Purchase Strategy

A clinical approach

Ravish Jhala, systems manager, Trident, Bandra Kurla in Mumbai, says that the selection of the right technology and its implementation needs to be done clinically. By Sanjeev Bhar

The situation is competitive in case of IT products, feels Ravish Jhala, systems manager, Trident, Bandra Kurla, Mumbai. "There are many products available in the market today and stringent care needs to be taken before making any purchase decision - requirement (focus on internal deployed resources and right choices), product evaluation (selection of technologies - compatibility, stability, warranty of products, one time cost and recurring cost, energy saving or green products, life cycle), vendor selection, cost comparison (minimum three vendors should be evaluated in terms of technology, service and support skill set and best price) and service level agreement (for high uptime, speedy response and resolution to internal and external customers)," he says. According to him, the vendor selection process is one of the most important tasks, as future service and support responsibility depends on vendor and to meet the internal Service Level Agreements (SLAs).

The implementation needs

It is evident that hotels are becoming pro information technology. "There are hotels who have already adopted latest technology and automation architecture for business. Hotels have implemented technology by keeping in mind guest demands and to create the 'wow' factor. Hotels are moving towards IT and thinking in different ways to be on top," Jhala says. Some of the notable technologies that are finding relevance in modern hotels are RFID door lock systems, PDAs (for check-in, restaurants), kitchen display system, green mantra (consolidation and centralisation, virtualisation and energy conservation systems), unified and converged solution (IP phones in rooms, iPhone in guest rooms, digital phones, IP cameras, building management systems interfacing with telecommunication infrastructure and managing it from wireless phone, Blackberry devices interfacing with hotel applications), interactive television and IP TV and digital signage.

But selecting the right technology and its implementation needs to be clinical. Jhala says, "We need to understand business, requirement of each department, processes followed by each department and what it takes to change the process in more efficient way." The decision of any new software or hardware depends on the end-user. For example, Jhala has designed processes/workflows in the past and converted multiple manual processes to auto and systems generated. "To design or make new system driven process, the end user department plays a vital role. The important aspect is that after the implementation of systems, they should be used 100 per cent. This needs to be kept in mind before going in for a system or process selection. At present, I am doing research on security-related products, understanding the process of security as to how IT can make a difference to make it simple and secure with anywhere, anytime access."

Internal role

The purchase decision making process for a hotel is complex. For example in IT, Jhala informs, the main role of a CIO is to provide appropriate user friendly, robust, cost-effective technology to enhance productivity, reduce cost and increase quality or compress process lead time of any process. "CIOs request for financial information from vendors to gauge the vendor's intent of being transparent. This would help them when buying a proprietary product. No CIO would sign a deal with a vendor, pay half the amount for the product and find him shutting shop after a few months," Jhala notes. Depending on the criticality of the solution, they arrive at a final list of vendors that need to be called for the selection process. They play a role of decision making with rollout plan of technology, he says.

There is a big list of specification that defines a good vendor. While the purchasing department is one that finally negotiates with all vendors, it is said that the right thing, at the right time at the right price determines the success of the purchasing department. Jhala says, "The selection process does not always follow the same path and is not always applied in the same way because circumstances differ and products required also differ. Purchasing policies of an organisation is also influenced by the process of selecting a specific vendor. These guidelines enable the purchasing department to make decisions more easily and also give direction to their actions."

Before looking at the criteria for vendor selection, there are a set of common characteristics that would define a good vendor: a sense of commitment, reputation, honours promises, reacts promptly with services, initiates with suggestion for better methods or services driving cost cutting and raise warning in good times as well. "Implementing a flexible and repeatable model for evaluations will give all stakeholder groups comfort that the evaluation was fair and complete, which will give the resulting projects the legitimacy they need to succeed," adds Jhala. Trident does a thorough research to identify the viability of any new product or service.

Before the hotel goes ahead of implementing any products, clear documentation of policy and process are finalised to avoid any communication gap. Most of the time it is seen that products or services are implemented before a team starts formulating its policy, which is meaningless, according to Jhala. He says, "We try to do it the other way round. If we plan to implement new products, we discuss and formulate the process and policy document and circulate to all concerns. We train the respective department on product as per policy and process formulated, run trail for department and launch the final version of product or services for end-users."

In case of IT in particular, the aspect of on/off site service holds key. "A hotel will always need both form service that are prompt and supports external and internal guest. In my knowledge we need onsite team to manage day to day routing calls of machine, desktops, printers, network; data center management like servers, storage, interfaces, backbone network, telecommunication infrastructure; and first level application support and vendor coordination - in case of additional vendor support like PMS, POS, Wi-Fi, RMS, back-office accounting system, sales and catering system and so on, which is premium," says Jhata.

He believes the trend is changing with hotels moving towards centralised service model, shared service model, remote management support, hosting model, etc and manipulating cost between the levels of service as per business criticality. "In my opinion all soft skills job can be managed by offsite team and all critical support need to be covered under onsite support. For onsite and offsite, space requirement remain the same. If you do offsite storage you pay premium because vendors charge rack space of device which is always higher," he explains. While supervision in off site case is higher compared to onsite ones, they have invented in high end monitoring tools, SLAs with vendor in place, etc.

Addressing a good relationship with the vendor is another key concern. Jhala says, "A good working relationship benefits both. It could be followed by sharing a true relation where we put our priorities with the vendor clearly within the competitive environment conditions." According to him, vendors should be partners off the paper. "There is a real need to drive contract terms and legal conditions, but in the end, no contract in the world will adequately cover your long-term goals and expectations. Hence, building a solid collaborative partnership with your vendors pays off in the long run," he adds.

The ongoing responsibilities should be shared and from the very outset, clear terms and conditions should be respected. Jhala says, "We respect our vendors and are clear about our intention of giving them business. Time commitment should be respected at any cost. Also, it is better to negotiate with the top two in the core segment. After evaluating a number of vendors, we conduct contract negotiations with the final two, not just the final one. That enhances competition, and you may discover a deal-breaker with the top choice."

Future outlook

According to Jhala, in terms of distribution of IT by business functions, business specific IT solutions in hotels accounts high nowadays. "In the last few years, all business verticals have spent a major chunk of their budget in streamlining business processes, ERP, changing blinding edge technology with more efficient and power technologies," he says.

IT services are one of the major chunks of budget where FMS (Facility Management Services) has increased in past years to increase response and resolution time among end users. He says that according to the Gartner Executive CIO survey, of the 444 CIOs surveyed around the world, 48 per cent are projecting an IT budget increase in 2009. However, 52 per cent of CIOs are reporting flat or IT budget decreases in 2009. On a weighted basis and considering all 444 IT organisations, 2009 IT budgets are set to increase 3.36 per cent.

Trident's IT set-up is different from other hotels. "We have planned each and every area, keeping in mind low space, cooling, power and taking one step towards green IT. We have implemented RFID door lock systems from VingCard for our rooms, visitor management desk for keeping track of visitors, Go Concierge application for concierge desk, digital signage system, etc," he shares. The hotel is working on processes and very soon will start designing in-house application and convert manual processes into auto and systems-driven process that will save manpower time, increase efficiency, offer more control on processes and save costs.