The "other" Relationship Managements: Process, Supplier and Systems - By: Chris Hartmann - HVS Technology Strategies

There are two key starting points for any improvement effort. The first is defining key organizational goals for the entire effort. This requires some collaboration and documentation but ultimately there should be specific milestones. The second is to ensure that measurements (also called KPIs or Key Performance Indicators) are defined at each level (overall goals, functional area goals and individual project outcomes) for all components that are going to be tracked.

Overall goals could include: increasing profitability by 15% in each of the next three years, raising guest satisfaction from a 3.4 to a 4.2, or increasing the return group bookings from 25% to 40%. These goals must be realistic and if there are multiple goals, they should be weighted accordingly. As each improvement is considered, it needs to be evaluated against all of the organizational goals. You should also consider any constraints or limits on what you are willing to do to reach a goal. For example, many properties would find it unacceptable to increase profitability at the expense of guest satisfaction.

Defining measurements is important not only for those metrics which need to be improved, but also for any constraints and other tracked values that may be affected, positively or adversely, by these efforts. If your primary goal is increasing return group bookings, you may also want to ensure that the groups that return are the most profitable ones, or that transient business does not decline. Although it may be tempting to get started immediately, if you are not collecting data from the beginning of a project, and that data becomes relevant later, it may be too late to include it. On the other hand, as long as you have the ability to get the data for a past period, you don't have to include it in the analysis until it becomes clear that it's important.

Even for those properties that do not have the mindset to begin any kind of formal improvement effort, there are two fairly straightforward initiatives that will pay off handsomely in improved service levels, reduced costs and increased staff satisfaction, particularly in managing information systems. These are "Supplier Relationship Management" and "Problem Resolution Management".

Supplier Relationship Management begins when you purchase a software system, other technology, or even a non-technical product or service. It's particularly important for technology purchases when ongoing support and enhancements will be provided by the supplier. The first step is to assign at least two property-based people who are responsible for everything that occurs between the supplier and the hotel. Normally this would be a mid-level manager, backed up by a department head or GM. The responsibilities of the supplier relationship manager (SRM) for each supplier are:

• Contact the supplier to explain the SRM role and property hierarchy.
• Establish escalation procedures for any issues on both sides. The supplier should know the chain of command at the property and the SRM should know the chain of command for sales, support and corporate management positions at the supplier.
• Schedule regular conversations, either in person or over the phone to ensure that the relationship is maintained.
• Document all agreements, specifications, and issues.
• Communicate status from the supplier and serve as the main point of contact for other hotel staff.
• Coordinate all problem resolution, installation activities, training and support when possible (excepting emergency situations when the SRM is not available).

As tempting as it may be to make the SRM a technical person, this is not a good idea for several reasons. Firstly, the technical person is less likely to understand the staff needs and more likely to understand the challenges facing the technology provider. This often results in miscommunication between supplier and user. Next, the technical person is likely to be needed by both sides to help find and implement a solution or modification. Having him or her "neutral" will make this easier. Finally, when line managers are faced with technical issues, there's a temptation to say "I'll leave it to the IT guy because I don't understand any of it." That creates a huge dependency on "the IT guy" and a likely frustrating experience for everyone involved, including the users, the supplier and "the IT guy".

"Problem Resolution Management" is a framework for anticipating and dealing with problems that (inevitably) arise in all operational areas but again, is particularly important for technology projects. A key part of the process is a "disaster plan" which covers both major disasters (the hotel is forced to close for a period of time and reservations needs to remain open) and localized ones, such as the main application server disk crashes and has to be recovered from backup tapes. For both situations, the basic question, "How do we function without this system?" needs to be answered, with a list of possible alternatives ready to go. Naturally the details will depend heavily on the specific circumstances but after the hard drive crash is not the time to realize that backups haven't been done for a month or there is no printout of reservations for the next week.

Also within this effort is managing problems, issues, or new requirements within one system, technology or process. Normally, the sequence of events would be:

• Schedule a discussion with all necessary parties to define the issue in writing and propose a solution
• Assign a priority to each item so that the most critical ones are addressed first
• Get each major step in remedy along with due dates, dependencies, responsible parties
• Follow-up on the schedule, adjust as necessary, confirm with all participants
• Document each major decision, status change, and deliverable
• Provide periodic status updates on project to appropriate staff
• Once the issue is resolved, follow-up with those affected to ensure it's completed, then close it.

Normally the supplier relationship manager for the affected area should take responsibility for managing problem resolutions.

It can be tempting to bypass these formalities for some areas or some issues and even more likely that once a problem is solved, no one will want to bother writing anything down. These are both mistakes as small problems can sometimes mask larger ones and because of the nature of hospitality (many individuals doing the same tasks, high turnover, people coming up with their own creative solutions) patterns may not be obvious without good documentation and procedures.

Six Sigma, TQM and other improvement initiatives are wonderful at reducing errors and process times while improving efficiency and profitability. Without a successful means of dealing with problems, issues, and opportunities, all of which will inevitably arise, you will be forever doomed to fighting fires and jumping from crisis to crisis. Without a "destination", meaning well-defined goals, each group or individual in the organization must decide the value of their work, a situation which can leave the squeaky wheels slipping on all the oil, while others grind along the track quietly, but inefficiently.

Chris Hartmann
[email protected]
HVS Technology Strategies
420 Boulevard, Suite 203,
Mountain Lakes, NJ 07046
973-335-0871 phone/fax