Hospitality gets smart

By Lisa Terry, Contributing Editor | June 01, 2007

Business intelligence is hot. Across industries, spending on business intelligence and performance management will hit $23.8 billion in 2007, up 3.6 percent, according to AMR Research, and it's hard to find a hospitality conference without a business intelligence, or BI, success story on the agenda.

Easier-to-use, more affordable, scaleable tools are helping BI shed its reputation as a costly, complex undertaking. BI's ability to increase visibility and enable better decisions by getting the whole organization working off the same key performance indicators and gaining business insights is enticing smaller operations to get on board.

Despite the advancements, seasoned users say that behind any successful BI strategy are several core tactics. HT identifies the big eight:

1. Know what you want to do, and start simple.
"If there is no business driver it's going to fail," warns Kenny Sullivan, senior director of business intelligence for Brinker International, which uses BI tools from Cognizant ( www.cognizant.com) and Information Builders (www.informa tionbuilders.com). Often, operators start with point of service (POS), labor or property management system (PMS) data to gain visibility into operations, then add financial, guest satisfaction and other data.

2. Select a tool that fits those needs.
"Business intelligence tools offer a lot of similar functions," says Brinker's Sullivan. "You've got to look at what is the best infrastructure for you today and what offers the flexibility to support ad hoc capabilities."

RGT Management, a Memphis-based franchisee of 60 Taco Bell, KFC and Pizza Huts, required a BI solution that could accommodate its multiple POS and backoffice systems; data is mapped to a table accessible by its BI tool. Michael Roe, partner and VP of operations for RGT, easily sums up its advantages: "I don't have to go to three or four different systems to get information."

Ensure the tool will scale. "Never underestimate demand," advises Dan Harkness, manager of database systems for Applebee's, a Teradata BI user (www.teradata.com). For users, "it may take a while to accept and understand" the BI tool, "but once they get rolling, demand and expectations grow rapidly." A truism about BI is that you don't know what the next question will be, so the infrastructure must support future needs.

3. Make sure data is clean and accessible.
Users' trust in the data is essential to acceptance. That requires up front work to ensure feeder systems share a common data dictionary, and incoming data is cleansed to ensure its integrity. Memphis-based Peabody Hotel Group, a 14-property chain which uses Aptech ( www.aptech.com), implemented a utility to ensure data is successfully collected and filtered.

Prior to its BI initiative, Hard Rock Café standardized its disparate POS systems on Micros (www.micros.com) so incoming data is consistent. Another step was standardization of key metrics. "The integrity of the data is the first challenge,' says Kelly Maddern, senior director of IT at Hard Rock Café. "Spend time proving the integrity" of the data in order to gain user trust, she advises. Hard Rock uses Oracle ( www.oracle.com) data warehousing and Microstrategy BI tools (www.microstrategy.com).

4. Standardizing data — such as the names of items on its menu — is key to success, according to Applebee's Harkness. "It allows you to do more. We tried to allow flexibility for our franchise partners, incorporating data the way they did it," but that negatively affected performance, he explains.

Ensure fast accessibility; consider a data warehouse or hub. A BI tool is most effective when it accesses data quickly. Often BI tools are deployed in conjunction with a data warehouse so the tool doesn't have to seek out required data from separate systems in different formats. Feeding data into one central data warehouse also ensures a single version of the truth.

Peabody Hotel Group organizes its data into pods or subsets of the data warehouse, applicable to each user area. "For the rooms person, they could take rooms department activity and slice it up into dimensions — just revenue info, or rooms payroll info, or rooms expense info," says Warren Winslow, corporate controller with Peabody. Hubs make it easier to quickly provide the data dimensions individual users need.

Corporate users, particularly analysts, are more likely to require ad hoc reporting and access to data across functions, while field users likely need standardized views and deep drill-down in pre-set dimensions.

5. Work closely with operations and other users.
"It's key to ensure you're aligned with the organization's needs," says Randy Bogart, executive director of enterprise systems for Applebee's. "We designed the dashboard with key metrics so the information is specific to the person using it."

"You've got to incorporate input from the operations folks," says Peabody's Winslow. Effective use of colors and graphics helps KPIs (key performance indicators) jump out at the user, highlighting areas of concern. Peabody uses a green-red-yellow scheme to highlight data out of expected ranges.

6. Set expectations appropriately.
"It will not be perfect on Day One," says Brinker's Sullivan. Despite the best efforts to create KPIs and dashboards to suit all users, they will invariably require tweaking later. "You've got to be ready to work with them a lot after the rollout," Sullivan adds. "This can be frustrating for users who sometimes drown themselves" in data.

7. Keep it simple.
"You have to take it in phases," says Hard Rock's Maddern. "You need clearly defined requirements and goals in mind. You can't do it all at once."

Applebee's has refined its tool in its nine years of use — new KPIs, additional feeders, more graphics, etc.— but "in general, we try to limit change unless it adds significant value," says Bogart. "Reports get into the flow of everyday use, and people expect to see it in a certain way."

To make use of its BI tool intuitive for users, RGT Management chose XFormity's QSRx (www.xformity.com), based on Microsoft's (www.micro soft.com) platform. "It's almost an extension of the office systems everyone is so used to using," says RGT's Roe. "It's all very fluid. You don't have to stop and figure out how to get data out."

8. Don't ignore cultural issues.
According to AMR Research's Market Demand for Business Intelligence and Performance Management (BI/PM), 2007, "mature BI/PM environments are equal parts technology and philosophy/culture. Addressing the technology without focusing on necessary change management leads to subpar results."

When Applebee's replaced a standard labor metric with guests per labor hour, which smoothed out variability in labor conditions across regions, they deployed the metric initially with senior execs, then to field management to drive acceptance from the top down.

Seasoned operators are constantly refining and tweaking their BI solutions, accommodating changes in the business and their experiences with the tool. These modifications include evolving KPIs, adding graphics and data visualization, and using the tools more to predict trends and automatically enact responses to alerts. Food safety is also a growing application, such as using the tools to monitor equipment for compliance with safety guidelines.

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