Hospitality Technology & Digitalization: Digital Revolution

The Digital Revolution

• The Industrial Revolution (19th century) replaced dangerous and heavy work with machines.
• The IT Revolution (20th century) replaced repetitive and tedious work with machines.
• The Digital Revolution (21st century) replaces knowledge work with machines.

Exponential Technological Advances

• Drive changes in business models.
• Products, services, and processes are innovated to create a competitive advantage.
• Entire industries may be disrupted.

Types of Digital Innovation

• Digital business models and services.
• Digital customer experience.
• Data-driven insight.
• Intelligent process automation.

Digital Business Models

• E-commerce (e.g., Ebay, Amazon).
• Digital advertising (e.g., Google, Facebook).
• Crowd sourcing (e.g., Lego, Linux).
• Servicification (e.g., Rolls Royce).
• Additive manufacturing (e.g., New Balance).
• Platform economy (e.g., Airbnb, Uber, Netflix).
• Digital payments (e.g., Paypal, MobilePay).

Data and Its Application

• Data-driven insight.
• Insight for management (internal and external).
• Insight for operational processes (internal and structured).
• Insight as a service (external and unstructured).

Process Automation

• Intelligent process automation.

Digital Customer Experience

• Customer behavior in the digital era.
• Understanding customer behavior and needs.
• Customer data DNA (life events, social influence, app usage, client website clickstream).
• Omni-channel (customer experience).

SMACS (Social, Mobile, Analytics, Cloud, Security)

• Social media.
• Mobile computing.
• Analytics of data.
• Cloud computing.
• Security of data/cybersecurity.

Data Security and Compliance

• Data privacy.
• Personal identifiable information (PII).
• Data security regulations (e.g., GDPR, PDPA).
• Cybersecurity measures.
• Types of malware used in cyber attacks (e.g., adwares, backdoors, ransomware).

Cyber Attacks

• Phishing (e.g., deceptive, spear, CEO fraud, pharming).
• "Man in the middle" (MITM) attacks.
• Public WiFi attacks (e.g., sniffer, ARP, sidejacking, evil twin).

Data Breach

• Causes of data breach (e.g., weak or stolen credentials, back doors, spyware, ransomware).

Security Requirements of Payment Card Industry

• Payment Card Industry Data Security Standard (PCI DSS).
• 12 requirements for PCI compliance.

PCI Data Security Standard

• 12 requirements for PCI compliance, including:

  • Installing and maintaining a firewall configuration.
  • Protecting stored cardholder data.
  • Encrypting transmission of cardholder data.
  • Maintaining a vulnerability management program.
  • Implementing strong access control measures.### PCI DSS Compliance

• Assign a unique ID to each person with computer access to restrict physical access to cardholder data

• Regularly monitor and test networks to track and monitor all access to network resources and cardholder data

• Maintain an information security policy that addresses information security for all personnel

Data Breach Crisis Management

• Levels of ownership: Strategic, Tactical, Operational
• Stages in data breach crisis response: Information, Impact, Decision, Plan, Allocate, Action, Measure Results, Information
• Objectives of breach crisis response: Contain, Control, Manage, Recover

Cloud Computing

• Definition: On-demand network access to shared computing resources, model for managing, storing, and processing data online via the Internet
• Includes: Hardware (servers, storage, databases) and software (networks, software programs, data analytics, artificial intelligence)
• History: Earliest development in the 1960s
• Key drivers: Alot of money, in-house IT decreases as computing workloads continue to move to the cloud
• Services available: Data storage, networks, processing power, office applications, quantum computing
• Examples: Gmail, iCloud, app developers, software vendors

Cloud Service Models

• Primary models: Infrastructure As a Service (IaaS), Platform As a Service (PaaS), Software As a Service (SaaS)
• IaaS: Renting fundamental building blocks of computing (servers, data storage, networks), company does everything else
• PaaS: Renting with all the services provided to build applications (middleware, database management, operating systems, development tools)
• SaaS: Software licensing model, delivery of applications as a service, end-user access via web browser or app

Differences in Cloud Service Models

• IaaS: Virtualization, servers, storage, networking
• PaaS: Runtime, middleware, OS, virtualization, servers, storage, networking
• SaaS: Application, data, runtime, middleware, OS, virtualization, servers, storage, networking

The Rise of Multi-Cloud

• Businesses using multiple cloud vendors to avoid being locked into one vendor and to find the best mix of technologies
• Benefits: Flexibility, scalability, cost-effectiveness
• Challenges: Skill shortages, workflow differences, integration and security

Benefits of Cloud Computing

• No need to buy or maintain computing infrastructure
• Scalability, flexibility, and cost-effectiveness
• Faster project deployment and testing
• Easier to get started with new applications
• Helps remove burden on internal IT staff
• Shifts spending from capital expenditure to operational expenditure

Advantages and Disadvantages of Cloud Computing

• Advantages: Rapid scalability, cost-effectiveness, easier to get started
• Disadvantages: Security concerns, potential for being locked into one vendor, skill shortages, upfront migration costs

How to Build a Business Case for Cloud Computing

• Understand existing infrastructure costs
• Calculate the cost of physical hardware and applications
• Factor in people costs and potential downsides
• Make provisions for the potential risks and downsides

Considerations for Cloud Migration

• Which applications to move to the cloud and which to keep in-house
• Potential risks and costs of migration
• Skills required for migration are difficult and expensive to find
• Performance of critical applications

Security Concerns in Cloud Computing

• Depends on the security of existing systems
• Companies moving data between multiple cloud services
• Growth in cloud security tools to monitor data and identify fraudulent use

Types of Cloud

• Public Cloud: A computing service offered by third-party providers over the public internet
• Private Cloud: Dedicated to a single organization, self-isolated, and controlled by the organization
• Hybrid Cloud: Combines public and private cloud services

Is Geography Relevant to Cloud Computing?

• Yes, due to latency and data sovereignty concerns
• Big cloud vendors are building regional data centers to cater to customers with specific requirements

Who are the Major Cloud Players?

• IaaS & PaaS: Amazon Web Services, Microsoft's Azure, Google Cloud
• Competitive Advantage: AWS (seasonal demand), Azure (enterprise history), Google Cloud (advertising-to-Android giant)

Downside of Cloud Computing

• Internet disruption or outage
• Few companies have backup systems
• As the world becomes more reliant on cloud, if cloud stops, work stops

Future of Cloud Computing

• Likely to account for more of enterprise tech spending
• An agent of digital transformation
• Help companies rethink business processes and accelerate business change

Business Case for Technology Investment

• Aligning business practices to business strategy
• As Is (Start): Performance down, cost up, compliance
• To Be (End): Innovation up, ROI up, cyber security and resilience

View of Technology from the Lens of…

• Developer/Investor: Flip property, minimal footprint, simple, and gadget-savvy
• Operator: Technology refresh cycle mismatch, increase revenue, improve operations
• Guest: Distinctive hallmarks, quality products, focus on guest experience

Gaining Sponsorship From Stakeholders

• Business unit managers, stakeholders, executive sponsor, project manager, chief technology officer, chief information officer, portfolio management committee, investment committee, chief financial officer

Identify Risks

• Risks: exposure to personal danger, harm, or loss
• Business risk: exposure to uncertainty resulting in loss of revenue, personnel, or assets

Why is there a Need for a Business Case?

• Convincing management of the benefits
• Justifying the ROI and risks
• Documenting and rationalizing the plan### Elements of the Business Case
• Tangible/Quantifiable:
  • Benefits: improved effectiveness, improved efficiency, enabling or supporting other benefits
  • Costs: direct project costs, acquisition costs, implementation costs, whole of life ownership costs
  • Risks: schedule slippages, personnel unavailability, budget shortfalls, pricing pressure
• Intangible/Qualitative:
  • Benefits: compliance with governance obligations, achieving best practice, reduced exposure to litigation costs
  • Costs: impact of non-compliance, impaired knowledge management, decentralization
  • Risks: new regulations and compliance, economic and political volatility

Benefits Realization

• Step 1: Identify Benefits
  • List current business programs
  • List what has to change
  • List what must be stopped
• Step 2: Identify Costs (Total Cost of Ownership)
• 3 reasons for benefits realization:
  1. Justify the risk of investment
  2. Convince management to endorse the idea/proposal
  3. Ensure the project team thinks through everything logically
• 3 aspects of benefits realization:
  1. Benefits identification: defines crystal clear benefits and outcomes
  2. Planning: defines all changes needed to maximize each benefit
  3. Realization: ensures plans are done and benefits are maximized

Why Business Cases Fail

• Don't identify all potential benefits
• Aren't leveraged
• Aren't focused on achieving benefits
• Don't clearly and credibly document the facts
• Focus on technology, not people and process
• Lack alignment with business objectives
• Ignore major risks and mitigation strategy
• Lack stakeholder involvement and commitment

Technology in the Hospitality Industry

• Timeline of technological advancements:
  • 1946: credit card adoption
  • 1953: first color TV
  • 1972: guestroom color TV
  • 1991: World Wide Web
  • 2000: ASIMO robot
  • 2003: Wi-Fi
  • 2016: Hilton's robot
• Value chain for hotel business:
  1. Build Hotel Pipeline
  2. Build People Pipeline (HR)
  3. Build Share of Guest
• Enabling activities:
  • Business Reputation & Responsibility
  • Human Resources
  • Technology
  • Finance & Procurement
  • Brand Management
• Primary activities:
  • Hotel Development
  • Design and Engineering
  • Opening
  • Operations
  • Talent Development
  • Sales & Marketing
  • Loyalty Program

Business Models

• Owned (Own Money)
• Managed (OPM)
• "Manchise" (OPM)
• Franchise (OPM)
• Hybrid model

Digital Guest Journey

• Dream: raise awareness and preferences of brands through search, display, and database marketing
• Plan: driving hotel consideration through multi-channel, localized content
• Book: converting sales across all digital channels
• Experience: enhancing a guest's experience before, during, and after their stay
• Share: facilitating customer social sharing and helping hotels manage this optimally