Hotel Online Special Report

How Fast Do You Want to Go?
Understanding the risks and costs involved with technology
implementation and getting there too fast.
This article is from the Fall 2006 issue of Hospitality Upgrade magazine.To view more articles covering technology for the hospitality industry please visit the Hospitality Upgrade Web site or to request a free publication please call (678) 802-5307 or e-mail.
By Edwin Klein, October 2006

As a teenager I often heard these words while working at an automotive store. My boss, the manager of the high-performance department, would use this expression whenever young men would ask for the latest and greatest offerings that would inject horsepower and speed into their precious vehicles.

“Speed costs money, son–how fast do you want to go?" 

These simple words are still just as relevant for company executives in the world of high-performance computing equipment and information systems as they were in the 1970s for the young speed-demons. And in today’s business information environment, this concept is not limited to simply speed, but includes factors such as features, quality, accuracy, agility, stability and simply the ability to perform in the best manner possible.

Speed does not necessarily mean the ability to run a report or process transactions rapidly. Instead, consider the concept of speed to refer to the ability to deliver solutions quickly. In most organizations, this usually means executing changes to existing infrastructure, processes and procedures, as rapidly as possible. In this document, the term information systems refers to the underlying technical infrastructure combined with software applications, processes and procedures.

Every organization has a need for information systems in some manner, and it is safe to say that very few organizations are completely satisfied with the information systems they currently have in place. This is as it should be–we as business professionals should always strive for improvement. If we are in good shape, excellence should be the goal. If we are already excellent, we should strive for perfection. Have you ever encountered, or even heard of, a perfect system–one that you should never change because it could never be improved upon? Are your systems as good as they could be?

The first step toward improving the information systems in your organization is to envision what you would consider perfect. Put together an outline of your vision of a perfect (or pretty darn good) information systems environment, and skip the details, the how and the when. Include only the end result, describing your desired destination. Think of this process as a trip–before you can figure out how to get there you must decide where you want to go. If you start preparing a road map before you know where you want to go, you can certainly get somewhere, but is it where you want to be?

The Journey
In the past every long-distance journey included the logistical challenges of the route, the means of transportation and the stopping points along the way. These journeys often included travel by foot, on horse, by sea, via stagecoach and later by rail. There were obstacles such as mountain passes, weather, bandits and local hostiles, governments and lack of accurate maps and clearly marked roadways. Many travelers actually blazed their own trails through uncharted wilderness. Some travelers were fortunate enough to have the means to enjoy faster, more comfortable accommodations while traveling, but the masses were required to endure hardships, danger and arduous journeys.

However, with modernization, we now take for granted the ease in which we can travel the world. We simply go online, book a flight, reserve a rental car and get road maps of modern named and numbered roads and highways to reach our destinations. There are standards for pricing and we have choices about the schedule, speed and luxury for which we are willing to pay. When we have a destination in mind, in reality there are very few considerations other than the price of the journey. This is the result of evolution combined with revolutions in the world of travel–the naming of well-traveled paths, the invention of rail and air travel, the careful and meticulous charting of territories, and the advent of standard security measures to keep travelers safe.

Unfortunately, today’s information systems have not advanced to the degree that travel has. Even with all of the technological innovation we rely on today, the journey to reach our destination more closely resembles the pre-modern era of travel. There are no standards by which you can schedule the journey toward the destination you have selected. There are no maps that you can refer to that identify your specific destination, no scheduled flights and no clearly marked roadways.

Many of the obstacles and dangers of today’s information system journeys are similar to those of the pre-modern travelers; even though we have all enjoyed the result of revolutionary technological advances, there still exist many uncharted territories, a lack of well-charted “roads”, bandits waiting to take your money, and a need for standard security measures. It is true that many organizations are striving to blaze trails, but you will likely find yourself in a position of finding your own way.

Your Itinerary
Once you have in mind your perfect destination, you will want to decide on your realistic expectations. How much are you willing to invest in order to achieve that destination, in terms of money, resources and time? Keeping in mind that “speed costs money, son,” how fast do you want to go? As you plan for the journey to reach this destination, keep in mind that this will likely not be as simple as booking a flight and reserving a rental car. It is not unusual to have a multiyear plan to define the roadmap for information systems.
In some organizations, the destination may be relatively simple–the installation of an excellent software product may be the perfect (or pretty darn good) solution. In those cases, the journey consists of the selection process and the implementation of the proper system, and the follow-through with the controls, processes and procedures. 

However, it is almost never this simple, as much as we all wish it were, and for the foreseeable future many organizations will need to chart their own path to achieve their desired destination.

Speed, Cost and Risk
Remembering that speed costs money, it is logical to make the assumption that the two factors are directly related. 
However, the relationship between speed and cost is a rule, not an absolute relationship. If you think about it, it makes sense that you can spend a lot of money and yet encounter many obstacles that slow the process. Also, it is possible to move very quickly and spend little (the CEO’s dream).

If this is not an absolute relationship, what does that do to the declaration of “speed costs money?” Is that just a high-performance auto part manager’s way of getting people to spend more money? To answer that question, let’s add another factor into the equation: risk. In the world of high-performance automobiles, it is not enough to simply go fast–you want to be able to control your vehicle and bring it to a stop on command. Going fast is relatively easy, but doing it safely requires additional considerations. In the world of business solutions and information systems, being safe is all about reducing risks such as overspending, inaccurate data, litigation, loss of revenue and customer loyalty and losing out on business opportunities. 

Why can’t we improve business processes quickly, at a very low cost? There are a number of reasons, including:
    •    Not sufficient time to adequately plan
    •    The use of inexpensive labor and/or products could yield undesirable results
    •    Insufficient time for testing, training and managing the necessary changes

The adage “you get what you pay for” is quite often painfully true. It is, however, possible to move quickly if you apply the appropriate resources (read as costs) to the effort. Therefore, moving too quickly without being prepared to apply the proper level of expense to an effort introduces a level of risk that every business should carefully consider.

On the other hand, the exact opposite situation carries an equal or greater level of risk. Moving slowly can have its advantages, but when combined with a high cost, the financial risks must be considered. In general, the slower you go, the better able you can be in controlling your costs. Therefore, if you are moving slowly at a great cost, you could be throwing money away. This is not unusual, however, typically due to lack of proper planning. Behind schedule and over budget is not a good place to be.

Business Opportunities
When you look at the high-risk zones, or more importantly the “safe” zone, you are still left with a fairly large window from which to make your decision about speed versus cost. Next, you need to consider the business opportunities related to your efforts. If you are missing out on business opportunities because of your current information systems, then you may wish to move more quickly with your desired changes. On the other hand, if there are no opportunities on which you are missing out, then you have the luxury of time on your side and you should be able to accomplish your goals less expensively. Consider this, however: if you are not missing out on business opportunities, then why do you need to make changes in the first place? Chances are that you need to make improvements to your information systems precisely because you are missing out on business opportunities. Better information systems could help you gain new markets, reduce expenses and better understand your data to improve efficiency.

Therefore, the assumption is made that there are business opportunities of which you wish to take advantage, which means you probably want to move quickly rather than slowly. (I have never met an executive who made a habit of saying, “take your time.”) You could consider the event of missing business opportunities another risk.

The next factor to consider is the stability of your approach toward the improvement of your information systems. No matter how careful you are and how many resources you throw at a project, higher speed naturally introduces instability, and in some cases impossibility. Consider the possibility of speeding up the gestation period of a baby to one month by impregnating nine women. There are some things that simply take time. Training, acceptance of and becoming accustomed to change, and purchases are all factors that are difficult to speed up. 

When attempts are made to speed things up faster than they should naturally go, this introduces a degree of instability. The graphic shows where instability appears on our chart. Instability is yet another form of risk. 

The Safety Zone
In reality, I cannot tell you exactly where on this chart you want to be. I can tell you where you do not want to be and that is in the corners.

Earlier you were asked to create an outline of where you want to be. Now you should decide how much that destination is worth to your organization. Can your business opportunities wait while you put the improvements in place? If so, you can select a strategy that includes lower cost over a longer period of time, while helping to ensure greater stability. Do you have serious immediate pain, or are you missing out on substantial opportunities? Perhaps you should be ready to spend more money and take greater stability risks, leaning heavily toward speed.

Draw a small circle on the chart to identify your strategy. Discuss this with your strategic team and get buy-in from all of the necessary players. Then when the time comes to spend the money and create the schedule, your organization will be prepared to spend the appropriate amounts and expect a reasonable schedule. If you selected a high-risk strategy, make sure that the people implementing the solution have all the management support they deserve and are not persecuted if issues arise during or after implementation.

Your Roadmap
Once you know where you want to go, how fast you want to get there and what level of resources you are willing to allocate, you will need a roadmap. Coming up with a roadmap is a unique experience for each organization, based on the risk/speed/cost factors and the destination.  Unfortunately, there are no roadmaps and very few well-defined territories in the world of business information systems.

There are software companies that offer suites of business products that are sometimes touted to be all things for all people, but in reality these products rarely take an organization to their destination right out of the box. There are some businesses that fall into a common mold, such as warehousing or light manufacturing, that can actually have all of their expectations satisfied with a single installation. But most organizations should expect to plan for an extended period of improvement in order to reach their destination.
This is not a plea to slow down, but rather a call to decision makers to understand the risk and cost involved with the prospect of speed. Speed costs money–no argument there. The next time you feel the need for speed, perform a self-evaluation to measure your readiness for risk and expenditure. 

Edwin A. Klein is the CIO of Royal Resorts.
©Hospitality Upgrade, 2006. No reproduction or transmission without written permission.



Geneva Rinehart 
Managing Editor 
Hospitality Upgrade magazine 
and the Hospitality website


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