InformationWeek
Defining The Business Value Of Technology
September 27, 1999
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A Trip To Grandma's Goes High Tech
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On the back end, Marriott has implemented PeopleSoft financial software and is in the process of replacing its years-old legacy corporate general-ledger system with PeopleSoft applications. Marriott also continues to upgrade its Web site. In the last year, it added such features as the ability to view pictures of hotels and rooms, check hotel availability and rates, and access and print driving instructions and maps to hotels and surrounding areas.
The hotelier also built a direct connection between its site and its central reservation system so users can reserve rooms online. The improvements mark Marriott's commitment to leverage the Net. Already, 80% of its Internet reservations are made directly through Marriott's Web site rather than via third parties, says Mara Hannula, director of interactive sales and marketing.
CKE Restaurants Inc., the parent company of nearly 3,800 fast-food restaurants with $1.8 billion in revenue last year, is also leveraging IT to better its business. Key to CKE's initiatives is a data warehouse that can analyze its business from both a customer and a financial perspective. CKE collects information from its stores and feeds it into the central data warehouse, which runs on Informix software. "We capture menu mixes, what things people buy together, and we're able to poll that every night from each restaurant," says George Bedar, CIO and VP at the Anaheim, Calif., company, which operates more than 870 Carl's Jr. shops, 2,700 Hardee's restaurants, and 110 Taco Bueno restaurants.
Drilling Down
Bedar wants to get even more detailed statistics on what customers want and then turn that information into marketing campaigns that could be executed right at the restaurant counter. Armed with that information, the point-of-sale terminal could prompt the employee to make a suggestion about an additional item. "Rather than just taking orders, employees could make recommendations," Bedar says.
Improving back-end operations also continues to be a focal point at CKE. Driving greater efficiencies from its systems has been a necessity, as much of CKE's recent growth is from acquisition. With some legacy systems no longer supported and others with maxed-out capacity, the new data warehouse and integrated operational systems became a must. The company purchased PeopleSoft financial, human resources, and distribution enterprise resource planning applications. The first module went into action a year ago; the last will be up and running this month.
Although the implementation requires some customization, Bedar says the consistent user interface will reduce training and drive greater economies of scale. "There's already built-in integration as far as communication across the modules, and you have the ability to focus your staff and implementation expertise on one given set of capabilities," Bedar says.
At Galileo International Inc. in Rosemont, Ill., the Internet is opening up new opportunities. The $1.5 billion provider of electronic-distribution services for the travel industry is approaching the Internet with a vengeance; after all, the Net is a perfect medium to deliver the schedule and fare information, bookings, and other services it provides travel agencies and airlines.
Recognizing the Internet's potential to change business, Galileo has no plans to compete with its customer base by creating its own brand on the Net. "We want to provide the technology and services so our customers can build their own Internet presence," says Jim Lubinski, senior VP of information services and operations.
In 1997, Galileo began migrating to TCP/IP, and by last year the Internet became the network distribution channel for Galileo in such markets as Hong Kong, Argentina, the Ukraine, and the United States. A global command center in Colorado holds microprocessor-based servers that allow its systems to process more than 7,700 messages per second.
With a strong infrastructure in place, Galileo last year launched two products. FocalPointNet lets travel agents connect to Galileo's computerized travel reservations systems via the Internet; Viewpoint is a sophisticated graphical user interface designed to make navigation through the reservation process easier for travel professionals. Galileo's overall goal is to increase the productivity of its customers, which in turn can increase their profits. "The whole travel-sector business environment is changing, and the profit margins of travel agents are being squeezed," says Lubinski.
With FocalPointNet, travel agents can eliminate the need for expensive leased lines and opt for dial-up Internet access, ISDN, cable modems, or DSL communications. Viewpoint lets agents check schedules and make reservations with simple point-and-click functions. "The number of commands in the cryptic environment needed to cancel a ticket are between 20 and 50," says Mary Skaates, VP of enterprise systems at Galileo. "With the new environment, it's two."
Although they may be using different technologies to reach their business goals, companies in the hospitality and travel-services sector have at least one thing in common: IT is taking center stage. Increased IT staffs and budgets are proof. CKE, for example, boasts an IT staff of 150 people, up from just 45 only two years ago.
At Cracker Barrel, the IT budget has risen by as much as 15% per year over the past several years, giving CIO Matheny and his staff new opportunities to leverage technology. On Matheny's wish list: beepers that customers carry to alert them when their tables are ready.
Of course, some high-tech gadgets may be more than the Cracker Barrel image can take. Says Matheny, "We try to put forth this look like you're eating at Grandma's, so we're almost reluctant to put technology right in front of you."
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