Marriott International: Suite SuccessBy Samuel Greengard | Posted 2008-09-29 Print
Marriott turns IT into a strategic advantage.
Nowhere does the expression “think globally, act locally” ring more true than in the hospitality industry. Managing a business and a tangle of IT systems across dozens of countries can prove challenging. Yet, at the same time, ensuring that rooms, services and amenities meet expectations across various countries and cultures is enough to push even the most business-savvy organization to the breaking point.
Not surprisingly, information technology is at the center of the hospitality universe. And perhaps no company in the lodging industry spins a tighter orbit around IT than Marriott International, which has an IT staff of about 1,350. With more than 3,000 properties scattered across 67 countries—including select-service brands Courtyard and Fairfield Inn, full-service Renaissance Hotels, luxury chain Ritz-Carlton and its flagship Marriott Hotels & Resorts—the Bethesda, Md.-based company is committed to innovation and efficiency.
“Marriott’s use of technology to deliver distinctive experiences for our guests, owners, franchisees and associates stems directly from our philosophy about technology’s role within our business,” says Carl Wilson, executive vice president and CIO. “At Marriott, we do not have technology projects. We have business initiatives that are shaped and enabled by technology.”
A steadfast focus on IT governance, strategic planning, investment management and maintaining a robust enterprise architecture has helped Marriott move toward a converged business-IT environment, allowing it to embrace business-technology management. The hotelier will add 85,000 to 100,000 rooms worldwide between 2008 and 2010. In fact, it expects its worldwide hotel network to expand by nearly 60,000 rooms by year-end 2009. Meanwhile, in 2007, the industry benchmark “revenue per available room” (RevPAR) rose an impressive 6.5 percent.
No Reservations About IT
In recent years, Marriott has made a concerted effort to morph business and technology functions as seamlessly as possible. Wilson says that a “federated hybrid” model has allowed the company to become far more efficient, while still acknowledging the requirements of local properties.
“We are able to service our customers on a global basis using a centralized IT operation,” he says. The company has centralized its reservations system, rewards program and Marriott.com, as well as worldwide revenue management, general ledger consolidation and global human resources. “But if it makes more sense to handle certain tasks in a particular region, we take that route,” Wilson adds.
Relying on a mix of homegrown systems and Oracle enterprise software products to manage operations, Marriott has adopted a formalized governance model. An Information Resources (IR) group, chaired by Wilson and other senior-level executives, engages in regular discussions and analyses in order to evaluate the company’s strategies and better understand how technology affects those initiatives.
The team also communicates with technology representatives for its owners and franchise companies during all stages of technology development and implementation. An Owner and Franchise Technology Steering Committee, which meets regularly throughout the year, formalizes processes and manages technology adoption.
But IT oversight doesn’t end there. Marriott’s Enterprise Architecture (EA) organization handles enterprisewide IR decision-making and oversees the development of the organization’s overall IT framework, including IR principles, standards, processes and governance. What makes the group so effective, Wilson says, is its technical acumen and practical knowledge.
“Many of the people who belong to IR have experience running properties and handling various functions in the field,” he says. “Some of them have worked their way up through the company, so they know how the business operates.”
Earlier this year, Marriott’s EA group launched another initiative, the IT Internal Strategic Alignment Review (StAR) process. It aims to improve the company’s effectiveness in delivering solutions with technology components.
EA uses the formalized monitoring process to measure initiatives against its IT principles and standards. It also examines proven industry practices to boost the odds of project success. Wilson says that the program will lead to greater agility through improved technical consistency, lower costs through standardization and enhanced quality by tapping into industry-proven practices.
These initiatives—as well as Marriott’s inclusive culture—have ratcheted up the quality of decision-making and overall results. They have also helped the company achieve real convergence. Today, turnover for Marriott’s IT leadership stands at a paltry 1.5 percent annual rate. Among nonexempt employees, the turnover rate hovers at about 6 percent.
“This makes a major difference in everything we do,” Wilson explains. “You can walk into a business meeting, and it’s difficult to tell the business and IT people apart. There is a high level of understanding and teamwork.”
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