Marriott International: Suite Success

By Samuel Greengard  |  Posted 2008-09-29

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, 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.”

Moving Beyond Metrics

At the core of Marriott’s philosophy is the slogan, “Success Is Never Final.” “We believe that constant measurement and improvement are an integral part of our corporate culture,” Wilson explains. It’s an approach the company takes seriously. “Even though the value of technology is inherently difficult to measure, we constantly analyze outcomes and hold ourselves accountable to them,” he adds.

Marriott uses both quantitative and qualitative measures to demonstrate the value of technology both internally and to business partners. The former focuses on technical IT benchmarks such as bits, bytes, feeds and speeds. The latter incorporates customer performance and service benchmarks—ranging from surveys to occupancy levels—and pegs them to revenue per available room.

“When we talk about investing money in IT capabilities,” Wilson says, “we normally express it in terms of what it will do for revenue per room.” Marriott also benchmarks its IT operations against key leaders inside and outside its industry.

Other areas that Marriott has focused on include the adoption of a service-oriented architecture and managed services. The latter is taking on a growing role within the organization.

“We use managed services where it makes sense,” Wilson says. “If there’s an area that is critical to Marriott’s future growth, profitability or ability to innovate, we are inclined to keep it in-house.”

For example, this year, Marriott partnered with AT&T to develop a new network infrastructure specifically aimed at managing bandwidth for its hotels. Piloted at the Renaissance Boston Waterfront property, the network infrastructure enables the company to manage bandwidth allocation on the fly. “If we have five people downloading movies at the same time, we can allocate enough bandwidth immediately to meet the demands of both our guests and our operations,” Wilson explains.

Building a culture based on innovation and IT excellence hasn’t been easy. Achieving a converged business-technology environment has taken time and a good deal of effort. But, in the end, Marriott has emerged as a leader in IT excellence. Says Wilson: “We take business-technology management seriously.

In fact, it is the basis for much of our decision-making.”

READ Convergence: The Wave of the Future