Hospitality software is constantly evolving and upgrading. As hotel requirements get more sophisticated, properties find it hard to manage with a simple property management solution. How does a hotel evaluate its need for a change in software? This article delves into and attempts to address some of these concerns.

In the last few years, the hospitality industry has been increasingly adopting technology. Hotel operations are getting more sophisticated as newer aspects such as energy management, quality management, manpower management and others are coming under its purview. Furthermore, hotel properties are getting larger and are often spread over multiple geographies. Technology makes these increasing number of hotel operations manageable and provides rapid and real-time visibility into hotel functioning. It also enables decision-making based on inventory, revenues, guest service and other factors.

Until recently, most hotels had to purchase specific software for each hotel operation such as front office, accounts receivable, CRM, HR and payroll, maintenance, and so on. Integrating these diverse third party solutions into a property management system (PMS) was a nightmare and most hotels ended up with a solution that looked more like patchwork. This led numerous hotel chains to invest in developing and customizing their own hotel PMS. However, with hotel operations getting more sophisticated and comprehensive, scaling up siloed solutions eg, -those incapable of reciprocal operation with other related management systems, can be both difficult and time consuming.

If you are a hotel with a homegrown PMS you could well be in for a challenge in this era of hotel ERPs and cloud based hotel management solutions.

Benefits of an ERP

• Information consistency and accuracy across hotel departments
• Simplified cross-departmental coordination and workflow execution
• Streamlined tasks, which frees hotel staff to focus on activities that require personalized attention
• Easier goal setting and monitoring of goal achievement
• Agile infrastructure that identifies and fixes problems rapidly

Do Hotels really need an ERP

Enterprise Resource Planning as a concept has been around since the mid-'90s and has been leveraged by several industries. An excellent tool to increase productivity, reduce operational expenses, improve information flow, and enhanced performance, it is only recently that the hospitality industry has been tapping into the benefits of an ERP solution.

Speed of action is critical in a highly competitive hospitality environment. Hotel managements need constant visibility into hotel operations, and a good hospitality software needs to be nimble. An ERP is a comprehensive hospitality software, that has a single database and can be seamlessly accessed across departments.

The advantages of a single integrated solution are:

• Investment in single server to run application
• Investment in single software license
• Does away with dedicated IT personnel to manage ERP
• Maps entire hotel operations in an efficient manner from financial accounting, inventory, payroll, supply chain management, production planning, CRM etc
• Cost effective

A hospitality ERP is an advanced version of a PMS, designed for data to be entered at a single point and that can be accessed by managers on the go.

Difference between PMS and ERP

PMS

• Large application that is cumbersome
• Error-prone as information moves from one department to the next
• Labor-intensive, with extensive manual processes that can drain both time and money
• Requires interacting with multiple vendors for different point solutions

ERP

• Allows for hotel to interact with single vendor, as there is a single solution for multiple operations
• Fixed costs which are more manageable

Barriers to ERP Adoption

While hospitality ERP is growing in popularity, the gaming industry has been slow at adopting this option. Cost seems to have been a major deterrent, however, the more plausible reason is the fact that an ERP needs customization to fit the niche needs of gaming. For long, the sector has used best-of-breed solutions from multiple vendors and customized these to their needs. Doing away with these siloed solutions and replacing it with a single ERP requires time in terms of migrating legacy data, customizing the solution to one's needs and of course training staff on use of the system. Numerous hospitality properties feel that since they have invested much time and money customizing their software, they should use it for as long as possible with minor upgrades. Others feel the process of moving to an ERP would be time consuming and take them away from their core business focus. With the current economic uncertainty, most hospitality establishments have also become reticent about investing in new technology.

However, what most hospitality properties fail to realize is that a hospitality ERP has numerous benefits compared to a PMS, especially for automating increasingly complex tasks, providing rapid visibility into hotel processes and integrating processes to curb revenue leakages. The key to migrating to a hospitality ERP efficiently and smoothly is to find the right partner who has deep domain expertise and can make this process rapid and hassle free.

Is it time for your hotel to invest in an ERP?

If all the departments in your hotel work independently, you have hired a full time resource to generate operational reports and are still unable to quickly access a comprehensive view of your hotel's functioning, it just might indicate that your hospitality property is indeed ready for an ERP.

However this brings us to the million dollar question. How do you identify the right ERP solution for you?

The demand for ERPs is growing, and the market has a host of options. It is important to remember that installing a Hospitality ERP is only the beginning of the process. Migrating legacy data, training hotel staff on the use of the software and actually experiencing Return on Investment (ROI) is where the challenge lies. Unless you have an extensive technology background, these issues can leave you bogged down for months.

• How many hotels has the ERP been installed in?
• How long has the ERP been in the market?
• How long has the ERP provider been in the market?
• What are the hospitality segments in which the ERP has been installed?
• Has the ERP been installed in your market segment?
• How easy is it to customize the application?
• How long does it take to install the application?
• Will it be possible for legacy data to be migrated into the ERP and how long will the data migration take?
• Will the ERP provider train your hotel staff post installation?
• Is there post sales support for the ERP?
• Is the ERP covered under an AMC and what will it cost?

Each hospitality segment has its niche needs, for example, an airport hotel will bill guests differently from a beach resort. A cruise liner will have different departments compared to a spa. Raising queries related to your niche hospitality segment are vital.

Lastly, get your ERP vendor to give you a detailed demonstration of the product. You might even want to install a trial version of the ERP on your premises and get senior management from each department to browse through the modules they will use, and test for usability. Also test interfaces to ensure they are user friendly and intuitive. Another vital aspect that hotels need from their ERP is business intelligence. Test the ERP's reporting system, ensure it is able to drill down and deliver detailed reports so you can quickly access insights into hotel operations.

Choosing the right ERP can take time, and considering the cost and time investment it is best to choose the right ERP with caution, care and thought. After all, you will probably have to live with the ERP for a good number of years.

Installing an ERP is only the beginning of a relationship you will initiate with your ERP provider. Reach a comfort level with your provider, determine that they understand your needs and are able to deliver on your expectations.

About IDS Next

Founded in 1987, IDS Next became India's largest hotel software company in its first decade of operations and Asia's largest in 2009.

Today, IDS Next is the leading provider of smart hotel software across Southeast Asia, the Indian Ocean, the Middle East, Africa, and Oceania, serving over 6,000 customers in 45 countries with $10 million in daily transactions and 300,000 daily check-ins.

With the goal to redefine the way hotels operate through smart software solutions, IDS Next has been a trusted technology partner and preferred supplier to the international hospitality industry.

From contactless check-in, front desk, guest request and housekeeping management to payroll, finance, inventory management and procurement, IDS Next's award-winning software automates and streamlines front and back-office hotel operations, making sure all departments are covered.

With an open API approach, IDS Next integrates with over 100 of the world's leading, best-in-breed technology partners to ensure hotel operations run smoothly and securely to complement a hotel's existing systems and solutions.

Available in single modules and as an all-in-one solution, IDS Next's smart hotel software is designed by hoteliers for hoteliers through the company's in-house development team comprising 135 hospitality technology professionals and supported 24/7 by 90 customer services agents in 30 languages.

With all software PA DSS certified, front-of-house solutions GDPR compliant, and the business ISO 27001 certified, IDS Next's smart software solutions are accredited, certified, and compliant with the industry's most stringent standards for data protection and security.