Hilton Books IT Partners for Long Stay
Recognizing the opportunity for partnership and the need to focus more on its core hotel businesses, Hilton Worldwide created the Innovation Collaborative, working with top global technology companies. Hilton Worldwide CIO Robert Webb says that under the program, Hilton’s IT partners have implemented systems development best practices, leveraged extensive R&D efforts and delivered next-generation technology solutions.
As the technology landscape continues to evolve at breakneck speed, it becomes increasingly challenging for companies to maintain their technological edge, and they often must make substantial IT investments to do so.
That’s the position Hilton Worldwide was in when I joined the company as CIO in July 2009. Years of rapid growth, several mergers and other business changes had created a high level of fragmentation and legacy complexity across our technology infrastructure, which we needed to address.
We were also expanding rapidly around the world and had outgrown our ability to support all our technology services internally. Executives, hotel managers, owners and customers were facing day-to-day problems and inconveniences when trying to accomplish simple tasks, such as accessing WiFi or checking bookings at other properties in our portfolio.
As a result, last year, we embarked on an ambitious new approach to our technology needs by creating the Hilton Worldwide Innovation Collaborative. Recognizing the opportunity for partnership and the need for stronger focus on our core business, we work closely with top technology companies in several key areas. The collaborative’s mission is to deliver exceptional guest experiences while leveraging the skills, quality and scale of these technology leaders to differentiate Hilton Worldwide brands from the competition.
Our Strategic Technology Sourcing management team works with the Innovation Collaborative group to enable end-to-end management of sourced services. This team holds the partners to their service-level agreements and assists the day-to-day operations teams with contract interpretation, supplier performance and governance.
With the collaborative partners’ support in implementing systems development best practices, leveraging extensive R&D efforts and delivering next-generation technology solutions, we can focus more effectively on our core competencies. We’ve redoubled our strategic efforts and continual process improvement by building strong governance, architecture and sourcing management organizations.
This approach enables our IT organization, Hilton Technology Solutions, to emphasize long-term objectives, along with control mechanisms to help attain them. It also helps us effectively manage suppliers’ efforts during execution.
Before launching the collaborative initiative, Hilton Worldwide engaged advisory firm TPI to conduct a rigorous assessment of our existing IT solutions and identify areas where we should collaborate with external partners. After thorough due diligence, we selected the five founding collaborative members based on their global expertise and their ability to deliver economies of scale in future development, infrastructure, application development and support services for our company’s more than 3,750 global properties.
Throughout 2010, Hilton Worldwide announced partnerships with Accenture, AT&T, IBM, Microsoft and Tata Consultancy Services (TCS). We understand that successfully implementing and integrating our partners’ core competencies into our infrastructure will take significant and sustained effort. But we also know that significant opportunities lie ahead. The Innovation Collaborative is a long-term endeavor that will enable us to continue our rapid domestic and international growth.
Each collaborative partner possesses unique skills that allow Hilton and its portfolio of brands to retain a competitive position.
• Accenture provides application development and support services for our property management systems and multibrand, transactional Websites. It also supports us with a global service desk.
• AT&T provides a fully managed suite of WiFi and Internet services for Hilton Worldwide. It manages and operates our StayConnected program, which enables guests to access high-speed Internet services in their hotel rooms, as well as in meeting spaces and public areas.
• IBM hosts and manages the technology platforms that support our 10 brands, including data center management and monitoring, global email services, Web hosting and the central guest reservation system.
• We deployed Microsoft’s SharePoint 2010, Office 2010, Office Communications Server and Windows 7. We also leverage Microsoft’s SQL Server and Visual Studio to power our proprietary OnQ property management product suite.
• TCS spearheads the transformation and management of a core group of application platforms that deliver enhanced product offerings. TCS also oversees our corporate suite of applications, including property information management, learning management, quality assurance, business intelligence, financial systems and intranet applications.
ACHIEVING SIGNIFICANT BENEFITS
Since pioneering the Innovation Collaborative, we have achieved significant benefits in three key areas: improved project productivity, enhanced data center efficiency and greater high-speed Internet access. Specifically, we have improved project productivity by 33 percent by balancing internal and external resources to deliver results more efficiently. This allows us to accelerate innovation and be first to market with ground-breaking new technologies.
In the area of data center efficiency, we have transitioned our technology infrastructure to a world-class facility. The new LEED (Leadership in Energy and Environmental Design) Gold-certified data center exemplifies our commitment to sustainability, boasting energy-efficient and redundant power and cooling, while lowering the total cost of ownership for technology services. We are using a cloud computing environment and first-class monitoring tools at the data center to enable greater technology flexibility, maintainability and scalability and to improve overall system security.
As for high-speed Internet access, we have maintained best-in-class Internet performance, reliability and consistency, while our cost per room is 60 percent of the industry average.
KEYS TO SUCCESS
Throughout this experience, we have identified the following key success factors:
• Driving collaboration among partners: It’s important to bring strategic partners together to work as a team. Partners must feel empowered and comfortable reaching out to one another, bringing forth ideas, sharing observed risks and working through interdependencies.
• Early adherence to the governance process: It’s critical to ensure that effective governance processes are in place and being followed prior to contract commencement in order to prevent loss of the expected contract value. If you allow value leakage and it goes unchecked over time, it becomes difficult to realize the benefits of your business case and can be very difficult to correct.
• Focusing the efforts of the internal IT team: The internal IT organization must change the focus of both the collective mission and the individual roles. When technology is fully in-house, the team directs how things should be done. When it is outsourced, however, the focus should be on what needs to be done, leveraging the wealth of the partners’ best practices to determine the “how.”
The Innovation Collaborative provides us with a strong competitive advantage. Most companies in the hotel industry have both owned and franchised assets, where many employees on the technology side come from within the industry. However, this homegrown model cannot do on its own all the development and support that the hotels need.
I came from the financial services industry and brought that experience to Hilton Worldwide. We decided to do these things differently than what’s typical in the hotel industry by partnering with external companies that are experts in their specific industries. This allows us to surpass what we were able to do alone in the past and lets us focus on a strategy for getting our hotels the technology they need.
As a result, we’ve seen dramatic changes in our business operations. We now have new capabilities; an enhanced focus on the guest experience; improved project productivity; enhanced, environmentally friendly data center efficiency; and greater high-speed Internet access.
In addition, we’ve increased network capacity, provided greater functionality for our IT network, and driven down infrastructure and bandwidth costs.
Our owners and guests are reaping the benefits of the Innovation Collaborative. By streamlining IT services, owners have a greater opportunity for growth at the property level, both for themselves and their business. Our guests experience additional convenience and efficiency—from booking their rooms to accessing the Internet.
Robert Webb is the CIO of Hilton Worldwide. His international skills have been sharpened through past executive experience with Accenture, General Electric and Equifax.