in-house (Rosen, 2001). The product, which is used in conjunction with workbooks, gives unit-level managers an orientation to Marriott International, and subsequent segments in the series provide training in such areas as conducting pre-shift meetings, planning a menu and arranging reservations. Although Marriott is still in the early stages of the rollout of this technology: as of 2001, the second CD in the series was in a 40-unit test and the third was in a five-unit test, the company had already achieved significant time savings in training through use of the program, according to Fran Szabo, director of interactive training at MMS. (Rosen, 2001)
The company’s information systems and technology are also reaching the stage when they can be used to enhance the services the company provides to its business clients. The same employees who eat in the company cafeteria may someday be able to click on an icon on their computer screen that allows them to order food to take home or to gain access to other services, such as car detailing, and business clients who like the recipes served in the restaurant may be able to do likewise.
Technology also plays a role in food production, with about 20 percent of the company’s units using some form of automation in the production process, primarily in menu control. Here, however, the fundamental stumbling block will be in following rules: If somebody says, ‘My mom’s apple pie is better than the standard recipe,’ then the next thing you know, you’ve got 120 different recipes for apple pie and you lose your procurement leverage. (Hamstra, 1997)
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Another massive impact of information systems on Marriotts business is the impact of providing ‘free-to-guest’ internet access technology on the hoteliers’ revenue. When this technology first came on the scene, hoteliers saw it as an opportunity for revenue generation, however as time progressed, it became a necessity for guests, as well as part of the strategy to create exceptional value. For instance, at Marriott International Inc.’s Courtyard and SpringHill Suites brands, guests are taking advantage of the high-speed Internet access service for more than just electronic-mail. They are accessing digital music and other types of digital content, and Marriott is currently responsible for the costs of this. (Shaw, 2005)
However, as reliable, free to guest internet access becomes more and more of a requirement for guests, Marriott is being forced to build these costs into its business model, and thus is able to take a more holistic approach to customer information technology and systems across its business. This enables Marriott to gain supply chain leverage in this area, thus reducing the costs of information systems and Internet access across the group as a whole.
Conclusions and recommendations
By aligning the IT strategy with the business strategy over the past three years, Marriott’s senior management has grown to consider technology as an investment rather than an expense. The concept of assigning a business lead and an IT lead to all major projects that are technology-enabled starts at the executive level (Computerworld, 2001), and executive decision-making meetings, such as Marriott’s Business Strategy Review, e-Business Council and Digital Business Strategy, are all cross-functional and co-led.
As a result, IT better understands and supports Marriott’s business strategy, and business executives have a much better understanding of what technology can and can’t do. This provides Marriott with a sustainable competitive advantage.
CIO Magazine named Marriott International to its Top 100 list for the fifth time. Marriott is the only hotel on the list, which recognizes organizations for excellence in information technology. (Lodging Hospitality, 2004) Marriott’s presence on this list clearly demonstrates the company’s commitment to developing its information systems, and using them to support its business.
Given that Marriott’s revenue grew by 44% between 1999 and 2004, and profits grew by 49% over the same period (Global Market Information Database, 2005) at the time of the company’s latest investments in information systems, it is clear from this that information systems are vital to the smooth running of a major multinational hotel operation and, indeed, this provides evidence that information systems are vital for any major business operation.
Also, in order to further growth, Marriott is likely to focus strongly on international expansion, which is crucial, as Marriott’s portfolio is currently highly reliant on US hotel sales. As a result, Marriott must focus on developing the speed and accuracy of its information systems to facilitate this growth, and stay in its current, market leading, position.
Computerworld (2001) In their own voices. Vol. 35, Issue 13, p. 42.
Global Market Information Database (2005) Marriott International Inc. Euromonitor International.
Hamstra, M. (1997) Marriott finds no cookie-cutter solutions for technology. Nation’s Restaurant News; Vol. 31, Issue 10, p. 110.
Lodging Hospitality. (2004) Tech Bytes. Vol. 60, Issue 13, p. 54.
Nation’s Restaurant News (1999) Marriott International’s ChefTec makes recipe filing a ‘snap’. Vol. 33, Issue 20, p. 86.
Olson, E. G. (2005) Strategically managing risk in the information age: a holistic approach. Journal of Business Strategy; Vol. 26, Issue 6, p. 45.
Rosen, C. (2001) Marriott Uses CRM Application To Boost Sales. InformationWeek; Issue 843, p. 73.
Shaw, R. (2005) Free-to-guest services migrate from revenue streams. Hotel & Motel Management; Vol. 220, Issue 18, p. 26.
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