The Benefits of Business Intelligence

By Michael Heeden, President, Winston Hospitality | April 08, 2009

In today's economic environment of decreased top line revenues, companies are faced with the challenge of finding creative ways to reduce costs and improve operational efficiencies to meet profit expectations. The new era of business intelligence (BI) tools are starting to address the expense side as well as the top-line. The ability to understand revenue and expense performances on a daily basis, especially when compared to budgeted expectations, enables management to proactively make adjustments and ensure that a plan is in place to meet financial expectations. These solutions can also help operators identify any areas that require improved efficiency, and offer the ability to centralize information, reports, communication and more under one common web-based platform.  

Real-time results
Gathering and distributing all revenue and cost information on a daily basis in an easy-to-read format can be a very time consuming process. BI solutions allow hoteliers to process this information to make effective and timely decisions that control costs across multiple departments and/or locations simultaneously. Through BI solutions like Alloso Technologies' (www.alloso.com) Portfolio One, operators can be provided with daily access to relevant financial and other actionable performance metrics. All hotel revenue and statistical information from the property management system (plus labor and operating expenses) are gathered electronically and rolled up into a dashboard which compares daily and monthly performance metrics to the business plan.

The easy availability of real-time information enables department heads, general managers, regional managers, and corporate personnel to proactively make any adjustments necessary to ensure a plan is in place to meet profit expectations. Department heads can receive a daily dashboard update of key financial information every morning that includes updated totals for the previous day, including month-to-date totals. An executive housekeeper, for example, can track the previous day's labor productivity and communicate results back to the department before starting work the following day. This way, department heads are held more accountable for their financial performance as they have access to this information.

Labor scheduling costs
Continuing on the labor front, department managers typically schedule labor costs based on forecasted occupancy for the upcoming weeks. This is a good practice; however, it loses its effectiveness if actual performance is not tracked to budgeted or forecasted expectations on a daily basis. Solutions like ADP's EZLabor system (www.adp.com) are effective tools that operators can use to schedule and track labor expenses. This system allows department heads to create a schedule in the payroll system that is based on forecasted occupancy and alert management when employees exceed scheduled times. 

Go green with paperless
Business intelligence tools are extremely effective when it comes to managing business metrics. An additional way to build ROI and drive accountability, particularly when managing expenses on a daily basis, is through the use of scanners and on-line document storage. Winston Hospitality (www.winstonhospitality.com), for example, has been able to eliminate much of the expenses associated with "paper pushing." All relevant data and information from the property management system is transmitted and stored electronically. In addition, all accounts payable and weekly/monthly accounting packets are reviewed, approved, and scanned into document storage that can be viewed by the property and corporate office. This significantly reduces the amount of paper reporting that is generated, as well as the associated postage and storage expenses.
 

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