In most hotels today, you can find the oldest software still in use in the finance department — and sometimes HR and purchasing. Why is this? There are a variety of reasons, including a simple lack of interest in making the necessary changes. Often these teams have built workarounds for their applications’ shortcomings, so they don’t perceive a need to change. For general managers and owners, these upgrades aren’t nearly as sexy as implementing the latest guest-journey applications.

Today’s hospitality-centric ERPs have made significant gains in features and functionality. Many have done this by leveraging application programming interface (API) connections and eliminating older export/import and file transfer protocols (FTP) for data transfer, thus providing real-time updates from all connected applications.

The finance and IT teams are often on the front lines of ERP implementations. That’s because, at their core, these applications are designed to facilitate the organization’s financial reporting while enforcing strong internal controls. While these groups’ leadership in these phases is critical, that isn’t the topic I want to cover in this article.

DIGITAL TRANSFORMATION BEGINS BEFORE VENDOR SELECTION

But instead of discussing what happens after implementation, I want to focus on what should happen before you select a new ERP. This step is referred to as Phase 0. It
involves the entire organization and ideally should take place before you even discuss potential ERP vendors.

In Phase 0, the organization needs to ensure alignment on vision and objectives across all areas, not just finance and IT. Optimizing your data flow is an absolute necessity, but what if the data being passed between applications isn’t complete? Phase 0 output should include a detailed roadmap for achieving digital transformation. This guide should address changes to existing operating procedures as well as providing a framework that includes an analysis phase to identifying gaps in application functionality. Think of it as strategic planning without any perceived barriers.

Here's a simple example. Let’s say the food and beverage (F&B) director has set a strategic goal of positioning the fine-dining restaurant as the preferred choice for the local community. They’ve completed the outline for a marketing campaign along with budget goals to increase local restaurant guests by 25%. The ROI on marketing expenses is acceptable based on projected additional revenue.

Everything sounds great until they realize they don’t have enough information on how many of their customers are staying in the hotel, how many are local residents, and how many are out of town visitors staying elsewhere to determine a starting point. Nor do their point of sale (POS) software and operating procedures offer a means to capture this data. Oops!‍

HOW TO BEGIN PHASE 0

For this phase to be successful, you’ll need a clear consensus that senior leadership endorses the process. You’ll also need someone to facilitate discussions and monitor progress. This might be a staff member or a third-party consultant; the key is providing the right amount of focus to keep the process moving forward.

Discussions with stakeholders for this phase should hit all levels of the organization, but it may be helpful to start with senior management, board members, and owners. Stephen Covey’s The 7 Habits of Highly Successful People reminds us to “begin with the end in mind.” It only makes sense to ensure that this important group of stakeholders currently receives the information it needs to support decisions and monitor the organization’s financial wellbeing.

From there, it’s time to meet with other departments. Participants may include managers, front-line staff, or other subject matter experts (SME). For instance, when meeting with the sales and marketing team, you’ll find it helpful to have participants from revenue management, front desk and catering. This allows for two-way conversations addressing sales data that operations needs and operations data that sales and marketing needs to meet the strategic goals.

The above example focuses on revenue generation and would also include aspects of knowing more about our customers. One of the most important parts of any strategy is going to revolve around your target audience, whether it’s leisure travel, business travel, or meetings and conventions.

Providing the right data helps validate sales and marketing initiatives and might help identify new or emerging target audiences. Online travel agencies (OTAs) are a great example.

Are you leveraging as much information as possible from these partnerships? Remember all those cut-rate, last-minute OTA rooms you received? Are they an overlooked target?

After revenue, you should turn your attention to expense management. This includes strategies to control cost of sales, inventory management, and employee-related costs. Many HR functions are part of an outsourced payroll solution, but you need to consider other aspects such as recruiting and onboarding. Fewer and fewer employers use paper applications and onboarding paperwork, which streamlines new hire data being loaded into timeclocks and the payroll application.

Engagement is key. Too many projects get introduced as a mandate after a small group of individuals makes a decision. Without taking anything away from that group’s relative expertise, it’s likely the results will fall short of a full transformation. You really need input from all areas of the organization.

QUESTIONS TO CONSIDER

Stakeholder conversations should focus on company vision and strategies. Each area has its own set of priorities, but to achieve organizational success they must be aware of other departmental priorities and collaborate on the best approach to mutually achieving success.

Consider these questions for Phase 0 conversations. The goal is to make sure all stakeholders think outside any perceived constraints in the current environment.

• What data do we need to support the company vision and strategies?
• Who needs the data?
• When is it needed and at what frequency (daily, weekly, etc.)?
• Does it exist in current processes and applications?
• How is it delivered?

WHEN TO START?

Now – before the budget process begins – is a great time to start, especially if you’ve scheduled any strategic planning retreats. If not, then getting started right after the budget has been approved can also work. The key is to let company strategies guide Phase 0 discussions. As you progress through Phase 0, begin to think how you can eliminate entering the same data into multiple applications. For example, automating the employee recruitment process means prospective new employees can enter their data one time. You can then transfer it directly to timeclocks, payroll, and so on.

Remember, Phase 0 is all about alignment with the organization’s vision and objectives. Once completed, the roadmap will help you effectively select and implement the right tools to achieve your goals. This step isn’t glamorous, but not taking it diminishes your chances for a successful digital transformation.