Getting Smart about Tech Investments

By Cihan Cobanoglu | September 08, 2009

While traveling recently for a training seminar, I had my first exposure to an electronic "smart card" room key. The hotel I was staying at happened to use smart card door locking technology, so I was given a smart card key upon check-in. While the costs associated with these systems, and their associated locking units and installation, can be significantly higher than a traditional magnetic stripe card locking system, they also offer considerable benefits towards streamlining operations and enhancing guest services. Needless to say, I was very anxious to see what it could do.

I inserted the key into my guest room lock and entered. Once inside, I spotted an energy control unit which manages the room's electricity and air conditioning, and is activated by inserting the room's keycard. I inserted the smart card, thereby turning on the room's electricity. I scanned the room, looking for other applications for the smart card, but found none. Later, I decided to try inserting a traditional a magnetic stripe key card into the energy management unit and found that it also activated the system. The unit in this particular hotel, it turns out, did not require the smart card for activation, it required only a room key!

When I saw the hotel's general manager in my same training seminar, I asked him to share why the hotel had invested in smart card technology, and what it was being used for at the property. He explained that, as a part of renovation, they wanted the most comprehensive system available and invested in smart card locks. Currently, however, the hotel was using this technology simply as a regular room-locking system. I asked if the hotel used a request for proposal (RFP) process, and his answer was rather surprising for such an important investment. He told me that he'd heard about this system and the vendor from another colleague.

First, let's be clear. There is absolutely nothing wrong with asking colleagues and vendors about the systems they use or sell. However, this should not be the only method used when researching a purchase. Due diligence would have informed this hotel operator about the myriad benefits of a smart card system: they can be used as an electronic wallet in lieu of cash or other payment methods; they can double as a loyalty card and help track CRM data; they can provide special privileges and/or access across the property, and since data can be stored on the data chip, smart cards can also be used to track employee movements within the hotel. They can also be used as a time and attendance device and, when coupled with a biometric feature, can offer authentication to ensure security.

RFP & systematic selection
Managers in the hospitality industry need to follow several key steps when buying a new system, especially in these difficult economic times. First is reviewing the needs of the organization and the needs of its staff members. The next step is to evaluate the current systems in place and determine if they meet the needs of the organization. If the answer is no, then the organization is ready to make a new purchase.

The next step is to create a budget for this new system, followed by a request for proposal. The RFP is probably the most important step in this process as it will allow you to communicate with vendors about what you want and what you need. During the RFP process, you should identify certain criteria for selection and give weights to these criteria. For example, if the cost of the system is the most important criterion for you, then you will assign it a high weight in your decision-making process. If reputation is not as important, then you can assign it a lower weight.

Next, select the top three vendors that most closely match your criteria and invite them to give demonstrations of their solutions. Prior to the demo process, it's important to provide vendors with a script; that is, a clear direction as to the features and functions you're interested in, down to the level of granularity that will impact your purchasing decision, so that the vendor can demonstrate exactly what you want to see. This will furthermore ensure that you're able to compare features across systems, essentially giving you an apples to apples approach. Finally comes the selection step, followed by implementation.

This example in system selection reminded me of one other experience I had. I was once contacted by a hotel company to help them with the purchase of a yield management system. Upon my initial visit to the site, I realized that they already had a yield management suite in place, but it was not activated. Had they followed the systematic selection process, they would likely have found out more about their current systems and saved themselves time and money.

The lesson is this: do your own homework before your purchase. Don't let anyone else do this homework for you; else you risk paying for more than what you need, and not getting what you want.

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