hospitality technology made simple

May 15, 2009

htms has moved back to blogger

Filed under: Uncategorized — kevinsturm @ 10:01 pm

Here’s the deal…

A few months back I switched this blog to WordPress from Blogger. I felt the UI for WordPress was better as well as some of the other stuff they offered. What I did not account for was my free blog was no longer free if I wanted to republish the layout with some customizations. For that I had to purchase WordPress CSS editor…LAME!  So I’m back to Blogger with a new layout and new RSS feed. For the 5 of you that actually read this blog sorry for the confusion. But you can now go here to read my blog and I promise I’m there to stay.


April 15, 2009

New Digs

Filed under: consulting — kevinsturm @ 9:03 pm

kevin sturm Consulting has been updated with a really awesome new site.  Take a tour and you’ll see what I mean.  I think the new site expresses what differentiates my consultancy.  The bottom line of which is “I am my brand.”

kevins turm Consulting

When a company selects my firm to advise them on a technology solution, they get me…not just the business part of me, but the whole part.  All my passion and all my enthusiasm.  My passion for technology, and travel, and great customer service can’t be separated from my passions about living life to the fullest, loving my family, and helping others.  Without my other passions, my company is just like any other company…simply someone trying to make money.  But I think (and hope) I’m more than just that.

My company is the avenue that allows me to live out my passions:

  • Spending as much time with my family as possible
  • Using my knowledge and experience to help others be more successful
  • Creating freedom in my life to do the things I love to do
  • Traveling…both for work and pleasure
  • Being directly involved in technology and how it can change our lives for the better

I am my brand, and it became important that my website reflect that.

Thanks to the genius of a few folks over at Showit Sites, I was able to build this site myself WITHOUT ANY HTML coding.  Given the current economic conditions I have to say saving the dinero on a web developer and graphic designer was a huge help.  If your a consultant and wishing your website better reflected your brand, better represented your company, and allowed you to update it on a regular basis then go download Showit Sites.

Make sure to use the promtion code “SIMPLE” to get the first two months FREE.  And if you have any questions email me because I’d love to help you get you started in building a site that matches your brand and simplies your life.

February 5, 2009

sweating the small stuff – part two (lowering your Cash Cost)

Filed under: integration,loyalty,PMS,POS — kevinsturm @ 8:03 pm

I frequent this site to keep up with who is doing what, where and when in hospitality.  I’ve found about half the content recently is either economic-doom-and-gloom or hopeful-economic-optimism.  So which is it?  If you’ve come to this site to find the answer, I don’t have it for you.  Sorry…

What I do have are tips on how to optimize your existing technology solutions to either increase profits or decrease costs.  Today we are specifically focusing on lowering your Cash Cost.

Cash Cost is inclusive to each area your business incurs a cost in receiving cash.  This includes cash accountability on the part of the employee and cash accounting on the part of management.  Multiply this process for each individual employee that accepts cash and your Cash Cost can get expensive.

The prolific way to eliminate this cost is to go cashless.  Many venues across the hospitality space have adopted this model: such as this one, this one, this one, and this one.  But getting completely cashless requires cash, sometimes a lot of it.  Instead, let’s look at some small ways you can alleviate Cash Cost.

prevent cash theft

Most POS systems (probably yours too) have built in cash accountability to help prevent theft and cash counting errors.  The first step in taking advantage of this is to ensure your employees are not sharing POS User Accounts.  My experience is if employees get to share accounts, there is a good chance they have also get to share in an ” unofficial” employee bonus pool.  Second is to require employees to enter a Cash Drop at the POS.  (Whether this is a blind drop or a not should be based on your business requirements and employee job function.)  Requiring a cash drop allows the management staff to review system reports that highlight over/short employees saving time by focusing first on the problems.

increase credit transactions

Increasing Credit Card transactions is a good way to decrease Cash Cost (and is a type of cashless payment), but you need to do the math for it to make sense.  Getting the most from your merchant services provider requires transaction volume and aggressive negotiation.  If you are not sure about how to go about negotiating your fee contact a company like this that does it on your behalf and gets paid based on your savings.  To make any meaningful savings here you should also have a software based payment solution integrated with your point of purchase system(s).

The best way to increase credit card transactions it to market it, but you also have to incentivize the consumer.  This can be implementing a no-signature transaction policy (moot if we ever migrate to EMV) or joining programs that encourage customers to pay with their credit card (i.e. here and here).

implement gift cards

Offering gift cards creates the opportunity to decrease Cash Cost and encourage customer loyalty.  However, this is the type project where scope creep can kill the initiative so be conscientious and realistic in defining what you are going to implement.  There is a very good chance your point of purchase system (PMS, POS, etc.) or credit card solution offers or includes a gift card solution.  It will most likely not offer all the bells and whistles of this or this or this, but the goal remember is to initiate low cost steps in decreasing Cash Cost.

customer account integration

This is an often overlooked but simple option to move in the cashless direction.  Additionally, this option has the HUGE upside of tracking your customer’s purchase habits.  Again there is a good chance also your existing point of purchase solution some sort of customer account charge.  For larger venues the better option is to implement an integration between the point of purchase system(s) and the customer account system(s).

The basis of this solution is an interface from your POS system to your customer account(s) system.

Property Management System to POS:  guest transactions are paid with a room key and/or name
Membership Accounting to POS:  member transactions are paid with a membership card and/or name

As with automated product/item depletion there is a very good chance your vendors already have the interface in place, meaning you can implement it with a minimal investment.

currency counting integration

If you handle enough cash to use currency counting machines another interesting option is to investigate an interface from the currency counting solution to the POS.  I have only seen this integration implemented a few times, but it has proven to be a highly cost effective solution with a convincing ROI.  It usually is accompanied with a higher investment cost however as this type of interface is generally custom integration that uses the POS Accountable Cash data, POS Cash Drop data, and Cash Counted data consolidated to a single report for simplified cash accounting.

If you have someone on the payroll that has the sole duty of counting cash and reporting discrepancies, this is probably a worth while option to investigate.

Obviously this list is not comprehensive, but hopefully stimulates some ideas.  If you have successfully implemented other options or have other ideas post a comment and share your knowledge.  In times like this it is worth it to share our experiences so we all come out ahead.

For more information about kevin sturm Consulting please visit my website or email Me.

January 24, 2009

sweating the small stuff – part one (automated inventory depletion)

Filed under: hospitality technology,integration,inventory,POS,software — kevinsturm @ 1:05 am

For whatever reason when revenue is up venues have the tendency to not sweat the small stuff.  I guess it’s because the small stuff doesn’t amount to much when focusing on the big investments.  But when revenue is down it’s time to look closely at where your staff is spending their valuable time.

The next few posts will be dedicated to the “small stuff”.  Each has a minimal time and dollar investment with a quick ROI.

automated product/item depletion

Manually entering inventory depletion should only be necessary if you don’t have a PC based POS solution (and even then it may not be required).  If you do have a PC based POS solution (and who doesn’t at this point) then now is the time to link the two system.

A basic overview of this interface is the POS system exports a text file (formats can vary) of product/item depletion.  This file is then used by the inventory management system to decrement inventory amounts.  A key prerequisite is a “Common Numeric Identifier” for each product/item that is shared; this is generally the SKU number.  Chances are good the vendors you use already have a functional interface, and it’s highly possible getting it turned on won’t cost you anything (except maybe vendor support fees).  If your vendors do not have an established interface you have a few options

option one
The first option is to work with one of your vendors to write a utility that meets the specifications of the other vendor.  For example, your POS vendor writes an export utility that produces a file matching the import specifications of your inventory control vendor.  Or, the inventory control vendor writes an import utility that uses the file format provided by the POS system.  Most vendors have vast experience with this option, as it is the most common and generally preferred solution  But, the price of this method can vary drastically among vendors.

Pros:  vendor supported interface, highly scalable for large volumes of data
Cons:  vendor may charge high price for development, any future changes to the interface require vendor time line

option two
The second option is to use a middle-ware utility to convert the standard POS export format to the standard import format for the Inventory Control system.  There is a multitude of middle-ware applications available allowing someone with development experience to accomplish this.  They range from free-ware applications to highly scalable solutions like Microsoft Biztalk.  Be careful however as the price of this option can unexpectedly creep as interface iterations spiral out of control.  The advantage is the opportunity to use the middle-ware application for other integration projects.  The important point here is data mapping.  Incorrect data mapping will lead to incorrect inventory depletion.

Pros:  scalable for large volumes of data, use middle-ware software for additional interface engines
Cons:  requires development experience, possible high cost of software and development

option three
The third option is to build a conversion utility with scripts, macros, and/or batch files. This process generally involves utilizing MS Excel and Visual Basic for Applications (VBA).  I would only recommend this option when working with small volumes of data (no more than few hundred lines of data per executed export file) and when manual validation of the process regularly can be performed.  Most IT resources (especially if they are a recent graduate with an computer related degree) have the experience necessary to build these utilities.  The important piece here again is data mapping.  Incorrect data mapping will lead to problematic inventory depletion errors and generally non-descriptive and unhelpful error messages produced by Microsoft.

Pros: internally owned, can quickly be implemented, low cost investment
Cons:  internally owned (yes it can be both), not scalable for large volume of data, high chance of failure

reviewing your ROI
To calculate your ROI estimate how much time is spent reviewing sales and product mix reports and how much time is spent entering depletion into the inventory system.  For convenience use monthly estimates.   Next, calculate the Estimated Monthly Task Cost of this process using the hourly rate of employee(s) performing the task.

Estimated Monthly Task Cost = (time reviewing reports  X  hourly rate) + (data entry time  X  hourly rate)

Based on which of the three options you choose to implement calculate the Total Project Cost.  If your vendor charges a recurring support fee for the interface in Option One, don’t forget to include that in the Total Project Cost.  Also, if you choose Option Two and pay for a recurring support fee for a middle-ware application don’t forget to include that in the Total Project Cost. (If you plan on using it for additional projects you may want to only include a fraction of the support fees.)

ROI = Estimated Monthly Task Cost / Total Project Cost

This is how long in months it will take you to recoup the Total Project Cost, allowing your employee(s) to focus on other revenue generating activities. You may even find your ROI is less than one month!

If you don’t have the experience or time to implement this interface give me a ring, I’d be happy to help! 😉  But don’t forget to include the cost of the consultant in your Total Project Cost.

If you are wondering about an integration capability post a comment and I’ll cover the details in a future post.  Even if you think it is probably not possible, it may be.  I’ve seen a parking garage gate interfaced to the POS cash drawer…so almost anything is possible.

For more information about kevin sturm Consulting please visit my website or email me .

December 4, 2008

information entertainment gets healthy with an Apple a day

Filed under: find out about,hospitality technology,in-room technology,software — kevinsturm @ 8:55 pm

I did an interview with Josiah Mackenzie on his Hotel Marketing Strategies Blog. In the interview Josiah asked me a question about how information entertainment is changing the guest experience, with specific reference to Microsoft Surfaces. I think Surfaces is cool, but I’m not convinced it’s functional at the current price point (check out the full interview here). His question prompted me to do a little more research on some rumors about Apple’s move into hospitality.

I liked these rumors for two reasons. First, Apple already has guest experience nailed. If you doubt me spend some time in an Apple Store. From architecture, to music, to hands-on-play, to service Apple knows how to manage the guest experience. Second, I’m a tech junkie and an Apple lover (both the mac and honey crisp kind).

What I found really excited me…. I may book a trip just to experience what I saw. Apple has partnered with Nanonation to provide some seriously awesome digital media content to guests. Most of their website revolves around digital signage, but via Apple’s website you can register to watch a demo on how they are changing the face of in-room entertainment. And this isn’t future in-room entertainment, it shows what is available now!

To get all the nitty-gritty details you really need to watch the presentation. You can do so by going here and then click “Watch the presentation”. That will take you through a series of steps to register your info with Apple (you will need to setup an account). There is a also a single page pdf you can download here.

if you don’t have time to watch the video here is my synopsis of the benefits.

  1. A really awesome graphical user interface that is very easy to use, allowing your guests to buy services, research local attractions, and all the while allow you to store their search information making their future searches more guest-centric.

  2. Through use of the Mac mini (a 6 x 6 x 2 computer) you can use the LCD HD TV that most likely is already in the room. And you get the awesome Apple Care warranty option. This also means the hardware and software platform for your In-Room Entertainment is the same as for your Digital Signage in the main areas.

  3. The potential benefits of how this technology will migrate to the iPhone and iTouch is SWEET! See your entire schedule and be able to book reservations for any hotel amenities on your iPhone through an app that integrates with your room details.

  4. Very intuitive and highly functional interactive channel guide for TV viewing.

  5. A movie guide that is more advanced than the current solutions you generally see in hotel rooms, offering more flexibility and a richer user experience typical to that of a Mac.

If you’re interested in implementing a new and different in-room entertainment or digital signage solution give me a call. Together we can find out of this solution is right for you.

For more information about kevin sturm Consulting please visit my website or email me.

October 9, 2008

kevin sturm Consulting

Filed under: consulting — kevinsturm @ 10:05 pm

Okay, so it has been AGES since I’ve posted here. But I wanted to announce the launch of my new website! There is still some stuff I need to include, mainly client details…those are going to take some time as I need to get approval from clients for the images and text.

But thanks to my buddy DJ and the Showit Sites team I got my new site up. DJ and team created one of the coolest new website design products out there. It allows somebody like me who really is not all that creative nor has html coding ability to create a pretty HOT website. So, when you get a chance check out my new digs over at kevin sturm Consulting.

If you are intersted in getting a site like this setup email me and I’ll send you a promotion code for your Showit Sites subscription.

May 1, 2008

mail call…what’s the scoop on SaaS solutions?

Filed under: evaluation,PMS,POS,software — kevinsturm @ 6:01 pm

I received an interesting email a while back from Carson Mehl at Lumiere Hotels.

“I am curious to know if you have heard of any robust hotel software being developed that is web-based. Our company has started using a number of web-based software solutions such as Google Docs and Basecamp by 37signals and they have been a huge asset as far as ease-of-use, collaborative ability, and no-need for extensive/expensive hardware. The great thing about web-based software is that it all operates inside the browser so it can be easily accessible from a number of devices.”

Regrettably I was not able to point to any truly web-based solutions that I felt would meet the needs of a boutique hotel group. There are a few out there but none that I have extensive experience with or have been impressed with.

What Carson was really asking is why hasn’t a hospitality technology vendor come up with some true SaaS applications that fulfills the requirements for a boutique hotel or resort location? For those that are not familiar with SaaS it means Software as a Service. Wikipedia defines it as “…a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it. They use it through an API accessible over the Web and often written using Web Services or REST.”

In our email conversation Carson was good enough to expand to what hoteliers are looking for…

“…The newest evolution of internet browsers and runtimes like Adobe AIR are really opening up the possibilities for rich internet applications. Applications like Google docs, basecamp, ZOHO, buzzword (my fav), even Facebook that are stored in the cloud and accessible from anywhere, offer such an advantage. The ease of collaboration they provide is alone and tremendous improvement on traditional software not to mention the accessibility factor, ease-of-use, elegant design, and simple hardware requirements. I do not have super-deep ranging experience with hotel software, but what I have used is far short of what is possible today.

From an hotelier’s point of view, I see a demand for a well designed software platform that is easy to use and is far reaching ie: pos, pms, booking, web-booking, reporting, etc. What is currently available in this regard is very expensive and complicated from both a hardware and software standpoint. The existing platforms work well for companies with deep pockets, IT experts and central reservation departments…

I guess the dream software would provide seamless connection between web reservations, pms, and the gds. It would allow an administrator to provide different levels of access to employees. It would automatically create and update guest profiles. It would show activity feeds for a property (similar to a facebook newsfeed, but showing reservations made on the web, pms, or gds, and more). It would be dead simple to use. It would look elegant. Training would be obvious and intuitive. It would be a subscription based service or maybe annually licensed. The system would be complete so there wouldn’t be any interfacing problems between disparate types of software. All the data is indexed and searchable. Reports are automatically generated and distributed. Data is backed up securely. The software works in multiple languages. Software updates are seamless, because it is web based. Housekeeping could carry around a tablet pc or iPod touch and update their room list. Guests could check out from their tv or laptop. The list goes on and on. It may seem like a pipe dream, but I think it is a possibility especially as we are reaching the age of ubiquitous internet connectivity.

From a software company stand point I think there is demand for such a service. It might be a long long time before a large hotel company would make the switch but there are so many independent and small hotels for which this service would be a blessing. In addition, if the service was successful the access to data would be invaluable.”

I thought the question was a good one and the desires well stated. So the question stands to why are there not more SaaS applications for hotel/resorts?

In my experience the main reason has been a data access issue. For pure web based applications the data is held (and often owned) by the vendor. Data security standards and PCI regulations make it difficult for vendors to effectively and affordably deliver on the needs of a hotel/resort. PMS, POS, and GDS solutions are generally considered mission critical to the business. If you don’t have immediate access to the data then you cannot run your business successfully which often means inconveniencing the guest. And unless a company like Google with an almost infinite budget for infrastructure redundancy and fail-over brings a solution to the table the costs of effectively delivering a solution like this appears to be too high for a start-up looking at what is really a limited market (unless some of the larger brands like Hyatt, Hilton, and Marriott joined in).

Ultimately I hope I’m wrong because I believe we need this. A corollary could be made to what people thought about CRM solutions until rocketed to uber-status of success and took over that space as the darling of the market.

If you know of a SaaS POS, PMS, GDS or other hospitality technology solution leave a comment as I’d be interested to find out more about them. Or if you have other thoughts on this topic post a comment and share your wisdom.

April 24, 2008

best-of-breed or one-stop-shop…what’s best for me

Filed under: evaluation,hospitality technology,selection,software — kevinsturm @ 10:30 pm

For many this debate is a philosophical versus empirical one, but it is worth a discussion I think. It is almost impossible to set aside the philosophical side of the debate (i.e. those that hate strongly dislike big business), but I’m going to do my best based on my experiential side of the debate. In starting this post off lets take a moment and clarify what we are talking about.

“Best-of-breed” vendors generally provide one or two technology solutions. They are 100% focused on these products and are thus considered to have more expertise in the needs of their customer (a debatable concept). Generally they are also considered to be more agile because of this focus (or so they say), allowing them to respond to development requests in a shorter time frame or at least with a more predictable software release schedule.

one-stop-shop (aka integrated systems)
(Pretty self explanatory I think) The Wal-Mart of technology vendors. They can fulfill most of your major technology needs and some of your minor ones as well (or so they claim). Generally they are very large organizations that offer products to a wide range of vertical markets. For this reason they are considered to have less knowledge of your specific operation (a debatable concept). Their release schedules tend to be further apart, but they also tend to perform custom work more willingly (possibly because of a larger resource pool) (also a debatable concept).Now that we are all on the same page lets talk about how to sort through the question, “What’s best for me?” First, for the purposes of your time and my own sanity I’m not going to attempt to categorize all the vendors for every technology solution. It’s almost impossible given the new companies that pop up semi-regularly and more importantly with the disappearing act by many of the formerly named best-of-breeds recently gobbled up by the one-stop-shops. And that quickly then brings me to the point…best-of-breed or one-stop-shop labels are a useless and very stupid business requirement when selecting your technology solution. It might have been a semi-meaningful requirement five years ago (of even two years ago), but not anymore.

Now, I’d like to just end here and have you believe me because I say so…but the probability is some of you reading this are staunch believers that best-of-breed or one-stop-shop is an important requirement when selecting a technology vendor. The rest of this post is dedicated to you. If you agree with me I’d love you to post a comment on what experience led you to the same conclusion. Below are some of points based on my experience, and why they are pointless when made as general statements.

ease of integration
This is one of the biggest points in the debate, and is often touted by the one-stop-shop as a major reason to chose them. But before you buy look closer, talk to existing customers, and make sure that this is really true. As with anything in technology your plug-and-play solution may leave you hanging. At face value it seems logical.

A single company can get their products to interface and integrate easier/better than different companies.

But changes in technology, the ever shifting product road map, and the acquisition engine proves in reality they most likely are not so integrated.

Most one-stop-shops did not start development of their products at the same time, which can mean the technology platform between the solutions is different (sometimes drastically). This can lead to some interface challenges that are often only overcome with limitations (and you end up with multiple technology platforms). The number of products gained through acquisition and the time frame of those acquisitions is also a good identifier for how seamlessly integrated a one-stop-shop is. My experience has led to the conclusion that the integration capabilities post acquisition is about the same as when they were different companies. Existing customers have lived with the limitations before the acquisition for years, so it is easy for a vendor to rationalize not making it a priority to enhance integration.

The willingness of one-stop-shops to work with other vendors is also a point to consider here. Where generally best-of-breed vendors thrive off partnerships with other vendors, the one-stop-shop may create integration road blocks. After all, it is in their best interest for you to purchase all of their products.

Now in fairness to the one-stop-shop I suppose I also need to point out that best-of-breed vendors also make this claim by touting their agility to enhance the product quickly. In some cases this is probably true. But do not be easily mislead. As a customer you want to be wary of this promise, because if it is being made to you it is also being made to someone else. You want a vendor that has a well established software development life cycle (SDLC) so they already (or at least should) have the next two to three versions of the product planned out. First, this means that new development probably cannot make it into the next scheduled version. Second, it means that your requested enhancement can easily be trumped by promises to the next customer. The temptation for best-of-breeds to “follow the money” is often too tempting and promises become easy to break.

Rather than basing your decision on claims to ease of integration do your research to document your requirements with order of priority. Select a technology solution based on your clearly defined and documented integration requirements versus claims to ease of integration.

small size = better relationship
I’m going to pick on best-of-breed vendors here. One of the claims made by best-of-breed vendors is their smaller size lends to a better vendor-client relationship. They claim to support their product(s) better and establish better relationships with their customers because of their size. Who made the rule that to be nice to work with you have to be small? In my experience a good vendor relationship is grounded in the type of people versus the size of the company.

As a side note it is too easy when choosing a technology solution to let your sales person do all the selling. And that seems logical…but your sales person is not who you will be talking to on a daily basis. You should be meeting with the group of people you will be working with regularly. If you will be assigned an account manager then meet that person. You should also speak with installation, support, and the person that handles billing disputes. Interview them because how they respond will give you a very good idea of what it will be like to be a customer. This group will often not have the skill or desire to “sell you”, so they will act just how they act every day.

Nice dinners and golf outings are great, but I bet you would give that up for a support team that is knowledgeable on the product and a finance team that is pleasant to work with. Select a vendor based on their reputation in the industry and the people that you meet, not on the assumption because they are smaller they will be better to work with.

single support entity (aka one person to yell at)
The “one person to yell at” claim is generally made by one-stop-shops and it has some validity. It can be very useful to have a single point of contact for resolving problems with your technology solutions. But this is only a reasonable point if the vendor is responsive and helpful when you yell. If you already read the comments under ease of integration and small size – better relationship you should foresee the coming point.

Having multiple vendors that are very helpful and nice to do business with will always be better than a single vendor that is difficult to do business with. Base your technology decision on who you believe will offer the better support not based on the number of 800 numbers you have to tape by the phone.

in your back yard
This is one of those funny requirements that venues seem to think is a great benefit when choosing a technology vendor, and that technology vendors tout as a major benefit to the venue.

If the vendor’s corporate office is close they will be more helpful and technical support staff will be available to swing by your property on a regular basis!

Unfortunately this is usually not accurate whether your vendor is a best-of-breed or one-stop-shop. If you yell loud enough and long enough they will send someone, but that is true if you are around the corner or across the country.

The vendor is not staffed to be at your beacon call and you will often get the freest resource (read least experienced) when you do need someone. If there is a big enough problem they will send someone regardless of where you are. In my experience your vendor’s proximity to your physical location has very little to do with the quality of support you will receive.

Additionally, as a venue be wary of the in my backyard vendor. You have expectations but so will your vendor. You’re site will become a frequent stop for sales calls, sales meetings, prospective customers, prospective partners, and bleeding edge technology solutions.

In summary if you choose to do business with a technology vendor because they refer to themselves as best-of-breed or one-stop-shop you will stand to be disappointed at some point in the future. It is naive to assume that your best-of-breed company is not looking to expand their product suite through “build it’ or “buy it” plans. Even more likely your best-of-breed company is continuously being courted by one-stop-shops and will eventually marry for money (a poor relationship foundation by the way…in life and business). But for many that is goal. Build a company so that it is attractive enough to a potential suitor to sell and retire in the Caymans? Can you really blame the owner(s) for doing what almost every entrepreneur dreams of doing? I think not, so stop treating your vendors as if they were different than any other company with a different goal than your company. And for the one-stop-shop vendor the reality is they are generally not quite as seamlessly integrated as they proclaim.

The bottom line is hospitality venues did not coin the terms best-of-breed or one-stop-shop. They are terms creating by the vendor’s marketing departments and ultimately should have little bearing on your technology decision.

Comment if you agree or disagree, I would love to hear from you. And as always, if you’d like to find out more about kevin sturm Consulting please visit my website or email me.

Pictures courtesy of DWQ, Crawfishpie, Dzwjedziak, Extra Medium, katiebate

April 17, 2008

the negative value of negotiated services

Filed under: evaluation,hospitality technology,selection,system replacement — kevinsturm @ 11:27 pm

Normally I spend Thursday writing a post for htms, but today I spent it speaking at Santa Barbara Culinary School. I got to speak for a short while to the next group of leaders in the hospitality industry, which is always really rewarding. It was a great event hosted by the HFTP CA Central Coast Chapter, AND we had a great luncheon speaker in Bob Hazard (former CEO of Choice Hotels). I hadn’t even looked at who the lunch speaker was so I was stoked to have such a huge name in hospitality. I also found out he is now the CEO of Birnam Wood Country Club just down the way. So COOL…

Anyway, since I was not able to spend much time writing I thought I’d shoot a quickie out about negative negotiation. If you’re in the middle of purchasing a technology solution, or planning on it, it is likely that you have spent some time negotiating price with your vendor. If you are not, or have not planned to negotiate price you will probably pay more than you need to. Vendors expect price negotiation to occur and for that reason generally have decided on what pre-valued discount they will offer before they even meet with you. So negotiate away. But, there are areas of your purchase you should negotiate price and those you should not.

DO negotiate on hardware costs
Your prospective vendor has a price point for their hardware product(s). If a customer buys it at full price then they make great margin. But they expect that you will negotiate the price, and you should. Hardware is a fixed deliverable. You get the same hardware whether you get 0% discount or 50% discount. So negotiate and get a great deal. As a side note, end of quarter and end of year are great times to negotiate price with your vendor because they are pushing to meet quarter or year-end revenue goals.DO negotiate on software licensing
In the same vein your vendor has a price point for software licenses. Regardless of how much you pay for that software you get the same thing. If you negotiate a great price then you get a great price but the same product…great for you. The quarter and year-end purchase applies here as well.

DO NOT negotiate on services
I see this time and time again with customers where the quantity of services or total dollar value of services was negotiated down. DO NOT negotiate on services, because the old adage “You get what you pay for.” applies here. Your sales person may try to make services the first place they negotiate on your order, and ultimately you don’t think you care…but you should and you do. Often a sales person tries to cut services first because they are commissioned less or not at all on services revenue. Discounting hardware and software lowers their personal income, so discounting on services means they might not take an income hit. But discounting services will have a huge affect on your project!

The concept is simple really. In my experience almost every vendor quotes services accurately to what they believe it will take to do the project successfully. Services numbers are usually made up by the services group. Discounting or lowering this number may get you a lower price point, but it also means that the services group is doing the project for less than they think it will take. So you get one of two outcomes. One, you get a Change Order Request from the project manager after work has begun and pay the higher amount anyway. Or two, you get less or often poor service leading to struggles in the implementation and support of your technology solution.

Comment if you have a story on how discounting services hurt your project. I would love to hear from you. I’d also like to hear from you if you think I’m wrong. And as always, if you’d like to find out more about kevin sturm Consulting please visit my website or email me.

April 10, 2008

the pending death of "pay-as-you-surf" internet

Filed under: hospitality technology,reasonable rants,travel — kevinsturm @ 10:47 pm

FREE or pay-as-you-surf Internet in hotel rooms is a hot topic in hospitality conversations right now. So like any good sheep I’ll follow and give my two cents. If you read this blog regularly you know I’m a big fan of FREE Internet. I believe with an unwavering constitution that Internet in your hotel room should be FREE (read this post to understand my stance). It’s my technologically advanced right! I deserve FREE Internet! I HATE paying $9.99 when I want to get online…but I’d happily pay $15 to not care if I was paying $9.99.

I’ve had dozens of conversations about this topic, and inevitably there is someone making it out to be a complex issue that has many different factors contributing to if a hotel provides FREE Internet. I hear them, but to them I say Bologna! (pronounced ba-low-nee for those who speak no French) Lines have been drawn and there are three camps when it comes to “how should a hotel recoup costs for providing web access to customers”.camp #1: the money-grubbers
I think that title says who this camp is. This camp believes vehemently that Internet access is not an inclusive service and should cost extra. They love the additional revenue pay-as-you-surf supposedly proves to generate and are not willing to discuss the possible or plausible revenue benefits of inclusive pricing and better customer satisfaction. This camp should be forced to pack up their tents one week per month and work from hotels that do not offer free Internet. Or, everyone in this camp should be forced to pay for Internet access by the day, hour, and minute at their normal work place and then be forced to submit justification with the receipt on what they accomplished during those charged Internet hours. Or, forced to pay for it out of pocket like the thousands of entrepreneurs who don’t get to “expense” Internet access and feel nickle-and-dimed by the pay-as-you-surf camp.

camp #2: the corner drug dealers
This camp is like the corner speed dealer getting a casual user hooked. Stay at our hotel and we’ll give you crappy casual speed for free. If you want to have web conference calls, host a webinar, give a demo, perform remote actions on a system via remote control software, or let your kids play games you have to buy the “good speed”. The good speed is expensive, and they know you will always generally feel the need for speed. And once you get the good speed you can’t really go back to the free speed…and they know it. This camp should be forced to perform their normal daily business functions for an extended period of time on the “free speed”. And then smacked with a purse when they ask for good speed. This is also the camp that uses soft word rhetoric in calling themselves peace makers and collaborators by giving us a choice. “If you are a casual user then you get it free.” In my world there is no casual Internet use, and my world generally doesn’t include streaming video or online gaming. But as iTunes, Hulu, and ModernFeed become mainstream and talking with clients via Skype is normal, that is the casual user and then the corner drug dealer forces me to pay for speed.

camp #3: camp of the free, web surfing rave
This is the camp that wants all the speed FREE. If all you have is slow speed then I want that FREE, but if you have high speed i want that FREE, too! It is my Larry G. Roberts given right to have it FREE. This I believe is the largest camp, of which i am a card carrying member. Give me FREE or I’ll give you pay-as-you-surf Internet death!

And that then leads me to the real point of this post. Unless something changes pay-as-you-surf hotel Internet will go the way of pay-as-you-talk hotel phones. Phone calls used to be a pretty good money maker for hotels. X dollars per call and then charges per minute. If you traveled regularly on business your hotel phone bill was hefty. First came the invention of 1-800 calling cards, so then hotels started to charge for the 1-800 calls and local calls to make up for lost revenue. Then came the mobile phone. Reception made it hard to only use mobile phones, so hotels still invested heavily in PBX infrastructure. But hotels quickly found their phone investment would never pay for itself because mobile phones became business phones and free VOIP via computer came about (i.e. Skype) and hotel phones are now a required convenience to call the front desk. Phones are now just a cost of doing business. Internet access is a requirement for doing business (both personal business and business business).

I’ve heard a few technology executives from some hotel and vendor companies say that satellite Internet will never be fast enough to meet the demands of the consumer. They may be right and probably are, but what I can promise is that if it doesn’t meet the requirement someone will invent something that will. Being fixed to a specific location for highly capable wireless high speed Internet access will be a thing of the past in 5 years (maybe less). Internet access is already at the milestone hotel phones reached with the introduction of the early mobile phone where “good enough” is already applying. I’m paying for this cellular based wireless service and it is fast enough to do what I need, and it’s FREE. Note it’s not really FREE, I just already paid for it. So why would I pay $9.99 to use your Internet. Especially if I can’t expense it. But if your Internet was already included in my room rate then it is FREE and I’d have the choice to use it or my Internet. And if I chose your Internet then you get to ask me who I am…bonus for the hotel.

I believe we are at cross-roads for hoteliers. Pay-as-you-surf Internet will go the way of the pay-as-you-talk phone and for many hotels, especially those without wireless. Infrastructure costs will either be sunk or take much longer to pay off as the hard decision is made on how to off-set those costs. It is time to make the decision that Internet should be FREE. If you cannot figure out a way to provide it FREE then I’ll use my own and stop paying for yours altogether!

Photos curteousy of dana 2, miss rouge, rightee, and TheAlieness GiselaGiardino²³

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