CHAPTER 6

E-INFORMATION AND DISTRIBUTION SYSTEMS

Objective: This chapter focuses on applications of information and distribution systems that provide interfaces to each of the hospitality business functions. E-information and distribution systems use technology to provide communication among interdependent operating units, which permits the staff members to focus on the core competencies of creating memorable experiences for the guests of hotels, restaurants, recreation facilities, entertainment venues, and travel companies.

Topics:

 Hospitality functions
 E-Business process
 Enterprise resource planning systems
 Artificial Intelligence

It is said that hospitality e-commerce consists of transactions and interactions between the business and customers (guests), employees and other businesses. It is recognized that the nature of the business-to-customer transactions are personal and intimate, which somewhat limits this aspect of e-commerce in the hospitality industry. These limitations, however, do not apply to the e-information and distribution systems that help enhance productivity for the hospitality businesses.

6.1 Hospitality Functions

Hospitality operations are quite complex due to the need to manage every moment that comprises the guest experience. E-information and distribution brings together all of the business functions that contribute to the operation of successful hospitality organizations.

Business functions of hospitality organizations include:

 Marketing
 Human resource management
 Accounting, and
 Operations
.

6.2 E-Business Process

Electronic Business, or "e-Business", may be defined broadly as any business process that relies on an automated information system. Today, this is mostly done with Web-based technologies. The term "e-Business" was coined by Lou Gerstner, CEO of IBM.

Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.

In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e- commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e- commerce involves the application of knowledge management systems.

There is a new model for the information distribution process that supports hospitality/tourism organizations. The key feature of this business process is the design of cross- functional information systems that handle multiple business functions. The two processes are Supply Chain Management (SCM) and enterprise resource planning (ERP), which are used to facilitate front end and back end electronic commerce (E-Commerce) and internal employee application interfaces (EAI). Supply Chain Management is a system of information interfaces with sources of supply for material resources. Enterprise Resource Planning is the overall information system used to maximize resource utilization in the transformation process and to manage output generation. Hospitality E-Commerce is the use of electronic media for transactions and interactions among guests/clients, employees and other business enterprises. Employee Application Interfaces (EAI) are B2E information systems aimed at maximizing employee productivity.

E-business involves business processes spanning the entire value chain:

 electronic purchasing and supply chain management
 processing orders electronically
 handling customer service, and
 cooperating with business partners.

Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the Web, the Internet, intranets, extranets, or some combination of these.

3 Categories of business applications:

1. Internal business systems:
 customer relationship management
 enterprise resource planning
 document management systems
 human resources management

2. Enterprise communication and collaboration:
 VoIP
 content management system
 e-mail
 voice mail
 Web conferencing

3. electronic commerce - business.-;to-business electronic commerce (B2B) or business- to-consumer electronic- commerce (B2C):
 internet shop
 supply chain management
 online marketing

Business models

When organizations go online, they have to decide which e-business models best suit their goals. A business model is defined as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers. The concept of e-business model is the same but used in the online presence.

The following is a list of the currently most adopted e-business models:
 E-shops
 E-procurement
 E-malls
 E-auctions
 Virtual Communities
 Collaboration Platforms
 Third-party Marketplaces
 Value-chain Integrators
 Value-chain Service Providers
 Information Brokerage

Classification by provider consumer

Roughly dividing the world into providers/producers and consumers/clients one can classify e-businesses into the following categories:

 business-to-business (B2B)
 business-to-consumer (B2C)
 business-to-employee (B2E)
 business-to-government (B2G)
 government-to-business (G2B)
 government-to-government (G2G)
 government-to-citizen (G2C)
 consumer-to-consumer (C2C)
 consumer-to-business (C2B)

6.3 Enterprise Resource Planning Systems

Hospitality organizations that use IT capabilities will greatly enhance their competitive edge. Customized solutions, business collaboration, flexible organization structures all provide what the customer is looking for when doing business with a firm.

As a customer, you may not realize that other organizations are participating in the development of your product or service, as you may be dealing with a virtual company comprised of many firms acting in collaboration. An example of this in the industry is the proliferation of online intermediaries that provide cruises, airline flights, and hotel rooms by working as brokers in collaboration with a number of hospitality firms. In the near future, hospitality organizations will establish their own inter-sector collaborative initiatives, which will eliminate the role of the independent hospitality broker. An example of this trend in the present is the near elimination of travel agents as third party contractors of hospitality and tourism services.

Information systems are certainly efficient and effective when it comes to management information used to make decisions. Managers have access to automated information that used to take long hours of tedious manual operations to compile. This is one of the intended outputs that drove the developments in the areas of database development and networking. Table 6.2 lists four types of management reports that are generated from information systems.

Table 6.2 Management reports generated from information systems

Periodic Scheduled Reports
Standard reports generated on periodic bases. Examples include Night Audit reports on a daily basis, Month-to-Date budget reports on a weekly basis, and Variance reports on a monthly basis.

Exception Reports
Produced and distributed when something out of the ordinary occurs. Flash and Pop-Up reports are examples.

Demand Reports
Sorted and specialized reports available to managers through database report generators and SQL.

Push Reports
Exception information "pushed" through the network to the workstations of all managers with a need to know. Similar to exception reports, but distributed to a more specific group of managers.


The periodic reports (daily, weekly, quarterly, annually distributed) are automatically generated and distributed to lists of managers and executives based on need-to-know the information. Additional reports such as, schedules, hours worked, banquet event orders (BEOs), occupancy, and others, are distributed to the general employee populous, again, based on the need to know the specific information. Many individuals in organizations are accustomed to these reports being printed on paper and placed in intra-company mail boxes for distribution. More progressive companies, however use electronic distribution, which is more effective and efficient than printed reports.

Remember that reports are generated by queries that order the sorting and combining of various records in the database used to provide specific information and analysis. Marketing and project managers are particularly fond of power associated with online analytical processing (OLAP) procedures available in progressive hospitality organizations. Online Analytical Processing (OLAP) uses electronic media to provide data collection and analysis from remote locations in real time. Table 6.3 provides a listing of these activities.

Table 6.2 OLAP activities

Automated Environment Analysis (AEA)
Data warehouses linked through a Database Management System (DBMS) with data mining features.

Consolidation
Chain of regional offices to provide information by property, city, geographic region, district or nation.

Drill Down
The opposite of consolidation. The chain home office can identify top producers at specific properties in ranking order and compare them with regional, district or national performance benchmarks.

Slicing and Dicing
Breaking information into customized segments, sectors or niches.

6.4 Artificial Intelligence

Artificial intelligence (AI) comes from the blended disciplines of computer science, biology, psychology, linguistics, mathematics and engineering. The goal of AI is to create machines with human physical and mental abilities (reasoning, learning, and problem solving). AI is not a new technology application, however, it has not been widely used until recently, as cost and machine power limitations prevented the development of its application for practical uses. Some of the aspects of AI are listed below:

 Neural Networks - The closest electrical simulation of an organic system. Comprised of networked processors that interact as transponders and have the capacity for learning based on identification of patterns and relationships.

 Fuzzy Logic- Processors that can perform reasoning based on inferences and incomplete data (the opposite of "crisp data") in response to SQL inquiries.

 Virtual Reality - Computer simulated reality based on multi-sensory input and output devices to create undetected simulated environments through telepresence illusions.

 Intelligent Agents - Applets that perform tasks for end users using a built-in knowledge base about processes. Application Wizards are good examples.

 Expert Systems – knowledge-based system that possesses expertise in a single discipline. Users pose questions and problems and the ES provides solutions. The three components of all expert systems are listed below:

o Knowledge base is the information contained by the system in factual and heuristic form.

o Inference engine provides analysis tools for If/Then reasoning and adds experiences to the KB through repetition.

o A knowledge engineer and a logic programmer program the expert shell.

All of these applications have been available from in technology R&D laboratories since the early 1990s. While smart chips have been built into commonly used machines and appliances that use some of these technologies (automobiles, for instance), the more powerful applications have been precluded from reaching market places due to hardware constraints. Today, however, with more powerful microprocessors and lower hardware costs, researchers are considering broad applications of these technologies. The implications for the hospitality/tourism industry over the next ten years will only be limited by the imaginations of decision-makers. This is a wonderful time for hospitality practitioners, as these technologies permit hospitality managers to use creative talents to envision and develop applications in conjunction with technical experts.

CHAPTER SUMMARY

This chapter has discussed many of the advancements in technology and information telecommunications that provide the establishment of fully functional E-Commerce systems. These systems infiltrate the interior aspects of the organization and link those to outside sources via the Internet, intranets, and extranets. The key driver for these applications is the overall advancement of telecommunications technologies. As discussed in the chapter, technology is facilitating new forms of open systems within, between, and among the variables that exist in the external environment.