Procurement Hotel Association of Canada 2004 Annual ... · Survey Summary ... Toronto, Niagara...

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© 2004 hyphen Information Systems Management Proprietary Confidential Documentation, not for distribution without written authorization

Hotel Association of Canada

2004

Annual Technology Survey

Consultation Management Procurement Installation Training Help Desk

Our creative expertise with information systems gives our clients the freedom and clarity to focus on the success of their core business


Table of Contents

Introduction……………………………………………………………………………….……3

Survey Summary………………………………………………………………….………..4 Survey Results………………………………………………………………………………..9 Property \ Site Overview………………………………………………………9 Personal Perspective on Technology……………………………………10 Property \ Site Analysis……………………………………………………….12 Telecommunications…………………………………………………………….14 Emerging Technology………………………………………………………....16 Technology Resources & Support…………………....................17 Technology Strategy & Budgeting...................................19 Electronic Distribution & eMarketing……………………..............22 Canadian Content…………………………………………………….……………28

hyphen Articles……………………………………………………………………………....29 Keeping up with the Joneses……………………………………….……….29 Outsourcing – A Growing Phenomenon……………………………….30 Averting a Technology Purchasing Disaster…………………………31 What Guest Really Want – The Power of CRM…………………….34 The Jargon Zone – Interpreting IT Language……………………..37



2004 Canadian Hotel Technology Survey Recently the Hotel Association of Canada (HAC) commissioned hyphen Information Systems Management to conduct a comprehensive survey on the state of technology in Canada’s hotel industry. The data was compiled via an on-line survey by hotel industry representatives across Canada. The purpose of the survey is quite simple, knowledge sharing. The technology survey is a looking glass, the information from which you can use to make day to day and strategic decision in your hotels.

State of the Canadian Hotel Industry

According to Tony Pollard, President of the Hotel Association of Canada; Typically the hotel industry in Canada does follow that in the United States. This is purely from an economic reality. Our two economies are very closely intertwined. 87 per cent of what we produce in Canada goes to the United States. We export over 460 billion dollars of goods annually. The fact that the U.S. economy will show GDP growth of 4 % plus this year is a good sign for the Canadian industry. We do not mirror the U.S. but it is quite close. Toronto will recover from SARS in the third quarter of this year. The impact was felt right across Canada with losses in Toronto greater than 560 million dollars and the total for Montreal, Ottawa, Toronto, Niagara Falls, Calgary and Vancouver exceeding 1.07 billion dollars up to the end of last year. Remember SARS was only in Toronto and it impacted all the country. Only Niagara Falls will wait until next year to recover

Survey Methodology & Summary Responses

Participants completed this 64 question survey on-line and were asked simple yes/no, multiple choice-single response, multiple choice-multiple response, and free form questions.


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Survey Summary

Spending remains on a tight leash, 59% of all respondents answered that their 2004 technology budgets would be at the same level or below that of 2003, while just over a quarter of all respondents stated they had no 2004 technology budget. Three out of four respondents with a technology budget are targeting their spending in the areas of Hardware 63%, Property Management Systems 26%, and high speed internet access 12%. The high percentage dedicated to hardware is not surprising as the last time most Hoteliers spent any significant dollars on hardware was during Y2K remediation. Also contributing is the very competitive pricing of hardware e.g. PC’s, file servers, switches etc. 26% of the respondents stated upgrading and\or replacing their property management system as their highest priority, while 12% of you continue to embrace high speed internet access and wireless high speed internet access (Wi-Fi) as their most important expenditure for 2004. When asked what they would choose if they were given $100,000 to spend on any one technology project, 35% of hoteliers said they would conduct a comprehensive audit of all their systems and then decide what course of action to take next. This statistic further illustrates the pragmatic approach hoteliers are taking towards IT spending and the desire to fully justify each line item cost. Another 25% of respondents said they would spend the money on a new property management system while 8% said they would spend their money making disparate technologies interface with each other, thereby streamlining operations on all levels. Property \ Site Overview Survey sample was comprised of Canadian Hoteliers, 76% of which work directly at the property level in areas such as Finance, Information Technology or are have a role in executive management with 24% located in corporate and\or franchise offices. Thirty seven percent describe themselves as independent with no franchise or brand affiliation. Personal Perspective on Technology The issue of disparate technologies was raised again when asked what three things frustrate you most about technology. Respondents ranked the following as their top three frustrations: 1. New technology does not interface well with existing technology, 2. Heightened expectations due to assumed efficiencies, 3. Cost too much because it becomes obsolete too quickly.


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On the other end of the spectrum, when asked what they felt were the top three real benefits of technology respondents ranked 1. Assists with better inventory management (rooms, fixed assets, food & beverage and consumables), 2. Better analysis and forecasting, 3. Collection of guest history / demographics. When asked what are the three most important technologies in your operation today, 33% said their property management system, tied for second was point of sale system & high speed internet access at 13% and email at 10%. (This question was a free form question that generated over 25 separate responses). It is evident that the property management system remains the most important piece of technology in hotels today. It acts as the central repository and/or throughway for all guest information and financial transactions. Property \ Site Analysis When looking at the actual technology that resides within the hotel itself across the board all properties posses the major systems one would expect i.e. PMS, POS, PBX etc. Where we have less consensus is with yield\revenue management systems (43%) and customer relationship management systems (39%). Recently both topics have been mentioned in countless trade publications and focused on heavily during industry meetings and trade shows. The compliance percentage is a reflection of several factors:

- The high cost to implement a Revenue Management or CRM system - Skepticism on the CRM (technology) system’s ROI. - Perceived difficulty of installing a Revenue Management System.

Given all the disparate technology that resides in a typical hotel, interfacing and or interoperability is still an issue. 45 % of respondents have technology today that does not interface to the correct system. A further endorsement to the need for industry standardization and the on going efforts to accomplish this through the Hotel Technology Next Generation initiative (www.htng.org). Telecommunications The topic of high speed internet access is still on the mind of most hoteliers but what to charge guests for that service is varied. 26% of respondents charge less than $10 per day, 24% charge guests between $10 and $15 per day while notably, 33% of the respondents offer this service for free. Over time, guests build expectations as to what they believe they should receive as a basic amenity for the price of accommodation and free high


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speed internet access may become a defacto industry standard, however as hoteliers attempt to recoup initial capital investment or the benefit from a long term agreement with their high speed internet access vendor, it is evident that our industry will hold out as long as possible. A future indicator of where the industry may go with respect to charging guests for high speed internet access is to look at telephone revenue. 39% of hoteliers still charge guests for local telephone calls while 52% still charge guests for 800 and credit card calls. In the final analysis, with slim profit margins, it is difficult for any hotelier to turn the facet off of any revenue stream Emerging Technology The idea of check in \ check out kiosks although not really emerging technology, still has yet to capture the minds of hoteliers, reflected by only 2% or respondents who do possess kiosks. If a kiosk is located within a hotel, most likely it serves as either an information kiosk (sponsored by advertisers) or an internet kiosk (revenue sharing). Kiosks will be remaining on the horizon as the proliferation of its use in airports will acclimatize travelers to its use in other areas. Personal Digital Assistants (PDA’s) like Palm OS and Blackberry devices have been adopted by our industry 80% use them predominately as email and schedule\time management appliances a trend that will continue unless vendors create handheld tools that hoteliers will actively seek but at price point that will not shatter their technology budget. Technology Resources & Support Although most hotels possess a great deal of technology, only 53% of respondents employ a full time resource to support their technology. 31% get technology support from their corporate office and another 26% outsource their IT support to a 3rd party. Over time, it becomes increasingly difficult to maintain the required IT knowledge in house without a full time resource. Outsourcing specialized jobs remains a hot issue as reflected by 59% of the respondents who have considered outsourcing their IT duties, a trend that will continue. Technology Strategy & Budgeting As previously mentioned, IT spending remains on a tight leash with most technology budgets remaining at 2003 levels. In relation to the hotel’s overall annual budget, 33% said that technology initiatives represent 0-1% of their total budget while another 35% responded that their IT budgets represent 2-3% of their total budget. There is no industry consensus on how

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much hotels should budget, however a minimum rule of thumb would be one half of 1 % (0.5%) of your total annual budget dedicated to technology. Any thing less would place your operating in a reactive break fix mode. Although 63% of respondents answered that their number one budget priority was hardware, PC makers should not count on a mad dash to replace desktops and servers like we did during Y2K. Ironically enough, 4 year has passed since the non-event that was Y2K and hotels will carefully begin a desktop refresh but not at the compromise of other projects. On the horizon:

• 70% surveyed will perform a major PMS upgrade within 3 years • 54% surveyed will perform a major POS upgrade within 3 years • 44% surveyed will perform a major upgrade to their central

reservation system within the next 3 years. • 64% survey will perform a major upgrade to their sales and catering

system within the next 3 years. Staying ahead of the curve can be difficult with the rapidly changing world of IT. There is no silver bullet answer to keeping hoteliers educated so they employ and consult a myriad of resources like, Corporate Office, Consultants, industry trade shows like Hitec, and personal research. Electronic Distribution & eMarketing The impact of the internet on the hotel industry is irrefutable. 93% of the respondents have their own website or have their website managed through their corporate \ franchise office. An industry movement is afoot to try and drive electronic bookings away from 3rd party travel and opaque websites and to their own websites, thus avoiding the services fees levied by these 3rd parties. 96% of these hoteliers’ websites have the ability to make room reservations and 40% of these sites offer a best rate guarantee. Expedia, Travelocity, Hotels.com, Orbitz, and Priceline are the top 3rd party and opaque website our respondents are utilizing at the moment. Consolidation among these companies happens frequently, for example hotels.com com is owned by Expedia. The cautionary note for hotels is to thoroughly investigate 3rd party websites before signing an agreement. Also determine if the company re-sells any of your rooms to another booking company. With more potential visitors to hotel websites we asked what three elements would you add to enhance your website: 1. Virtual tour was ranked the highest, followed by 2. Loyalty program enrollment and 3. Live on-line assistant.

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A simple litmus test would be to ask, if your website was the only marketing collateral you have, does the website stand on its own. Does it look and sound the way you envision. Beyond the website itself, only 52% of the surveyed have paid for links to other websites e.g. Travel sites, conference center, search engine etc, and 68% of the respondents say that they either work with a company, or their webmaster, that has worked to optimize their location in search engine. Search engine placement is important. Hoteliers should frequently verify how their sites(s) display in search engines, and equally important is to examine how your competitors display in search engines as well. Canadian Content As this is the Hotel Association of Canada Technology Survey, we wanted to ask some specific questions that covered Canadian Content. We are influenenced heavily by our neighbors south of the border. A solid majority of you (60%) feel that there are not enough vendors in the Canadian IT market place which will allow you to buy Canadian with the comfort level that you are getting the best of breed or industry leading technology. For that reason, vendors in the United States are given fair valuation with only 10% of respondents ruling out vendors in the United States because of the exchange rate, but 54% or respondents said that they would be more likely to select a US vendor if a fixed exchange rate could be negotiated. We asked respondents if they could directly influence the development, service and support of technology vendors and their products outside of Canada, what specific issues or concerns would you have them immediately address for the Canadian market place.

1. Better local support 2. Better understanding of Canadian Issues 3. Exchange Rate 4. Competitive Pricing.

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Hotel Association of Canada 2004 Technology Survey Results

© 2004 hyphen Information Systems Management Proprietary Documentation, not for distribution without written authorization

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Property \ Site Overview

1. What type of Property do you work at or represent Response Percent

Business\Leisure Hotel 53% Conference Hotel 14% Resort Hotel 10% Corporate\Franchise Office 24%

2. How is your property affiliated? Response Percent

Independent 37% Independent with Franchise Brand 24%

Managed with Franchise Brand 8% Managed with Corporate Brand 7% Owned and Managed by Corporate Brand 24%

3. How many rooms does your property of chain have? Response Percent

Under 50 2% 50-99 5% 100-299 39% 300-499 15% 500-999 7% 1000 and greater 32%

4. What is your role at the property Response Percent

Executive Management 34% Finance\Accounting 29% Operations 5% IT Management 22% Corporate \ Franchise Office 7% Other 3%

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Personal Perspective on Technology

5. What THREE things frustrate you most about technology? Response Percent

New technology doesn't interface well with existing technology 63%

Lack of hardware/software specialized for the hospitality industry 20%

It diverts attention from staff and customers 20%

Heightened expectations due to assumed efficiencies 47%

Cost too much because it becomes obsolete too quickly 44%

Bugs, crashes and breakdowns require constant maintenance and disrupts guest service

34%

Generates too much data and not enough usable information 29%

Training and Support are lacking 25%

It is not as user friendly as it should be 14%

Not enough security 10% 10



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6. What do you see as the top three real benefits of Technology Response Percent

Better inventory management (rooms, fixed assets, food, beverage, consumables) 68%

Cost savings 24% Collection of guest history / demographics 58%

Employee efficiency 20% Enhances guest service 44% Better analysis and forecasting 61%

Allows staff to spend more time with guests 8%

Less dependence on people to do the job right 5%

Payroll savings 3% Adds consistency and streamlining to operations 42%

7. What would you regard as the three most important technologies in your operation today? (It can be a specific piece of software, hardware like wireless networks, or even a technology process.

Response Percent

Property Management System 33% Point of Sale 13% High Speed Internet Access 13%

8. Does the owner of your property believe in the benefits that technology can offer? Response Percent

Yes with or without ROI 27% Yes and is willing to spend money on it providing there is a reasonable ROI 56%

Yes but only for the absolute essentials 14%

No 3%

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Property \ Site Analysis

9. Check off the following systems that you have on property: Response Percent

Telephone Switch (PBX) 96% Property Management System (PMS) 95%

Point of Sale System (POS) 93% Sales and Catering 75% Central Reservations System (or interface to one) 71%

Yield/Revenue Management System 43%

Customer Relationship Management 39%

Accounting/Back Office 89% Inventory 30% HR/Payroll 70% Time & Attendance 43% Electronic Maintenance System 25%

Electronic Door Locks 82% High Speed Internet Access for Guests 89%

Call Accounting 93% In-Room Entertainment / Movies 86%

In Room Video Games 70% Electronic Mini-Bars 16% Other: Executive Reporting, menu costing, golf, spa, N/A 18%

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10. Check off the following systems that you have for your staff at your property? Response Percent

Outlook or some other personal information manager 86%

Internet Access for staff 89% Email System for staff 98% Instant Messaging System for staff 20%

PDA - Personal Digital Assistant (Palm or CE type device) 29%

Blackberry 13% Mobile Phone 82% Pager 59% 11. Do you have system that are not presently integrated or interfaced with your property management system that you wish to have integrated?

Response Percent

No 55% If Yes, which systems. 45%

12. Is your current PMS setup with an Application Service Provider (ASP) and\or other similar hosted service, where the data and program is on a server (off-site) with only a browser at the client\end user?

Response Percent

Yes 15% No 85%

13. Do you feel that the technology behind hosted or ASP property management systems is stable enough for you to consider for your next generation PMS?

Response Percent

Yes 45% No 42% What’s and ASP? 13% 13



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Telecommunications

14. Do you charge guests for local phone calls? Response Percent

Yes 62% No 38%

15. How do you charge guest for long distance calls? Response Percent

Same billing rate as my long distance carrier. 7%

Flat rate on top of the long distance carrier rates. 5%

% Increase on top of the long distance carrier rates. 75%

Other: (Various) Flat rate, Flat rate + % increase, Telco rate + flat charge + %, flat rate + % markup.

13%

16. Do you charge guests for 800 and credit card calls? Response Percent

Yes 51% No 49%

17. How much has you guest telephone revenue decreased over the last 12 months, irrespective of occupancy?

Response Percent

Very Significantly (more than 30%) 17%

Significantly (between 15%-30%) 33%

Slightly (between 5%-15%) 31% Not at all 19% 14



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18. Do you have an analog data/modem jack in guest rooms? Response Percent

No 7% Yes - Shared phone line with extra jack built into the phone. 41%

Yes - Shared phone line with extra jack on the desk lamp. 20%

Yes - Dedicated phone line with extra jack on the desk lamp. 15%

Other: (Various) Two-Lines combinations 17%

19. Do you offer high-speed internet access for guests? Response Percent

Guest Rooms 81% Meeting Rooms 80% Business Centre 65% Not available at this time. 0% Other: (Various) Public Areas only, Will install within next 3 months, Avail in 30% of our guest rooms.

9%

20. Do you offer wireless (Wi-Fi) internet access? Response Percent

Guest Rooms 20% Meeting Rooms 43% Business Centre 20% No 33% Other: Public Areas\Lobby\Restaurant 35%

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21. How much do you charge for high speed internet access? Response Percent

Less than $10 per day 28% $10-$15 per day 26% $ 15-$20 per day 4% $ 20 and over 6% No charge to guest 36%

22. Approximately how many guests use high speed internet access as a percentage of rooms occupied?

Response Percent

0-5% 33% 5-10% 24% 10-15% 14% 15-25% 10% 25-50% 16% Over 50% 4%

Emerging Technology

23. Do you have self check in/check out kiosks in your lobby. Response Percent

Yes 2% No 98%

24. Do you have the ability for guest to check in/check out via the internet? Response Percent

Yes 4% No 96% 16



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25. Do you use Personal Digital Assistants (PDA’s) on your property for the following? (Yes\No)

Response Percent

Check-in/Check-out Guests 4% Restaurant Point of Sale 4% Housekeeping Tasks 6% Engineering Tasks 9% None 80% Other: Hotel Admin use 9%

Technology Resources & Support

26. Which item (s) below best represents how your technology is supported? Response Percent

Full-time employee specifically for IT duties 53%

Part-time employee specifically for IT duties 2%

A manager from another department that has IT duties 18%

An employee from Corporate that looks over the property IT 31%

An outside resource that is contracted to look over the property IT 26%

27. Is your Information Technology Manager a department head or part of the Executive Committee?

Response Percent

Yes 59% No 41% 17



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28. If your IT Manager is part-time (i.e. Employee, corporate shared resource or external resource), how many hours a week does he/she spend on IT duties?

Response Percent

0-5 hours 10% 5-10 hours 15% 10-15 hours 8% 15-20 hours 6% 20-30 hours 4% 30 plus hours 4% Not part time 53%

29. If you do not outsource your IT duties, have you ever considered doing so? Response Percent

Yes 59% No 41%

30. If your guest have internet connection problems, whom do they get directed to? Response Percent

Technology Concierge 6% Front Office/Guest Services 31% Engineering 2% Hotel IT Department 10% Internet Access Vendor 29% Corporate IT Department 12% Outside Resource 4% Other: Corporate Help Desk 6% 18



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Technology Strategy & Budgeting

31. If you had $100,000 to spend on any one technology project, what would you choose to do?

Response Percent

Audit my existing systems so I can decide what to do next 35%

Interactive Sales and Marketing such as hotel web site, CD-ROM’s, e-newsletter 4%

Install Wireless High Speed Internet Access for guests 6%

Remote Check-in / Check-out via the internet 0%

Promoting Electronic Sales Channels 4%

Purchase a new Property Management System 24%

Enabling PDA’s for use by the Front Desk, Restaurants, and Housekeeping 2%

Purchase a new Central Reservation System 2%

Better integrate your existing systems 15%

Other: (Various) Training, Data warehouse, I would not spent it on technology. 8%

32. In 2004 does your hotel have an approved technology spending budget specifically allocated for the purchase of new technology?

Response Percent

The technology budget is very minimal, except what I can charge on my personal credit card

4%

The technology budget is at the same level or very close to the 2003 budget 49%

The technology budget is very generous and has been increased over 2003 10%

The 2004 technology budget has been decreased over 2003 6%

No 27% Other: Still pending approval 4% 19



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33. What is your approximate yearly technology budget including technology, support and staff as a percentage of the total property budget?

Response Percent

0-1% 33% 2-3% 35% 3-5% 16% 5-10% 8% 10-15% 6% 15-20% 0% Above 20% 2%

34. What are the top 3 items you will be spending your technology dollars in 2004? Response Percent

1. Hardware 86% 2. PMS 76% 3. High Speed Internet Access (Wired & Wireless) 69%

35. When do you plan to change or perform a major upgrade on your Property Management System?

Response Percent

0-1 years 35% 2-3 years 35% 3-4 years 6% 5 years or greater 14% Other: (Various), Just completed one, Corporate office will decide, only if the franchise office mandates.

10%

36. When do you plan to change or perform a major upgrade on your Point of Sale System?

Response Percent

0-1 years 27% 2-3 years 27% 3-4 years 16% 5 years or greater 14% Other: (Various), Just completed one, Corporate office will decide, only if the franchise office mandates.

16%

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37. When do you plan to change or perform a major upgrade on your Central Reservation System?

Response Percent

0-1 years 20% 2-3 years 24% 3-4 years 16% 5 years or greater 12% Other: (Various) Note sure, Corporate to decide, Not Applicable, Outsourced, Franchise office to decide.

27%

38. When do you plan to change or perform a major upgrade on your Sales & Catering System?

Response Percent

0-1 years 48% 2-3 years 16% 3-4 years 8% 5 years or greater 12% Other: (Various) Not Applicable, Outsourced, Corporate to decide, hopefully soon.

16%

39. When do you plan to change or perform a major upgrade on your PBX\telephone switch?

Response Percent

0-1 years 20% 2-3 years 27% 3-4 years 6% 5 years or greater 37% Other: (Various) Not Sure, decision will come from Corporate. 10%

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40. When do you plan to change or perform a major upgrade on your Accounting Systems?

Response Percent

0-1 years 29% 2-3 years 22% 3-4 years 6% 5 years or greater 35% Other: (Various) Not Applicable, Not Sure, Corporate office will decide. 8%

41. Budgeting for technology spending can be difficult with the rapidly changing IT marketplace, how do you deal with this?

Response Percent

Research on my own time 49% Hire an outside consultant 18% Use a corporate resource 55% Attend industry tradeshows like Hitec 27%

Other: (Various) Internal Committee, We do not budget for technology. 8%

Electronic Distribution & eMarketing

42. How is your hotel website managed? Response Percent

We have our own website 68% We have a website as part of our corporate site 25%

We do not have a website 5% Other: Outsourced 2% 22



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43. Check all of the following that are features in your website: Response Percent

Ability to make room reservations 96%

Cancel room reservations 64% Special offers on room reservations 90%

Virtual tours 56% Streaming video 24% Loyalty program enrollment 44% Opt-in for email newsletters and/or special offers 52%

Customer recognition upon arrival to the site 22%

Pre-arrival concierge services 16% Dinner and/or other services reservations 28%

RFP for meetings 30% Employment 52% Other: (Various) Photo Gallery, none of the above, Menu’s, Packaged Tours.

12%

44. If there were three elements you could add to your website, what would they be? Response Percent

1. Virtual Tours 20% 2. Loyalty Program Enrollment 18%

3. Live On-Line Assistant 8% 23



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45. How happy are you with your website? Response Percent

We are ecstatic and getting results 14%

We are satisfied 68% We are unsatisfied but don’t have the budget right now to change it 9%

We are unsatisfied and will be significantly updating or creating a new site in the next 12 months

9%

46. How are your website reservations handled? Response Percent

Through our corporate internet booking engine 41%

Directly though our in-house internet booking engine to save commission costs 20%

Through a third-party switch such as Pegasus 16%

Through our corporate engine which is a 3rd party switch 9%

Via an email request only 9% Cannot be booked on website 2% Other: By the Franchise Office 2%

47. What percentage of rooms booked comes from internet bookings? Response Percent

0-5% 39% 5-10% 23% 10-15% 16% 15-20% 14% 20-30% 7% Above 30% 2% 24



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48. How are the web reservations getting updated to the PMS? Response Percent

Automatically in real time 48% Automatically, but with latency,eg. hourly or daily 16%

Via email 18% Via fax 7% Other: Manual Entry by Agents at hotel or at call center. 11%

Do you provide incentives for guests to book directly on your website over any other channel?

Response Percent

No 60% If Yes, what incentive do you offer? (Various) Best Rate Guarantee & Discounted rates.

40%

50. Which 3rd party travel websites are your guests able to book through? Response Percent

Expedia 74% Travelocity 74% Hotels 62% Orbitz 56% WorldRes 46% Site59 14% Priceline 48% Hotwire 34% None 10% Other: (Various) Tour wholesaler website, tourism websites, etc. 10%

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51. Do you feel you receive a lower average room rate from the 3rd party travel sites? Response Percent

Yes 57% No 43%

52. Describe the consistency of your public room rates over your sales channels? Response Percent

Our rates are consistent across our sales channels 59%

Our internet rates are lower 36% Our call-in rates are lower 5%

53. Does your hotel have it’s own newsletter or email specials for guest who opt to receive it?

Response Percent

Yes 48% No 52%

54. Have you paid for links for your hotel website on other websites, such as travel sites, golf sites, conference center sites, search engines, etc?

Response Percent

Yes 48% No 52%

55. How have you optimized your website for location in search engines? Response Percent

We work with a company that specializes in Search Engine Optimization 36%

We have our web development company take care of that 32%

We maintain our site in house 23% No we have not 9% 26



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56. Do you believe technology can be used as a business driver for your property? Response Percent

Yes 85% No, I think they are more attracted by features like the Health Club, Conference Center, etc.

7%

No, People are more interested in “location” 5%

Other: It’s an amenity, service counts the most. 2%

57. From a guest perspective, do you feel that: Response Percent

Your property is technologically superior to your competitors 34

Your competitor’s properties are technologically superior to yours 10

They are about the same 56

58. Do you specifically target and advertise technology services and offerings to your guests?

Response Percent

Yes 59% No 41%

59. Even if you do not have it, do you believe that high speed internet access should be a free to guest amenity?

Response Percent

Yes, but I cannot because I am bound by a contract 7%

Yes, It helps sell rooms 44% No, it's a premium service and if a guest wants to use it, they should pay for it 39%

No, it should be used to make up for the lack of telephone revenue 5%

Other: (Various) It’s a service that needs to be competitive; N/A

5%

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60. What kind of guest feedback have you received about the technology in your property?

Response Percent

Positive 44% Neutral 37% Negative 0% None 5% Have no idea 5% Other: (Various) Both positive & Negative; Love it or hate it; Problems connecting with the hotel high speed internet access.

10%

Canadian Content

61. Do you feel that there are enough vendors in the Canadian information technology marketplace for you to buy Canadian while still getting best of breed or industry leading technology?

Response Percent

Yes 40% No 60%

62. Do you immediately rule out vendors in the United States because of the exchange rate?

Response Percent

Yes 10% No 90%

63. Would you be more apt to select a vendor in the United States if you could negotiate a fixed exchange rate for the duration of your agreement?

Response Percent

Yes 54% No 46%

64. If you could directly influence the development, service and support of technology vendors and their products outside of Canada, what specific issues or concerns would you have them immediately address for the Canadian marketplace?

Response Percent

1. Better Local Support 20% 2. Better Understanding of Canadian Issues 17%

3. Exchange Rate 12% 4. Competitive Pricing 10%

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HOSPITALITY UPGRADE • www.hospitalityupgrade.com | Fall 2002 • 111

Technology Strategy

by Neil Holm

KEEPING UP WITH THE JONESES

D evelop a technology strategy(short and long term) that fitsyour operational needs and is

within your financial means that addressesnot only the asset cost (hardware and soft-ware) but also the total cost of ownership.

Have you ever heard of the saying keep-ing up with the Joneses? They are the nicewell-to-do family who we all secretly admireand are somewhat jealous of because of theirnice house, car and other worldly posses-sions. In the business sense, when theJoneses went out and bought the latest andgreatest Widget-2k2 we all said to ourselves,“I must have one, otherwise what will peoplethink.” Therefore, you go out and buy theWidget-2k2, but you strain your resourcesto do so.

So how does this analogy translate toinformation technology? The problem is thatmost of us are not like the Joneses so whyshould we spend far beyond our means inour endeavor to keep up with the well-to-doclass? Instead of choosing to define ourselvessolely by what technology we buy, we shoulddefine ourselves by how we:

• buy technology,• define the rationale behind it, and• determine the manner in which we

use it

Hotel and restaurant operators have astrong sense of their business operations andspend a great deal of time planning, budget-ing and executing their business strategy. Yetthey still defer their information technologystrategy to the most technical person onsitewho could be their local IT person, some-one from accounting or the young, studiousdishwasher. “Hey computer whiz, I am put-ting together next year’s operating budgetand capital plan. Can you give me your tech-nology wish list?” Sound familiar? The prob-lem here is that if it were solely up to thecomputer whiz, your information technol-ogy would rival that of NASA, which is greatif you are launching the Space Shuttle butoverkill for the hospitality industry.

The acquisition of technology is not atechnical decision, it is a business decision.

The same rationale in determining how toenhance customer service, whether or notyou should replace your china or renovatenext year, should be used in determining howto spend your technology dollars.

Aligning Technology toYour Business Strategy

Technology is an enabler. If you are inconstant break-fix mode then your technol-ogy will impede your business operation. Toget to the point where technology is alignedto your business strategy, you first need astrategy for managing your technology. If youdo not have an IT plan, then develop onethat follows the framework of fix, optimizeand look to the future.

The moment you purchase technologythere is a cost associated with it known asthe total cost of ownership (TCO). It includesthe cost of the hardware, software and up-grades as well as the cost of the in-housestaff and/or consultants that provide train-ing and technical support.

1) Form an IT steering group com-prised of key business decision makers andinformation technology experts. If you donot have the internal technical expertise, findexternal consulting resources who can as-sist you during this important planning pro-cess.

2) Determine what technology is bro-ken and fix it immediately. Optimize yourtechnology so that it is running at its peakefficiency, i.e. well trained users, applicationexperts, daily backups, virus protection,scheduled technical support and scheduledfile maintenance. Once your systems areoptimized, you are able to mitigate the break-fix work as scheduled maintenance and mini-mize any significant downtime, which canaffect your customer service and employeeproductivity.

3) With your systems optimized, youcan look to the future and your long-termgoals.

• What are your year one, year two andyear three business objectives anddoes technology play a supporting ordriving role in achieving these objectives?

• What are the expectations of yourguests and customers?

• What technologies will enhance youroperations?

• What are the emerging trends in yourindustry?

As you come up with ideas, eachstrategy needs to pass a litmus test. Ifyour idea cannot meet one of the cri-teria below, you should question theviability of that initiative:

1. Increase revenues2. Reduce costs3. Enhance customer service4. Increase employee productivity5. Meet the objective of a larger

strategic corporate plan

After you have determined a budgetnumber for an idea and validated the viabil-ity of a strategy comes the most importantpart—funding the strategy. If your name isJones, then spend, spend, spend. If it is notJones, you weigh this initiative against all theinitiatives within your budget and you makethe determination of what is funded in yearone, year two or year three. If your initiativehas an ROI payback within 12 months, thenthat’s an easy decision—do it.

A balanced approach is best. With afinite number of dollars at your disposal,hard decisions are made. New and sexy tech-nology is great to see when I walk into a res-taurant or hotel, but I equally appreciatesparkling silverware and a renovatedguestroom.

So, we are not the Joneses, but with agood information technology strategy inhand, we can optimize our existing systemsand ensure we run our businesses effectively.

Neil Holm is president of hyphen in-formation systems management, formerlyknown as Innovative Hospitality Solu-tions. He can be reached at (604) 685-8632.

This article is reprinted with permission fromHospitality Upgrade magazine, TheTechnology Source, Fall 2002, page 111. ©2002 Siegel Communications, Inc.

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20 • HOSPITALITY UPGRADE • www.hospitalityupgrade.com | Spring 2002

Neil HolmPresidenthyphen information systems management

OutsourcingOutsourcingOutsourcingOutsourcingOutsourcing

A GROWING PHENOMENON

Outsourcing is a smart way to do business. Bighotels and restaurants in the hospitality busi-ness have outsourced non-core work for years,turning to dedicated experts for efficiency andcost savings. And now even smaller businessesare choosing to fill out their organizations withoutsourced expertise in the areas where theylack resources, capital and knowledge.

The traditional organization chart in the hospitality industry isbranching out and shifting to include not only internal departments butalso external suppliers.

These companies pay for in-depth expertise only when they needit, avoiding full time salaries, training and increased management costs.Outsourcing can lower costs, improve organizational focus and increasespeed and flexibility of businesses. With effective outsourcing partners,hospitality businesses can powerfully achieve their corporate objec-tives in ways they could never do themselves.

Outsourcing is a quickly growing phenomenon that works wellfor many hotel, restaurant and foodservice providers. Now there areeven Web sites (www.firmbuilder.com and www.outsourcing-journal.com ), business books, organizations and seminars dedicatedspecifically to the overarching topic of outsourcing and its benefits.

The recent 2001 Outsourcing World Summit highlighted that es-pecially in this slowing economy, executives are feeling the pressure tofind new ways to grow revenue and reduce costs – outsourcing beingone effective method. Of the 500 attendees surveyed, the two most oftencited goals for outsourcing were to reduce costs (36 percent) and tofocus the organization on its core business (36 percent). Informationtechnology in particular continues to be the most-mentioned area to beoutsourced, with 34 percent of the attendees stating their company’smost significant project would be in IT.

When to OutsourceIf an ongoing problem is keeping your hotel, restaurant or

foodservice business from growing, outsourcing should be a seriousconsideration. Outsourcing might work well for you when:

• Your business is stuck in a certain area and you don’t havethe capital, resources or know-how to fix the problem yourself.

• You avoid fixing the problem because it is never a high enoughpriority and you can never dedicate the time or resources to the recur-ring difficulty.

• An outside firm can do the job more quickly and efficientlythan you can in-house.

• You are unable to focus on the success of your core hospi-tality business because you are repeatedly revisiting the same problem.

Once you’ve decided to outsource, gather names from others inthe hospitality business to identify potential outsourcing partners. Ifpossible, choose several companies and compare their offerings, costsand credentials in a formal request for proposal. Often, there are fewproviders to choose from, but even then make sure you speak withtheir executives, their customers and to experts in their industry to feelcomfortable that the partnership can be an equitable one.

Managing the Outsourcing RelationshipOnce you’ve decided to work with an outsourcing partner, it’s

important to realize that customers also play a crucial role in the suc-cess of the partnership. Customers can sometimes be unhappy with asupplier without seeing their own contribution to the problem. Mixedmessages, unclear goals and responsibilities and miscommunicationcan hamper the effectiveness of your outsourcing partner.

Treat your outsourcing provider as part of your hospitality busi-ness and keep these tips in mind:

• Develop clear goals, responsibilities and an overall strategyfor all those involved.

• Insist on open communications from both sides. Talk con-tinuously about what’s working and what isn’t.

• Negotiate a win/win situation aiming for a long-term rela-tionship supported by a continually renewable short-term contract.

• Discuss the possibility of the relationship going sour and howboth parties will handle the fall out. Try to anticipate possible conflicts andfind ways ahead of time to minimize the likelihood of them happening.

• Be clear on who is making what decisions (and on whatbasis), who will be consulted prior to any decisions, and who will beinformed (and through what mechanisms) after the decision has beenmade.

• Develop criteria to evaluate the performance of both sides ofthe outsourcing partnership and monitor them regularly.

• Adjust the partnership where needed to achieve previouslydefined goals.

It’s no longer a matter of IF you should outsource, but more amatter of WHEN and HOW. Outsourcing partnerships will succeed ifyou manage the relationship diligently and realize that outsourcing cli-ents also have an important responsibility – to communicate in a straight-forward and honest way to help outsourcing partners do their jobs ef-fectively. Outsourcing partners can really help your hotel, restaurant orfoodservice business grow.

This article is reprinted with permission fromHospitality Upgrade magazine, TheTechnology Source, Spring 2002, page 20.© 2002 Siegel Communications, Inc.

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Averting a Technology Purchasing DisasterAverting a Technology Purchasing DisasterAverting a Technology Purchasing DisasterAverting a Technology Purchasing Disaster Neil Holm President, hyphen August 2003 Implementing new technology can be a powerful way to achieve your overall business objectives by providing a better guest experience and stronger profitability. However, buying technology that doesn’t match your needs can do exactly the opposite. It can cause employee frustration, make it difficult to extract reliable strategic information and can culminate in poor guest relations and low staff productivity. Too often I hear nightmare stories of implementations gone bad and hotel managers pining to have their old systems back. I offer these words of advice when purchasing new information systems for your hotel. Careful planning is the key to avoiding a technology procuremenCareful planning is the key to avoiding a technology procuremenCareful planning is the key to avoiding a technology procuremenCareful planning is the key to avoiding a technology procurement disaster. t disaster. t disaster. t disaster. As the purchaser, you are 100% in control and completely responsible for clearly stating your expectations to potential vendors. Disasters often happen because key requirements were overlooked and never discussed up front. Often the most difficult part of the process is knowing what to ask for. If you do not have adequate technology and purchasing experience internally, invest in a consultant to save yourself time, money and many future headaches. Before you start shopping for new technology, ask yourself these two important questions. “Do I really need new technology?”“Do I really need new technology?”“Do I really need new technology?”“Do I really need new technology?” Before making an expensive purchasing decision ensure that you have fixed or optimized your existing systems as much as possible. Don’t get caught up in the frenzy to have the latest technology when your existing system may be adequate with some upgrades and supplemental training. If you don’t have the resources in-house, have an expert evaluate the possibility of adapting your system to achieve your short and medium term goals while you prepare for the transition to a new system in the long term. An objective third-party expert will be able to tell you if it’s worthwhile to revamp your system or cut your losses now and switch to a new system. If you decide to keep your existing system over the near term with some budget-conscious modifications, make sure you optimize your technology so that it is running at peak efficiency, i.e. well trained users, application experts, daily backups, virus protection, scheduled technical support and scheduled database maintenance. By taking these optimization measures, you will minimize any significant down-time you might experience that affects your customer service and employee productivity. Don’t forget that technology is an enabler. If you are in constant break-fix mode then your technology will impede your business operation.

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“Should I use an RFP or not?”“Should I use an RFP or not?”“Should I use an RFP or not?”“Should I use an RFP or not?”

Some people say, “Don’t bother with the RFP – it’s too time consuming and costly”. Well I ask, how can you afford NOT to go through this important process and risk ending up with a disastrous solution that haunts your business for years to come? RFPs are critical structures that put all vendors on the same playing field. Persuasive sales teams, slick marketing or preconceived perceptions can make it difficult to evaluate the facts in this competitive arena. Never involve vendors in comparing features between competitors – obviously their overall goals may be different than yours. But even more importantly, the RFP process ensures that you have critically examined your business processes thoroughly before speaking to any vendors. Far too often, purchasers haven’t articulated their needs and objectives and end up with a system that’s the proverbial square peg in the round hole. If you still have good reason to avoid an RFP, at minimum, it is essential to at least undergo a thorough internal evaluation to specifically determine your needs and make your expectations clear for your chosen vendor. Whether you go to RFP or not, here are 5555 basicbasicbasicbasic tips tips tips tips to help you avoid a technology purchasing disaster. 1. Form an IT steering group 1. Form an IT steering group 1. Form an IT steering group 1. Form an IT steering group - Form an IT steering group comprised of key business decision makers and information technology experts. Find a tech-savvy and organized leader to head the team, ideally someone who is well organized, who can communicate your needs clearly and effectively in writing. If you don’t have these specific skills in-house, hire a consultant to take on the process for you. Often an outside objective third-party can uncover potential issues quickly and clearly present your goals in a way that vendors understand. Experts can question vendors in areas where your basic systems know-how may be limited, saving you time and money in the long run.

2. Identify needs using staff and m2. Identify needs using staff and m2. Identify needs using staff and m2. Identify needs using staff and management input. anagement input. anagement input. anagement input. Input from representatives of all key departments will give you a total picture of what you want your system to do. Each of these individuals has valuable everyday insight into what works with their current system and what would help them do their jobs better. Even if they don’t know exactly how the new technology could solve their problem areas, they can identify key issues and challenge vendors to come up with a solution.

Brainstorm, think out of the box, think about what you need - not only about what technology exists out there. What are the expectations of your guests and

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customers? What technologies will enhance your operations? What are the emerging trends in your industry?

3. Align technology to your business strategy3. Align technology to your business strategy3. Align technology to your business strategy3. Align technology to your business strategy. What are your 1st, 2nd and 3rd year business objectives and does technology play a supporting or driving role in achieving those objectives? Each idea you generated above needs to pass a litmus test. If your idea cannot meet one of the criteria below, you should question the viability of that initiative:

� Increase revenues � Reduce costs � Enhance customer service � Increase employee productivity � Meet the objective of a larger strategic corporate plan

4. Write a clear RFP4. Write a clear RFP4. Write a clear RFP4. Write a clear RFP. The RFP clearly identifies your expectations so that there can be no misunderstanding between you and your vendor about your requirements. From the outset, clearly describe and document what functionality and service must be provided when. Incorporate financial penalty clauses for missing deliverable dates or for inferior work. If these requirements have not been clearly identified then you may have no recourse for non-performance by the supplier in the event that something goes wrong resulting in cost overruns and missed deadlines. 5. Evaluate RFP fina5. Evaluate RFP fina5. Evaluate RFP fina5. Evaluate RFP finalists objectively. lists objectively. lists objectively. lists objectively. The challenge here is for the IT steering committee to put aside their preconceived ideas about specific vendors with the final decision being made as objectively as possible. A good practice is to use the blind scorecard system which eliminates vendor identification to ensure features and functionalities are graded on the same basis - similar to how experts compare cars that are in the same class. Objectivity is a must in ensuring the system truly matches the needs of your organization. Implementing new technology should be an exhilarating and motivating change for the better. Plan carefully to ensure a positive outcome for your hotel.

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WHAT GUESTS REALLY WANT – The Power of CRM Neil Holm August 2003 Often referred to as a type of technology, CRM (Customer Relationship Management) is first and foremost a business philosophy – a way to consistently treat your guests right. Technology is the enabler that helps get useful information into the hands of your management and staff so that they can more powerfully foster guest satisfaction and loyalty. The big payoff? Increased revenue, increased profits and more targeted marketing efforts. CRM solutions typically evolve from simple manual processes, to standalone software and eventually to fully integrated systems spanning all channels and guest touch-points. The ability to analyze historical data in countless ways, 1) gives strategic decision makers the factual knowledge they need to guide the organization toward its goals, and 2) gives front line staff the customer knowledge they need to treat their guests like gold. CRM technology has become an important force in many industries - hospitality included - that can help give hotels the edge over competitors while maximizing profitability, revenue and customer satisfaction. Some organizations may be more technically advanced than others but the CRM journey is a continuous one. As more data is gathered over time, new insights are illuminated and acted upon. TOOLSTOOLSTOOLSTOOLS Hotels generally gather information through their PMS, uploading and retrieving information regularly from a CRM database. Some hotels can handle their CRM requirements directly from the PMS alone especially when upgraded with increasingly powerful modules that have query capabilities. But the more robust and powerful practice is to implement horizontal CRM systems designed specifically for the purpose of gathering data from multiple sources, scrubbing the information to enhance data integrity and analyzing data in a myriad of ways. The CRM must be fully integrated with existing CRS, PMS, website and other IT infrastructure and architecture. BENEFITS & PITFALLSBENEFITS & PITFALLSBENEFITS & PITFALLSBENEFITS & PITFALLS When CRM is mastered, corporate benefits abound. Revenue and occupancy gets a boost from cross-selling and up-selling to existing loyal customers, attracting new customers and providing services through multi-channels making it easier for guests to purchase services. Differentiation occurs when you create customer loyalty by responding to customer needs and preferences in ways that enhance

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their lifetime value to you as an organization. Enhanced decision making helps top level management steer the company closer to their guest centered vision.

However, because CRM spans the entire organization it is only as good as its weakest link and is susceptible to failure mainly due to lack of buy-in, planning, training and overall leadership. To help CRM succeed in your organization, you need to remember these four basic tipsfour basic tipsfour basic tipsfour basic tips:

1) Share the Vision and Train with Rigor to Ensure Data Integrity1) Share the Vision and Train with Rigor to Ensure Data Integrity1) Share the Vision and Train with Rigor to Ensure Data Integrity1) Share the Vision and Train with Rigor to Ensure Data Integrity CRM is an enterprise-wide commitment encompassing all elements of the organization. Key leaders need to unfailingly convey the overall corporate vision of how they expect CRM to help achieve goals. CRM should ultimately give staff more decision making power helping them to anticipate customer needs more quickly and accurately. Feeding accurate information to the CRM, ultimately rides on the shoulders of hotel management and staff. If data entry is inconsistent or inaccurate, the value of the CRM plummets. Proper training is the key to successful implementation of CRM. Standardized input is essential and ongoing monitoring and training is important to ensure that data entry standards remain high. 2) Plan on All Levels to Foster Buy2) Plan on All Levels to Foster Buy2) Plan on All Levels to Foster Buy2) Plan on All Levels to Foster Buy----In and Get PerspectiveIn and Get PerspectiveIn and Get PerspectiveIn and Get Perspective Get feedback from all parts of the organization on how they interact with guests now and how they could see themselves delivering better service in the future. Map out all guest touch-points and re-evaluate key processes in light of improving the guest experience. Your plan should be aligned with your overall business and marketing strategies and outline how your property will build customer loyalty. Prepare a complete business case including solid ROI estimates when deciding on the tools you will use to collect your data. Review your IT skill level, and how your technology outlook is aligned with overall corporate goals. Ensure that you’ve amply budgeted for training and change management to ensure that technology and processes are adopted successfully. Purchasing CRM systems can be a big ticket item. If you don’t have the skills in-house to objectively evaluate the multitude of options available, hire a consultant to take on the process for you. Often an outside objective third-party who is not tied to a specific technology can quickly shortlist the key vendors that match your needs and help you develop the solution that works best. Experts can question vendors in areas where your basic systems know-how may be limited, saving you time and money in the long run.

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Don’t bite off more than you can chew. Work back from your vision and define achievable steps for implementing your new system. Work on basic elements first and when achieved successfully, move onto the next stage. 3) Optimally Use Data to Enhance ROI3) Optimally Use Data to Enhance ROI3) Optimally Use Data to Enhance ROI3) Optimally Use Data to Enhance ROI The two most important ways to use your CRM data are to enhance the guest experience and to leverage marketing strategies. Enhancing the guest experience with CRM technology helps you practically know what guests want before they even walk through the front door. Know which are your most important customers and treat them like gold. Your staff should have the knowledge to offer the right service at the right time to the right guests. To leverage marketing strategies, CRM provides powerful customer segmentation, marketing, advertising and media analysis. Truly knowing who your customers are can help you pinpoint communications more accurately improving your marketing ROI. You may find that some guests are more inclined to respond to discounts, while others prefer extras like room upgrades or dinner packages. By effectively targeting the right offers to the right guests, your revenue increases. Guests are less annoyed because you are marketing offers they are interested in and in the way they want be communicated with. 4) Constantly measure and fine4) Constantly measure and fine4) Constantly measure and fine4) Constantly measure and fine----tune your strategiestune your strategiestune your strategiestune your strategies I can’t overstate the importance of tracking results consistently and actually using the information to facilitate better business decisions. Keep a thorough contact history for each customer by tracking when, how and what their response was for each communication. For example, you can gage the success of campaigns by tracking separate 800 numbers to decide which customers responded to which offers and why. Measurements provide constant feedback to help modify the CRM strategy and monitor the customer experience. Whether you use advanced CRM technology or not, focusing your attention on your guests in ways they appreciate can only help improve your revenue and ultimately the bottom line.

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132 • HOSPITALITY UPGRADE • www.hospitalityupgrade.com | Spring 2003

T E C H N O L O G Y S P E A K

by Neil Holm

Consider this. You are called into workdue to an emergency. You get to the hoteland see a line of guests waiting to checkout winding from the front desk across the

lobby all the way to the entrance doors. As you quicklybegin to assess the situation, you assemble your man-agement team and your local information technologyresource to brief the entire group.

THE JARGON ZONEINTERPRETING IT LANGUAGE

The creation of jargon is a natural process.In some cases jargon strengthens anorganization by providing a unique means ofcommunication. It becomes a bonding toolmuch like a special handshake or secret doorknock.

It is a mistake to assume others talk the same technical language as you. But as often isthe case when the dialog is over our heads, instead of risking embarrassment for notfully understanding, some of us will smile and nod our heads.

The IT department stops you to say, “Early thismorning one of the drives on our file server failed. Unfortunately, we were not configured with RAID 5only RAID 0 so we are unable to use this file serveruntil we get the spare part flown in from Lilliput. Now,I have a spare workstation that I can configure as afile server and ghost a new O/S on it; however, due tobudgetary cutbacks in our DLT tape budget, we onlyhave one full monthly backup and the rest are differ-ential backups. To restore to yesterday’s backup willtake approximately another 18 hours.”

To which you angrily respond, “I do not under-stand, but who the heck approved that.” And your ITresource embarrassingly replies, “You did.”

Ladies and gentlemen, you have just entered thejargon zone.

It is easy to misinterpret information with all thejargon of the industry. Just as societies and culturesdevelop individual languages, various industries fol-low the same path by creating means of communica-tion common to its own corporate culture.

DefinitionJargon is defined by Merriam-Webster as (1) a

hybrid language or dialect simplified in vocabularyand grammar and used for communication betweenpeoples of different speech, and (2) the technical ter-minology or characteristic idiom of a special activityor group.

So Why Use Jargon?The International Hotel & Restaurant Association

(IH&RA) has argued that in order for the financialcommunity to become more comfortable with the hotelindustry, the use of jargon must be minimal. TheIH&RA has stated that it is equally important for theindustry to develop easily understood performancecriteria, and leave aside jargon such as RevPAR in fa-vor of simpler growth indicators such as EBITDA(earnings before income tax, depreciation and amor-tization).

The creation of jargon is a natural process. Insome cases jargon strengthens an organization by pro-viding a unique means of communication. It becomesa bonding tool much like a special handshake or se-cret door knock.

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The medium of language is thestrongest basic tool for communication.Salesmen know how useful using a po-tential buyer’s jargon can be in makingsales pitches. Job seekers going on afirst interview make an effort to researchjargon used by possible employers. Suc-cess starts with speaking the same lan-guage.

In another example, during a re-cent conference call with an experiencedrestaurant manager, the corporate officemanager and a technology vendor, thegroup began planning the initial stepsfor a future POS installation. The cor-porate office used terms such as stand-alone resiliency, network drops, remoteprinting, risers, user workstations andspecific software names such asPCAnywhere, Crystal and Tapeware. Ev-erybody appeared to understand andagree to the process, but as they nearedthe installation date, critical elementswere left out leading to an upset restau-rant manager. It was certainly a mis-take to assume that the restaurant man-agement talked the same technical lan-guage as the vendor or his corporateoffice, but as often is the case when thedialogue is over our heads, instead ofrisking embarrassment for not fully un-derstanding, some of us will smile andnod our heads.

Properly managing the followingareas will assist you in effectively com-municating across corporate and indus-try borders, while not letting the use ofjargon complicate your business deci-sion-making process.

PreparationHow hard would it be to send some

product reference guides, a glossary list,installation manuals or promotionaltools to a potential business partner be-fore any serious interaction? In mostcases these items are already developedand used in other areas of the business.When traveling to another country, itwould be wise to purchase a phrasebook to read on the plane so that whenyou visit, let’s say England, then you willknow that a plaster is a Band-aid, the

washroom is the loo and a tuxedo is adinner jacket. The goal is to be speak-ing and understanding the same lan-guage.

TrainingThe trainer’s role is extremely im-

portant when introducing new productsto clients. Starting simple is the appro-priate first step. Trainers should neveruse jargon, unless first defining the termsused within a presentation. In thetrainer’s critical role, clear, commonlyunderstood intelligible works are essen-tial when passing information acrossuncharted mental territory.

CommunicationAwareness

Customer service begins with effec-tive communication. When front deskstaff, restaurant servers or conciergesuse jargon, guests can easily make mis-

T E C H N O L O G Y S P E A K

takes in the interpretation of a statement.In some cases the jargon can even bemisleading and cause a guest to read intoa situation negatively. If a hotel guestasks for rooms that are side by side, arethey adjacent, adjoining or connecting?Or are they all of the above? Your inter-pretation of the meaning may not be theonly interpretation. Articulate clearly toyour audience what you mean and usevisual aids if necessary.

In order to manage the jargon usedwithin your business, good internal andexternal customer service skills have tobe utilized by each employee. Businesscommunication should use precisewords and statements that both your in-ternal and external customers can un-derstand.

Neil Holm is president of hypheninformation systems management.Neil can be reached at (877) 448-7246or (604) 685-8632.

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