Commodities Trading

By Reid A. Paul, Editor-in-Chief | September 01, 2005

Does your accounting department provide a competitive advantage for your company? Probably not. How about your human resources department? Possible, but not very likely. Well, what about IT? Here's where the argument gets interesting.

In the hospitality business, nearly everyone recognizes that true competitive advantage comes from the quality of service and the ultimate customer satisfaction with the entire experience. It is all about how comfortable the guest room is, how good the burger tastes and how nice your employees were to the guests. Unlike most other industries, operations is the primary—and some say sole—realm for competitive advantage.

So where does IT fit in? There are few aspects of restaurant or hotel operations that are not impacted by information technologies. From the point of service to the back office and everywhere in between, managers and front end personnel are utilizing increasingly sophisticated systems to speed service and improve accuracy.

Of course, on the flip side, most industry leaders recognize (see, for example, this month's Vantage Point column from Jeff Chasney, CIO at CKE restaurants, or the April interview with Barry Shuler, CTO and senior vice president of information technology strategy at Marriott) that the only real advantage is speed to market with technology innovations. Most technology advantages are fleeting. Hotels & Restaurants learned to quickly follow any successful innovation.

As more hotels and restaurants adopt IT solutions, the opportunities for true technology innovation is squeezed. The vast majority of hotels and restaurants do not have the staff or the expertise to innovate in the true sense of the word. However, for those companies that do —especially the small, agile ones—the potential benefits are significant.

It is now difficult to find a restaurant without a POS, or even a motel without a PMS. Still, there are tremendous risks in picking the wrong IT system or implementing it incorrectly. As operations come to depend on information technology solutions, the risk of failure becomes more pronounced. When a system goes down, or does not deliver what operations needs, the cost to a restaurant or hotel can be considerable.

IT, just like accounting, has become a critical support function. It may not be a competitive advantage, but make no mistake, it does matter.

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