Does it make good business sense to integrate across the different lines of business represented by Lifestyle Resorts and Home-Away Hotels? What exactly would you integrate (beyond financial information) and why? The key issue facing Homestyle Hotels Inc. is its two distinct lines of business, each operating in isolation and thereby putting a strain on the information collection process. Currently the chain faces wasted employee productivity, no real-time updation, increased costs and lack of consumer insights. The chain requires a more cohesive set of information to operate effectively and efficiently in the market and compete globally. “Integration may be the most cost-effective way for IT to add business value to the enterprise” (Zeichick A., 2004, p.1). The benefits of business integration are not just limited to improved customer service but extend to increased sales and a more congenial work environment. However, the most important factor to consider is to clearly specify the ‘objective’ and the ‘technical requirement’ that the project would entail in order to ensure successful integration.
Integration (like any IT project) isn’t an end in itself; it must serve to make the business more profitable, more competitive, or more efficient, and the value of that greater profitability, competitiveness, and efficiency must be reflected in the requirements and budget for any prospective integration project. (Zeichick A., 2004, p1) Financial information integration is just one cog in the wheel to delivering strategic value. The organization needs to integrate horizontally as well as vertically to achieve cost savings and greater efficiency. The following functions need to be integrated across lines of business to deliver a consistent look and feel of Homestyle Hotels Inc. 1) Operations- Currently, both divisions owing to different target groups do not have standard operating procedures.
In order to achieve the organization’s vision of competing as a global brand the operations need to be integrated across lines of business. 2) Branding/Marketing- The merger of two entities in essence means that each individual organization needs to shed its individuality and adopt a common goal. Hence, the branding and marketing should echo the group’s identity and be integrated across divisions. 3) Human resources- For a hotel industry, people are the face of the organization. As rightly pointed out by a study, “effective change management increases people’s conﬁdence in direction and outcomes, accelerates business results, and sustains the enhanced beneﬁts of change” ( PWC, 2011, p.16) 4) Quality assurance- There cannot be different benchmarks for quality for the two divisions as the end customer may turn out to be the same consumer. Quality assurance needs to be integrated to reap the benefits of the merger and break away from the ‘fiefdom’ style of working. Currently, each hotel is individually managing all aspects of data and is insulated from the overall profitability/loss of the organization.
Integration of various functions would on one hand ensure interdependency and on the other hand help individual hotel managers focus on their core competencies as illustrated below: Maybe better business processes require connected applications, or diverse data must be kept in sync, or perhaps really understanding customers requires creating a data warehouse. Whatever the problem, application and data integration are frequently part of the solution, and they can provide real business value (Chappell D., 2009, p 12) Outline a process for Homestyle to follow in order to decide between the two software options (i.e., HC and CR)? What selection criteria would you use? Who should make the decision? First and foremost there should be absolute clarity in what the organization intends to achieve and whether the software is helping in moving closer to the goal. As rightly said, “The worlds of business and IT have traditionally been isolated from each other, leading to misaligned and sometimes conflicting strategies” (McKeen and Smith, 2013). Hence, the goal of the organization should be clearly outlined so as to ensure that the application is serving an actual business need.
Thereafter, the application should be evaluated against each of the following mentioned criteria to finally arrive at a result: 1) Vendor credibility – It is important to do ample background research to ensure that the chosen vendor enjoys customer confidence. 2) Software reliability- Given that Homestyle Hotels Inc is one of the larger chains in North America, it provides absolute no scope for downtime or technical glitches. Hence a thorough research into the application’s performance should be a consideration while making the choice 3) Integration- This is the most crucial part of the exercise. Operational integration is the crux of the success of the entire project. The software should completely be aligned towards the organization’s goals and gel into its existing way of working. 4) Support Model- What if the application were to stop working one day. Are the employees competent to handle the process till the issue gets resolved? The support systems need to be extremely robust for an organization of this stature. 5) Scalability- With expanding operations and increase in complicated transactions, the software would need to upgrade at some time.
The selection criteria should also focus on the ease with which the application can be upgraded and the costs involved thereof. 6) Return on Investment- Last but not the least, the entire investment in the software needs to yield profit for the organization. However, the metrics used to measure the ROI (capital expenditure, time, etc.) need to be finalized and taken into consideration while confirming the choice. The top management should be authorized to make the decision with a buy in from the divisions. The reasons are plenty. Firstly, if individual hotel owners were to be allowed to make a decision, it would be impossible to arrive at a consensus. Secondly, the entire exercise aims to project a consistent image of the organization which is possible only if the rein to control is in one hand. Also, the top management has a better understanding of the organization’s vision and hence would be better placed to evaluate as to which application aligns itself to the long term view. Conclusion
The case-study in a way does provide a hint as to which software should be preferred. If the initial hiring reasons for Ben Garrett are to be taken as the company’s vision viz. to “rejuvenate and consolidate the firm’s IT –so senior management would have better control over branding, marketing, and operations and, hence, make the chain more profitable” (McKeen and Smith, 2013) then Clear Reservations is the most likely candidate mostly because it caters to top management’s need. In the end, the real decision criteria boils down to need for control, profile of end users and the frequency of information collection and analysis.
Chappell D. (2009). “Creating Business Value through Integration”. Retrieved July 20,2013 from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CEkQFjAA&url=http%3A%2F%2Fdownload.microsoft.com%2Fdownload%2F5%2F1%2FE%2F51E1E21A-93CB-4B60-8733-B4584B689902%2FWhitepaper_Business_Value_of_Integration.pdf&ei=w7X2UfLHEe254AOcwYCYAg&usg=AFQjCNE85IXUXoewufe6_YpxDv5f3GAHIw&sig2=K4Z0dleor3S1t8MpsL7u-A Mckeen, J.,Smith, H. (2013) Developing IT Strategy for Business Value. In Kursh, S., Lant, T., Majeske, K., Oliver, J., & Plant, R. (Eds.), IST 7100 IT policy and strategy Wilmington University (p271-281). United States: Pearson Learning Solutions Mckeen, J.,Smith, H. (2013) Information Management at Homestyle Hotels. In Kursh, S., Lant, T., Majeske, K., Oliver, J., & Plant, R. (Eds.), IST 7100 IT policy and strategy Wilmington University (p225-227). United States: Pearson Learning Solutions PricewaterhouseCoopers ( 2011). “People integration: Capturing M&A value by making the most of human capital post deal”. Retrieved July 21, 2013 from http://www.pwc.com/en_US/us/transaction-services/mergers-acquisitions/assets/pwc-people-integration.pdf Zeichick A. (2004). “The Business Benefits of Integration”. Retrieved July 20, 2013 from http://www.attachmate.com/nr/rdonlyres/7cfac49d-8218-4784-9cfa-73ad8ca721c5/0