Hospitality operators are increasingly looking at Web-based applications for true enterprise visibility-using application-service providers (ASPs) to get remotely hosted IT systems that can boost business efficiencies and spare IT budgets.
"The key question with ASPs is: 'What is the right time to adopt on the technology learning curve? Should you be an early adopter or a fast follower?'" asks Dan Connolly, assistant professor of IT at the University of Denver's School of Hotel, Restaurant, and Tourism Management. With ASPs it's easier to share data, allowing better integration with suppliers and other business partners by sharing order data, and replacing telecommunications. Regional managers can also view and compare different operators' data from any Internet portal.
There are, however, some concerns. "The one-size-fits-all model doesn't provide much choice on upgrades, etc. The devil's in the details," Connolly explains. "If you need a new feature or enhancement, you've got to go with the masses or get in line. The SLA is not worth a lot, if you're not up and running-and that can have long-term implications."
Tracking guest habits For multi-concept restaurant companies like Bari Management, ASPs provide a one-stop shop for most of their IT needs. According to Jonathan Sellers, director of information systems at Bari owns 56 Burger King and six Tony Roma's franchises, as well as 13 fully-owned Original Roadhouse Grills. Bari uses Aloha Enterprise from Radiant Systems (radiantsystems.com) for reporting metrics and alerts on all three concepts, and for data integration-sending payroll to ADP, sales to general ledger, and collecting invoices.
"The e-card option-a plug-in for stored value gift card sales-has doubled our ability to bring customers back in," enthuses Sellers. "Change is still available upon request, but most people come back to use up their cards." Bari started the Original Roadhouse Grill concept with the ASP in November 2003, and has now migrated across all three concepts. "We now track guests' habits, and can invite a lunch guest back for a free dinner or strategically change guests' habits by offering awards to try something new."
Sellers reports no bumps so far with the ASP model or the e-card. "It's a great package, but we went from having very minimal information to more than we knew what to do with," he says. "That can scare users and upper management. Our CEO commented 'How do I know it's right?' so we had to go into a long process of validation, turning it into usable information." Training was also an issue, according to Sellers. "They handed us this package with a few online training sessions but, we didn't have the training until it's was installed. Hospitality wants instant ROI, so we brought everyone into a room for training, which we turned into functions and reports now."
"The biggest thing is to write your RFP and know what you need," advises Sellers. "The vendors will show you some really technically advanced things, and you're going to be in awe-especially in an industry that tends to lag behind in technology." The two biggest issues with the ASP model, according to Sellers, are the total dependency on Internet connections in the stores, and potential disparities between store- and ASP-level data. What keeps Sellers awake at night? "Ultimately, I'm no longer in control of my own destiny. What if the ASP goes down, and I can't access it or the provider? What if the vendor goes out of business? Or the contract's over, and the price is going up. How can I get all that data back? My POS is linked to my ASP now, and I can't change technology platforms-it's very solidified. What's cutting edge could become a legacy system in five years."
Letting go The American Airlines Center included an ASP implementation when the building opened in July 2001. The Center uses the ASP model for running in-house concessions, with InfoGenesis (infogenesis.com) providing the front-end POS solution and Eatec (eatec.com) providing the back-end inventory solution. As Joe Heinlein director of technology explains, being an early adopter meant "There were a lot of kinks to work out. Our biggest problem was getting inventory items from retail sales to concessions into the system."
Today, he sees the advantages in saving on equipment purchasing and maintenance: "It's nice to have them to call, and not to have to house that equipment inside the building ourselves. They can do updates without my people having to load it onto the client computers," Heilein adds.
"It's tough when you're hands on, and now basically hands off," explains Heinlein. "There is the initial shock of letting go, and allowing systems to be managed off-site. Our biggest fear was over communications between our property and the data center-that data was not being corrupted. I'd say that over the next five or ten years, even with critical systems like POS or payroll, there will be a greater comfort level."
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