Tech Selection in Four Steps

By Cihan Cobanoglu | June 10, 2010

I recently visited the restaurant of a friend who was excited to tell me that he had purchased a new point of sale system. As he showcased the system, I asked him why he decided to purchase it, knowing that he had purchased his previous POS not too long ago. He said that the main reason was that the prior POS was not Payment Card Industry Data Security Standards (PCI DSS) compliant. I then asked him about how he selected his new system (which included three terminals and one server workstation). He said that one of his "buddies" told him that this was the best system on the market.

 
I teach technology management at a hotel school in a university. I always tell my students that if they are to get only one thing from my course, it should be how to properly select a technology system. I cannot express enough the benefits of going through a systematic method of selection. I do not know, had my friend gone through a step-by-step process, if he would have ended up with the same system he chose. But I know that this process can save operators big hassles and big money. Before choosing your next technology systems, use these steps as a guide:

1. Analyze current needs
This not only covers the needs of the operation at that time, but also the needs of the organization as a whole. Instead of relying solely on others to tell you what your needs are, you must identify these needs yourself. In doing so, be sure to consider the mission and vision of the company (and create them if they don't exist), as well as its organizational needs.

2. Evaluate the current system.
Can you fulfill those needs that you identified in the first step with your current system? For example, one day I received a call from an industry client asking me to help select yield management software for their hotel. In my first trip to the hotel, I found out that this hotel already had yield management software. They wasted a significant amount of time and money by not analyzing their current systems. Had they looked carefully or asked the right people for help sooner, they would have seen the existence of the software and used it right away.

3. Set a budget
I remind readers that there are options to buying. In this world of cloud computing, there are many great solutions out there that buyers can purchase on a monthly subscription plan. The main advantage of these Software-as-a-Service solutions is that the start-up cost is significantly lower compared to purchasing the system as a client-server model. Regardless of your choice in service models, however, create a budget and stick to it. Understand what your needs are for a return on the investment, in both hard and soft variables.

4. Request for proposals
The fourth, and quite possibly the most important step, is one which many buyers skip: a request for proposals (RFPs). These documents are invitations to the vendor/supplier community to submit proposals for their product or service offering. They can be substantial in size and intimidating to draft, which is why many hospitality operators may skip out. Requests for proposals (RFPs) may have the following sections: property profile, solicitation instructions and conditions including a statement for no-offer and right-of-rejection, vendor information, software system requirements, hardware specifications, interfaces and financial information. A well developed RFP is a chance for the buyer to compare apples to apples. There are good RFP templates available for major systems such as property management and point of sale systems. Interested vendors will respond to the RFP by providing proposals.
Making the choice

Once the desired proposals have been received, operators should next evaluate and narrow down the prospects to their top three choices. To do this, I recommend the use of a balanced scorecard method where each of the evaluation criteria will have a weight. The evaluation criteria and their respective weights should be decided by a selection team consisting of representatives from different departments in the hotel. Once the  scores are calculated, the top three vendors may be invited on-site to do"scripted" demonstrations. I emphasize the word "scripted" because if you do not tell the vendor what features/functions you want them to show you, they will show you what they want to. This will allow you to compare systems objectively. After the demonstrations, references should be checked for the finalists. A final decision should then be made based off of the references, demonstrations and selection team's scores. I strongly suggest that operators follow these steps and I guarantee that it will pay off in the end.
 
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