While the industry should remain realistic about the capabilities of cloud computing and SaaS, there is no doubt the technology has streamlined the way hospitality operates, writes James Stephen.

Cloud computing and SaaS unquestionably offer the hospitality huge savings in terms of money and time – no argument. However, it’s worth remembering the advice given to the young Peter Parker (AKA Spider-Man) by his Uncle Ben – “with great power comes great responsibility”.

So while this breath-taking new tech offers hotels the potential to save significant chunks of their IT budget – or at least shift it from capital expense to operational expense, freeing up funds towards guest services and other areas, hotels should make the cloud computing/SaaS switch with their eyes wide open.

This includes investing time in choosing the best service provider to go with, and being prepared to switch supplier if deemed appropriate. Compare vendors not only for cost and features but also uptime, data privacy, security and ownership, and flexibility.

Rocking the Cloud

Bernard Ellis, CEO of GEMtouch Guest Experience Management Solutions, has had a front-row view of the industry’s adoption of cloud computing since he took part in bringing the SynXis Agent CRS to market in 1999, and feels the industry is now better positioned than ever to ramp up the pace.

“At this point, hindsight is probably making it pretty clear to the laggards how they’ve been increasingly penalised over the years, whether it’s eroding RevPAR, rising OTA leverage, lukewarm guest loyalty, lost group bookings, and in general the missed opportunity to appeal to a new generation of tech-dependent travellers and employees.”

But he adds that they can at least take comfort in now reaping the benefits of a cloud industry that has honed its best practices, reached economies of scale, and achieved acceptable levels of speed and reliability. There should be fewer shortened careers and busted budgets, he believes, now that several early cloud computing myths have been debunked by their predecessors, for example:

Myth 1: I will lose influence over my vendors’ product direction, since everyone has to be on the same version of a ‘community model’ software for the cloud to deliver its lower cost of ownership. I won’t get any custom features, and I’ll have to stumble over everyone else’s that I don’t need.

Big new customers still get big new influence, but independents have actually gained more influence as a group, thanks to the voting mechanisms and social media style methods of collecting feedback that have become common. The bittersweet aspect of the subscription model for vendors is that, while delivering a cash machine of ‘automatic’ recurring revenue, by definition it also makes every customer a short-term flight risk almost immediately after they sign. No customer can be taken for granted. And there is nothing preventing delivery of custom features – for a variety of reasons cloud solutions have become masters of ‘parameterised features’ that can be turned on only for one user or segment, while other users don’t need to know or care.

Myth 2: Interfaces will more often be above property and cease to be a headache. I’ll have much easier access to my data, for reports and ad hoc analysis.

HTML and other protocols native to the web have indeed made it easier for interfaces to achieve “plug-and-play” status, but most people failed to realise that the “play” would be by such tougher rules. Many new security requirements present themselves once interfaces need to communicate beyond their firewalls, usually between multi-tenant databases shared by unrelated customers, and resulting in each customer to having less access to their data, not more.

Myth 3: Data security will decrease.

The multi-tenant environment forces a much higher discipline of data security when it comes to access, but also has multiple customers sharing the cost of robust redundancy and backup capabilities that no one of them could justify on their own.

Myth 4: The IT department is no longer needed.

The IT folks did this to themselves early on to some extent, taking an attitude of “If I don’t have to host it, it’s not my problem.” At first, their counterparts on the business side were just as happy to choose their own solutions unfettered by techies. But the ensuing interface chaos brought sneakers and suits together again, with IT’s role evolving back to one of actually knowing what the applications do, and evaluating how well they are supporting the objectives of the business.

Myth 5: Implementation will be dramatically cheaper and faster.

No, and, um, no. Sorry folks. OK, no hardware has to be specified, ordered, and staged anymore, and a lot more configuration can be done remotely in advance, in bite size pieces. But the new parameterised world means there are a lot more options to be reviewed and considered, and that takes time. GEMtouch is a prime example, in that it can be built to rationalise inventory and booking processes for very different types of activities such as golf and spa, potentially from different sources, and at a multi-property or enterprise level. End-user training, can become extremely streamlined, and in the case of guest self-service, doesn’t even happen, but making this happen requires investing an inversely proportionate effort in up front configuration.

To conclude, while initially earning a reputation for unpleasant surprises and broken promises, the cloud now offers much more predictable outcomes. The overriding risk cloud computing now brings, whether talking about personalisation or harnessing big data, is that of untapped potential.”

Conversations in the cloud

Peter Agel, Hotel Segment Leader at Oracle Hospitality, sees hospitality now experimenting with cloud technologies and expects the industry to have more intense debates about migrating to a cloud environment as managing traditional IT infrastructure across properties becomes increasingly more challenging and inefficient.

“While the hospitality industry is currently having robust conversations on how to take advantage of the cloud opportunity, Oracle Hospitality has seen customers use cloud solutions to create a single view of how consumers engage with global hotel properties, simplify POS configuration across properties and streamline kitchen operations in quick service and fine dining restaurants.”

Oracle Hospitality has two main cloud solutions for the hospitality industry: OPERA Cloud, an enterprise platform for hotel operations that can accelerate innovations to the market place, improve operating efficiency, and reduce IT cost and complexity; and Simphony Cloud Service, a hospitality management platform that provides point-of-sale and back office functionality to streamline kitchen operations, enhance guest engagement and standardise POS configurations across properties.

One of the key benefits of OPERA Cloud and Simphony Cloud Service for Oracle Hospitality customers is the ability to continuously deploy new innovations in a cloud environment without the need for expensive and time-intensive updates.

“We believe the hospitality industry will accelerate its move toward cloud solutions for one major reason: to respond to the ever-escalating demands of consumers in an era of individualisation. According to recent Oracle study The Era I Enterprise: Ready for Anything, which surveyed 300, C-level executives across a spectrum of industries in North America, 84 per cent said their organisation has witnessed a trend toward customers wanting a more individualised experience. But fewer than 20% gave their organisation an ‘A’ in its ability to offer such a degree of customer (or employee) experiences.”

Study respondents acknowledged weaknesses such as an inability to respond quickly enough to change or opportunity, and to offer highly individualised products and services. Most importantly, 81 per cent of survey participants said they believe there is an important link between cloud-based IT solutions and their organisations ability to deliver individualised customer experiences.

“Furthermore, many IT experts say today’s on-premise operating model is unsustainable, considering that 75 per cent of expenses are typically drained by routine maintenance and integration efforts,” adds Agel.

Moving to cloud, with its promise of reduced IT complexity and accelerated innovations, will be essential to deliver exceptional service to guests – and earn their loyalty, he concludes.