MANAGEMENT OF INFORMATION SYSTEMS MGMT8620

Individual Assignment – Case Study & Case Analysis

OUTRIGGERHOTELS

ANDRESORTS

(CASE STUDY)

HUSSAIN ALAIDAROUS

20404431

CONTENTS

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INTRODUCTION.........................................................................................................................................3

Overview and background of case study:.............................................................................................3

2 THE RELEVENT ISSUES.............................................................................................................................4

3 INFORMATION SYSTEM CONCEPT IN OUTRIGGER HOTELS:....................................................................4

4 THE STRATEGIC BUSINESS PLANNING:....................................................................................................................5

Geographic locations:..........................................................................................................................6

External expansion:.........................................................................................................................................................6

5 ADDING VALUE AND COMPETITIVE ADVANTAGE:..............................................................................................7

Online travel agents:.......................................................................................................................................................7

Website:.............................................................................................................................................8

6 THE STRATEGIC IMPACT GRID.................................................................................................................9

7 RECMMENDATIONS..........................................................................................................................................................11

8-9 CONCLUSION AND REFERENCES.......................................................................................................12

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1 INTRODUCTION:

Overview and background of case study:

Outrigger Hotels and Resorts is a private family firm which was owned by Roy Kelly

located in Hawaii since 1963. Throughout the next 60 years of experience Outrigger’s firm has

become one of the largest companies in the hospitality segment in Asia Pacific and Oceania

regions. It applies distinct services of hotels, condominiums and vacation resorts properties, and

it has grown fast and successfully to form series of hotels and resorts including Outrigger Hotels

and Resorts OHANA Hotels & Resorts, Outrigger Condominium Collection, Embassy Suites,

Best Western and Wyndham Vacation Ownership. By that time the firm was still centralized in

Hawaiian Islands with more than 30 locations, after a while, in 1996 the first international foray

was opened in Marshall Islands then new international properties were added in Australia,

Guam, Fiji, Tahiti and New eland with total of 47 locations and 12 thousand rooms in all

Outrigger firm’s properties.

During the time of expanding geographically the organization was adaptable with the marketing

improvement by adding good new values such as new brands with diversity services , new

accommodation types in terms of customer’s needs, and using different strategic marketing

methods and so on. For example, adding new brands in some nations such as OHANA Hotels of

Hawaii which meet some consumer needs in terms of the value and price.

Outrigger Enterprises Group also operated and developed hotel properties and hospitality-related

retail and real estate opportunities for partners in Hawaii, Pacific, mainland USA and Asia.

Outrigger Enterprises Group relies on outsourcing strategy.

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2 THE RELEVENT ISSUES:

In this case there are some issues that we would to discuss and interpret. Outrigger’s firm faced

some challenges through its way to the success. The strategic Information system planning

process is the first issue, when the firm has to make important decision about selecting the

locations and expand the regions they had to analyse and plan the strategy. Competitors in the

hotel and resorts industry is another issue that the firm should indicated by adding new values to

make a barrier for competitors. The last issue is IT infrastructure and how the firm transacting

with the integration between IS and IT. In next sections we will indicate each issue with some

interpretations and analysis. But before that, I would like to clarify the concept of information

systems in the firm and how that has affected its performance.

3 INFORMATION SYSTEM CONCEPT IN OUTRIGGER HOTELS:

Outrigger Hotels and Resorts had clearly implemented information systems’ roles in its

strategy and planning and it is considered as a positive example of implementing

information system. In general, when we look to the work system of Outrigger’s

organization we find that the technical and social subsystems were applied in the firm

fairly clear. In terms of technical subsystem Outrigger’s firm had strong IT basis which

can be developed periodically and integrated with new hardware and software

technologies any time depending on the IT and IS strategy. IT component played an

important role to achieve the firm’s strategy whether in internal or external environment.

Outrigger’s firm used IT as a competitive advantage through developing the IT

infrastructure and using electronic commerce strategy through third party owners or

through its website. Also Outrigger’s firm had clear processing systems such as the

centralized data center which facilitate transforming information between various

branches within the organization. It was depending on the centralization strategy from the

point of view of process perspective in many departments. In terms of social subsystem

the structure of the firm in terms of hierarchical perspective was “a highly centralized

organizational structure”, (Piccoli 2008), and it contained experts in different fields.

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Moreover, employees had a good workplace environment; they were trusted to do the

tasks and they are respectful toward each others. Kimberly Ages explained the condition

“every one has a narrow job [description] and outside of that they will refer you to a

colleague. Out of respect, because of contract restrictions or because that’s how they look

at it: “this is I have to do” structure” (Piccoli 2008).

From these four components we came up with that Outrigger’s organization had worked

interdependently on the work system putting on its eye the IS as an entire concept not a

part concept which is called systemic system. However, IT strategy had been taken the

largest part of thought and the development in Outrigger’s firm for some reasons. First,

although the hospitality industry is depending on the quality and the service, IT plays a

crucial role to applying them. Outrigger put IT infrastructure as corner stone of its

strategy by initiation new systems that lead to centralize and integrate all systems

together such as Stellex, E.piphany and JD Edward. Second reason, to meeting

customer’s needs and IT competitive advantages, IT have capability to do it.

4 THE STRATEGIC BUSINESS PLANNING:

The strategy of Outrigger was very clear; it “…was a drive to position its properties in

places where people could enjoy a vacation experience leveraging Outrigger’s own core

competencies.”, and “…original mission was to bring the opportunity for a vacation in

paradise within the reach of middle-class families.” (Piccoli 2008) To implement and

achieve this strategy and the mission, Outrigger’s firm made some important decisions.

Geographic locations:

Selecting the geographic property was crucial decision, so Outrigger’s hotels and resorts

centralized only on the prosperities which are on beaches in Hawaii. Moreover,

Outrigger’s firm did not expand internationally during 25 years tell it rooted its business

in Hawaii. It had a priority to renovate the hotels in Waikiki which cost 315 million

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dollars rather than expansion their business globally even though they have a strategy to

growth. This is decision indicates a part of the strategic information systems planning

process which is the strategic business planning. The firm understood deeply who they

are what their ability is, how they achieve their goals and what are their opportunities

currently and in the future. They initiated this strategy depending on the given analysis

and information that is people tends to spend their holiday on the beach with reasonable

price and acceptable services. Therefore, the company has diversified in the way of

services depending on customer’s demand.

External expansion:

Another important decision was the expansion to international hotels. The decision was

founded on customer’s vision as the CEO of Outrigger Enterprises stated “Given our key

competencies, expanding to Guam, the pacific, and Australia was a source- customer or

distribution – driven growth strategy. It leveraged both markets where the customers

know us because they had experienced our hotels before and…”, (Piccoli 2008). The

decision was successful for the firm in term of marketing strategy and good reputation.

However, in terms of information system implementation there was a problem with

decentralization of the system. The international branches were working individually

with their own information system and IT infrastructure which make some difficulties to

integrate the organization’s system and collect the data from each branch. In contrast of

local hotels which had an efficient high centralize system integrate all the departments of

the firm.

In fact, at this point the company should understand the dimensions of the adoption of

this resolution from technical resources perspective. Does IT have the ability to solve the

problem of distance between the branches and what is the solution?

Is there an impact on the company's performance in the case of a decentralized system?

Answering these questions will diminish the negative impact of the decision.

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5 ADDING VALUE AND COMPETITIVE ADVANTAGE:

Even though Outrigger’s firm is one of the successful operator companies in Hawaii, it

has a number of competitors such as ASTON Hotels and Marc Resorts which have a

number of prosperities and high level of services. This strong competition the firm should

pay attention to it, and it has already done so. Outrigger’s organization attempted to

create new marketing and technological value which make an IT dependent competitive

advantage and a barrier against its competitors.

Online travel agents:

Outrigger’s firm in its marketing strategy attempted to add value by outsourcing

partnership. This value was creating an online channel through Third Party Companies

applying dynamic packages service which means more fixable and multiple choices in

prices and services. The questions are does Outrigger’s firm need this type of service?

Why Outrigger’s applied this value through the outsourcing although it has its own IT

team that could be able to initiate this value? In response, adding value is a requirement

to be in the competitive advantages. It is easier for the customer to realize which hotel is

cheaper and which one has good services, this method makes it easier for the customer to

communicate with all companies instead of using the telephone or email with each. Thus,

this is an opportunity for the firm to appear the advantages and to be sustained in the

competition. Also, in Expedia website; for example, the customer can read the reviews

through the hotel’s guests, so the reviews may reflect on the hotel’s services and its

candor. Outsourcing Third Party Company’s contract needs to expend money and applies

package of advantages to the supplier and customers, and the firm will gain a good

profitability with less effort and cost. Even though the firm has its own IT team which

can apply this initiative, the strategic information system planning prefers to delegate

outsourcing in the competitive external environment in order to executing IT team to

work on the internal information technology which is more important from the IS vision.

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Website:

However, what is the benefit for Outrigger’s firm to have its own website since it has a

contract with Third Party Company? And the debate here is whether the firm should

spend money to build website or not. In fact, Add this value does not have any

investment and it is not the core business but it could cost more. Nevertheless, the

website is considered the main gate of the company from which the customer can identify

the company and the services from near, and it could be provided by some images,

activities, classes, locations and contact numbers and so on. The decision of initiate

website is information system decision not information technology, so the IS strategy

could set this value as a competitive advantage to frame a barrier for competitors.

Even though the firm has strong added value and competitive advantage, it should be

aware about its competitors to save their money. It will not be fully productive when they

concentrate on “service delivery”, (Piccoli 2008) regardless their competitor’s

circumstances. They could lose money on applying service that customers can find it

easier and cheaper in other hotels, or they could applying technology that their

competitors have already upgrade it or substituted by new technology

6 THE STRATEGVIC IMPACT GRID:

Information Technology played a major role in decision-making in the firm. It is clear

from the case study that IT infrastructure was evolved gradually to contribute to fulfill the

goal of IS strategy. The date is collected by Stellex then it is transferred to JD Edward

system for accounting then to E.piphany for analysis and forecasting. . In this section we

will analyze the IT infrastructure by using the strategic impact grid and it was working in

the strategy. From the analysis of strategic impact grid we find that Outrigger’s

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organization is guided by IS and it has used all quadrants effectively as shown in the

figure below. Unlike small hotels who don’t need to use all these quadrants.

- Support Quadrant:

The firm needed to build its IT infrastructure and that decision was from high level

managers. Thus Durocher was the VP of IT who brought Stellex system as the first IS

system at the firm. This was an important decision which supports the role of IS

functionality. Stellex is used as tools to support the administrative operations, these tools

such as room, revenue and block management, reservations for end users tools and the

reservations, availability and pricing for In Information System layers. Outrigger’s

considered this system and upgraded it several times to integrate it with other

applications and to centralize the system with international hotels in order to cutting

price. Therefore, Outrigger’s firms applied the purpose of support quadrant which is

using “IS a tool to support enables operations” (Piccoli 2008).

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Low

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Hig

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For

Rel

iabl

e IS

Low TO

H

igh

For N

ews IS

- Factory Quadrant:

As an example of this quadrant Outrigger’s firm implement JD Edwards to perform

some important functions such as accounting, payroll and human resources whether

for end users or information manager layouts. In this quadrant the firm attempted to

use electronic interface instead of fax machine to organize and improve those

functions to be more effective and efficient.

- Turnaround Quadrant:

The organization had to upgrade and initiate IT infrastructure when it found that is

necessarily. It has hired Durocher to establish the IS which was an important decision for

the organization. Then IS team has developed the systems by planning to be implemented

effectively. For example, the training of employee which is necessarily to inform how

can they deal with new technologies. The method of training was old employees train

new employees in the framework area. This strategy could be appropriate for the firm

because they upgrade and develop the system periodically. However, it could affect the

performance of the firm because employees are engaged in this program while they do

their job, so this will be duplicated.

- Strategic Quadrant:

Outrigger’s Organization applies IT infrastructure as a strategic component to fulfill

its operations, unlike small hotels who could use IT infrastructure as a support

component. Thus, Outrigger’s firm uses E.piphany system for several intelligent

strategic purposes, this system able to “do forecasts and generate business indolence

both at the source of business and at guest levels” (Piccoli 2008). E.piphany was a

power for the IS strategy, it can be used for communicating with customers to

acknowledge the special customers, giving the visiting history of the guests which is

really important to realize the return guests rate; also, E.piphany can be accessed by a

web interface for marketing and operational analysis. From E.piphany functions we

can say that “information systems are part of the firm’s DNA”, (Piccoli 2008).

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7 RECMMENDATIONS:

After I analyzed the case I would to set some recommendations for Outrigger’s

organizations. First, since IT strategy has received much money in the organizations, it

could be a disadvantage if the firm did not control this expansion. They should be aware

how much they spend on IT and should realize if the new technology will add value for

the firm or not. Second, I believe the methodology of the training was not accurate, so a

big firm like Outrigger Hotels should set a training part in the human resource department

to be a center for many useful courses not only for IT sector but for improving staff’s

skills in general or for any other purposes. A last recommendation is using the website

more effective. They can shift the site to point of communication between staff and

clients as well by using applications such as E-mail for staff, and opening a window to

connect with customers in writing or audio way.

A further idea can be done is a special application of computers and mobile phones such

as Apple and where it can be IT investment of the company.

8 CONCLUSION:

In conclusion, Outrigger’s organization can be applied as a positive example for the

companies in the hospitality segment. It has high implementation for IS strategy and high

quality to integrate and active the systems between people and IT strategy and structure,

make smooth changes by using automate, informate and transform orders and it was

evaluating the. In addition, it used strategic information system planning to evaluate and

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implement its information system; also, it exploited its IT infrastructure to create a

sustainable competitive advantages and added values.

9 REFERENCE:

- Gabriele, P 2008, INFORMATION SYSTEMS FOR MANAGERS TEXTS & CASES, 1st edn, John Wiley & Sons, INC.

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