Best-in-class or best-of-breed?
24 January 2023
The hotel industry is a highly competitive and constantly evolving field, and hotels must continuously strive to improve their operations to remain profitable. One of the key areas where hotels can improve is in the realm of marketing, sales, and revenue management. Unfortunately, many hotels need help in this area due to the use of siloed, incompatible, and inconsistent systems.
One of the biggest problems with siloed systems in hotels is that they make it difficult for different departments to share information and collaborate effectively. For example, the marketing department may use one system to track customer data, while the sales department uses another system to track sales data. This makes it difficult for the two departments to share information and work together to achieve common goals. This can lead to confusion, inefficiencies, and missed opportunities, negatively impacting a hotel's bottom line.
Missing the big picture
Another problem with siloed systems is that they can make it difficult for hotels to get a complete and accurate picture of their operations. For example, suppose the marketing department uses one system to track customer data, and the revenue management department uses another system to track revenue data. In that case, it can be difficult for hotel managers to get a holistic view of their hotel's performance. This can make it difficult for managers to identify areas where improvements are needed and to make data-driven decisions to improve performance.
Incompatible systems can also be a significant problem for hotels. For example, suppose a hotel uses different systems for different departments, such as one system for the front desk and another for housekeeping. In that case, it can be difficult for the other departments to share information and collaborate effectively unless the systems have perfect integration. This can lead to inefficiencies, such as duplicate data entry, and can make it difficult for hotel managers to get a complete and accurate picture of their operations.
Incompatible systems can also be a significant problem for hotels. For example, suppose different departments are using other systems to track similar data, such as customer data. In that case, hotel managers can find it challenging to get a consistent and accurate picture of customer behavior and preferences. This can make it difficult for managers to identify trends and make data-driven decisions to improve customer satisfaction and revenue.
Hotels must take a more holistic approach to their marketing, sales, and revenue management systems to overcome these problems. This might involve consolidating different systems into a single, integrated platform or adopting a more flexible and scalable system that can be customized to meet the needs of other departments. In addition, hotels should improve communication and collaboration between departments and ensure everyone works together to achieve common goals and objectives.
In summary, siloed, incompatible, and inconsistent systems can be a major problem for hotels, making it difficult for different departments to share information and collaborate effectively and making it difficult for hotel managers to get a complete and accurate picture of their operations. To overcome these problems, hotels need to take a more holistic approach to their marketing, sales, and revenue management systems and work to improve communication and collaboration between different departments. By taking these steps, hotels can enhance their operations and increase their revenue and profits.
General and broad or specialized and deep
There are advantages and disadvantages to using a system with broad functionality that many roles in a company can use, as well as several very deep and specialized systems for specific functions.
Advantages of using a system with broad functionality
- Simplicity and ease of use: A system with broad functionality can be simpler and easier for employees across different roles. They will only need to learn to use one rather than multiple systems.
- Improved data consistency: By using a single system, data can be entered and stored consistently, making it easier to analyze and make decisions based on that data.
- Increased efficiency: By using a single system, employees can access the information they need without switching between multiple systems, saving time and improving productivity.
- Cost-effective: A single system can be less expensive to purchase, implement, and maintain than multiple specialized systems.
Disadvantages
- Limited depth of functionality: A system with broad functionality may not have the same depth in specific areas as a specialized system, limiting its effectiveness for particular roles or tasks.
- More difficult to customize: A system with broad functionality may be more difficult to customize to the specific needs of different roles or tasks, limiting its effectiveness.
- Increased complexity: A system with broad functionality can be more complex than specialized systems, making it more difficult to use and maintain for specific roles or tasks.
Advantages of using several very deep and specialized systems
- Greater depth of functionality: Specialized systems can have greater functionality in specific areas, making them more effective for certain roles or tasks.
- Easier to customize: Specialized systems can be more easily customized to the specific needs of different roles or tasks, making them more effective.
- Improved data quality: Specialized systems can enhance the quality of data and accuracy by providing specialized tools to collect, store and analyze data specific to the task or role the system is designed for.
Disadvantages
- Increased complexity: Specialized systems can be more complex than those with broad functionality, making it more difficult to use and maintain for specific roles or tasks.
- Increased costs: Specialized systems can be more expensive to purchase, implement, and maintain than a single system with broad functionality.
- Reduced data consistency: If different specialized systems are used for other roles, the data can be entered and stored differently, making it more challenging to analyze and decide based on that data.
- Inefficient: Employees may need to switch between several systems to access the information they need, which can take more time and reduce productivity.
In conclusion, whether to use a system with broad functionality or several very deep and specialized systems depends on the specific needs of the company and the tasks or roles the systems will be used for. Therefore, it's essential to evaluate the specific needs and capabilities of the systems and weigh the advantages and disadvantages before making a decision.
Finding people with knowledge and skills
In the hospitality industry, where there may be a need for deep knowledge in managing data, marketing, and revenue management, the choice between using a system with broad functionality or several systems with deep functionality can significantly impact the effectiveness of these efforts.
Suppose a hotel chooses to use a system with broad functionality. In that case, it can be simpler and easier for employees with limited knowledge in data management, marketing, and revenue management to use and understand. This can help to improve the consistency and accuracy of the data entered into the system and make it easier for employees to access the information they need to make decisions. However, a system with broad functionality may not have the same depth in specific areas as specialized systems, which can limit its effectiveness for particular roles or tasks.
On the other hand, if a hotel chooses to use several systems with deep functionality, it can be more effective for employees with deep knowledge of data management, marketing, and revenue management. These specialized systems can have greater functionality in specific areas, making them more effective for certain roles or tasks. However, these specialized systems can be more complex and demanding for employees with limited data management, marketing, and revenue management knowledge. They can also be more expensive to purchase, implement, and maintain.
Ultimately, choosing between a system with broad functionality or several systems with deep functionality will depend on the hotel's specific needs and its employees' capabilities. For example, if the hotel has a highly skilled and knowledgeable team that can effectively use and maintain specialized systems, then using several systems with deep functionality may be the better option. However, if the hotel has a less skilled team, using a system with broad functionality may be a better option.
It's also possible to consider a hybrid approach, where a system with broad functionality is used as a foundation. Then specialized systems are added to it as needed to provide the necessary depth of functionality while keeping simplicity and ease of use.
In any case, it's essential to properly evaluate the hotel's specific needs, capabilities, and limitations to make an informed decision and ensure that the chosen systems effectively meet its goals and objectives.
What is a "best of breed" system?
"Best of breed" is a term used to describe a system or solution considered the best in their specific area of functionality, such as a guest CRM, revenue management system, or channel manager, instead of using the much general built-in functions in the hotel PMS for these functions. A "best of breed" system in the hospitality industry has a deep and robust set of features and capabilities specifically designed to meet the needs of a specific job in the hospitality industry. However, all employees might need help understanding it and therefore requires a specialist to manage the system. In addition, it is advantageous if the system seamlessly integrates with the hotel's general systems, such as the hotel PMS, point-of-sale systems (POS), central reservation systems, and accounting systems.
What is a "best in class" system?
"Best in class" refers to a system or solution considered the best overall in its category or industry. This term often refers to a system that excels in multiple areas, such as functionality, scalability, integration, user-friendliness, and support.
In the hospitality industry context, a "best in class" system would excel in multiple areas, such as marketing, sales, revenue management, and management reporting. On the other hand, a "best of breed" system would excel in a specific area, such as rate updates.
General or niche
A system that spans several functions or departments and is not specialized in any specific area is often referred to as a "general purpose" or "all-in-one" system. This type of system may have a broad range of features and capabilities that different roles and departments can use, but they may not be as deep or specialized as a best-of-breed or niche system.
Over time, hospitality systems have evolved in both directions, becoming more specialized and niche and implementing more general-purpose systems to appeal to a broader range of users.
On the one hand, as technology has advanced, hospitality systems have become increasingly specialized and niche. For example, in the past, property management systems were primarily used to manage guest reservations and payments. However, now, there are specialized systems for revenue management, distribution, guest relationship management, and many other areas. In addition, these specialized systems often have a deeper and more robust set of features and capabilities specifically designed to meet the needs of the hospitality industry.
On the other hand, as the industry has become increasingly competitive and hotels have sought to streamline their operations, there has also been a trend toward using more general-purpose systems to simplify things and broaden access and usage. These "all-in-one" systems integrate multiple functions, such as marketing, sales, revenue management, business intelligence, reporting, and other features, to provide a more convenient and centralized platform for employees to manage multiple areas of the hotel's business.
In recent years, there has been a trend towards cloud-based systems and Software as a Service (SaaS) which has allowed for more flexibility in terms of customization and scalability, which has made it easier for hotels to choose a system that best fits their needs and easily integrates with other systems. As a result, the industry is shifting towards a more integrated and centralized platform that can be easily customized and scaled to meet the hotel's specific needs while providing employees with a more convenient and user-friendly experience.
Conclusion: A general system is good enough
The analogy of a general-purpose system in hospitality being like an iPhone and a specialist system being an advanced professional digital camera is easy to understand. For example, a person may use an iPhone for most of their daily needs, such as making calls, sending messages, and taking photos, but might, from time to time, need a specialized camera for more advanced photography. For most hotels, however, the built-in camera in the iPhone will be good enough. Likewise, many hotels will find that a general-purpose system, such as a property management system, an accounting system, and a commercial system is sufficient for most of their daily operations. However, larger hotels and groups may also require specialized systems, such as a revenue management system, for more advanced and specific needs.
Some hotels would likely need a general-purpose system and one or more specialist systems to effectively manage their operations and achieve their business goals. A general-purpose system provides a central platform for employees to manage multiple areas of a hotel's business. In contrast, a specialist system can provide more in-depth and advanced features and capabilities that can help hotels to optimize their revenue, improve customer satisfaction, or gain insights into their operations. Therefore, most hotels would need a general-purpose system and one or more specialist systems to effectively manage their operations and achieve their business goals. The specific combination of systems will depend on the size and complexity of the hotel, as well as the specific needs and objectives of the hotel.