Centralizing IT Systems in

Hotel Chain Business

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Table of Contents
Part I: Business Case Development............................................................................ 4
Introduction................................................................................................................ 4
Why Centralization.................................................................................................. 4
How it affects the departments...............................................................................4
Centralized IT and decision making......................................................................4
Installing and using the new information system.................................................5
Implementing common data management system..............................................5
Effect of change in IT systems per region...............................................................5
Motivational Plan..................................................................................................... 5
Communication Strategy/Plan................................................................................. 7
Communication Plan............................................................................................ 8
Project risks analysis and mitigation.......................................................................9
Executive support................................................................................................ 9
Resource constraint.............................................................................................. 9
Scope change....................................................................................................... 9
Technology setback.............................................................................................. 9
Delays in centralised decision making.................................................................9
Benefits of Centralized Database..........................................................................10
Availability of Data and Information...................................................................10
Data Sharing, Security & Integrity......................................................................10
Cost Control & Resource Utilization....................................................................10
Query Response time & Learning.......................................................................10
Maintenance and support................................................................................... 10
Acquisition of relevant skills & Technology.........................................................11
Improved customer service................................................................................11
Part II: Business Case Implementation.....................................................................11
Team Composition................................................................................................. 11
Executive member (1)........................................................................................ 11
Senior business managers (6)............................................................................11
Senior IT manager (1)........................................................................................ 12
Team Organisation................................................................................................. 12

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 Deadlines........................................................................................................... 14
The implementation plan................................................................................... 15
Project Costs...................................................................................................... 16
Acquisition Strategies for Software and Hardware................................................16
Negotiation Strategy............................................................................................. 18
Overall Strategic Approach................................................................................18
Negotiation Principles:....................................................................................... 18
References................................................................................................................ 20

Part I: Business Case Development

Introduction

Our company is a multinational organisation that deals in hotel chains which are
spread across the world. The group headquarters is in the United Kingdom, in

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Europe, and the organization has operating business units in Europe, North America,
Asia, Africa and Australia. Each hotel currently implements an information system
that is outdated or not in tune with modern IT trend in the hotel industry. Each hotel
is responsible for purchasing hardware and software as well as other decision
regarding IT. As a result of the decentralized information system for each hotel,
there are different reservation systems, different databases and data formats which
make it difficult to have an integrated data for running the company, and also
inconsistency in the services rendered by each hotel makes marketing and branding
difficult.

Important information such as operation cost, occupancy, and profit and loss takes
a long time to be compiled and reconciled by the central accountant before it is sent
to the executives. This has made it difficult for the executives to get timely business
information for strategic decision that will make the chain more profitable. Our
proposal as managers is for the organisation to implement an enterprise-wide
centralized information system that will provide real-time information on every
hotels business operations and finances and enable executives to have better
control and management of the hotels to promote branding and marketing.

Why Centralization
According to Campbell, Kunisch & Mller-Stewens (2011), management decision to
centralize must be based on the evaluation of these three questions and return a
positive value; namely i) whether centralization is a requirement, ii) what value it
would add, and iii) whether the risk is low. In this particular case decentralization
has failed and hence centralization is a requirement; the value is better decision-
making based on timely, accurate and available information; and the risk is low.

How it affects the departments

Centralized IT and decision making

The new system will demand that the traditional decentralized IT system become
more centralized into a common system such that decisions about the
implementation, purchase and maintenance of hardware and software is made by a
unified IT department in the enterprise. The proposed system will be based on IT
vendor solution that provides enterprise applications for the hospitality industry. The
new system will affect the traditional decentralized IT decisions and systems of each
hotel with regards to:

Procurement of hardware and software

Reservation and customer management
Finance and auditing

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 Marketing and advertising
Data management.

The following key departments in the organsation will be affected by the proposed
changes:
IT
Hotel reservation and customer management
Finance
Accounting
Auditing
Marketing

Installing and using the new information system

The new system will usher in new workplace environment with regards to new
technologies, tools and processes that staffs will use to do their work. It will ensure
consistency and expertise in that only qualified person will be involved in
developing the organization standards which will then be implemented and
enforced corporate wide. In considering that staffs are fundamental to the
successful implementation of the system, a change management process will be in
place with plans to take the people along by discussing with them and intimating
them about the need for the change and the impacts of the changes on them and
the wider enterprise. We will also seek the opinion of staffs as well as note their
concerns which we will feed into change decision making. The change management
plan will also include a strategy for training and building the capacity of the staffs
on how to use the new system for carrying out tasks like booking, customer
services, sales, recruitment, appraisal, payroll and finances. Provision will be made
for relevant human and material resources and also for the processes and
mechanism needed for staffs to effectively use the new systems.

Implementing common data management system

The new system will provide a common pool of data and information from daily
business operation that will help serve as decision support to the executives who
will be able to forecast and design marketing and branding packages that are in line
with business demands. This will help to place the enterprise in the forefront of the
hotel industry. The new system will help to avoid inconsistency in the data produced
by each hotel in every region by ensuring every hotel adheres to a standard data
requirement in the enterprise.

Effect of change in IT systems per region

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Adapting to the new central system will definitely have some effects on some of the
hotels in the chain. Centralizing the IT systems will require the adoption of a central
language. This can be tackled by having a language translator installed with the
system so users can choose in which language they will want to interact with the
systems, in particular the online reservation system. Employees will also have to be
trained on how to use the central system. Training and orientation is done on how
centralizing the IT system will boost our image by ensuring that standardization is
maintained in all branches of our hotels

Motivational Plan
Management realizes that information systems affect who does what to whom,
when it was done, where it was done and how it was done. Changes required that
individual and personal change in attitude and routine, which is painful. It also
requires personal and additional effort at retraining oneself which may or may not
be rewarded. Management recognizes this effort and has put in place some
motivational plan to assist employees in quickly adopting and adapting to the
change of centralizing a once decentralized IT system. (Laudon & Laudon, 2007)

a. Setting of goals for the marketing team with bonus attached. It helps the
team be more geared at achieving the goal to gain the bonus. It is also an
incentive for the team to be more innovative and creative. It however also
makes employees more reliant on the bonus. Without the bonus, they will not
be inspired to achieve their goals (TVA, 2004)
b. By giving recognition to achievers. Getting recognition helps employees build
their self-esteem and help boost their drive to achieve more. By recognizing
the effort of the best performer in each department through presenting the
best employee award and also by recognizing the hotel to first adapt to the
centralization process through recognizing the Best Change Implementation
Hotel (Huczynski & Buchanan, 2013). The downside is that the low performer
may be frustrated and it may have adverse effect on health.
c. Scheduling of monthly employee retreat sessions with each location to get
their experiences and observation. It encourages innovation and creativity as
each employee will be able to bring forth their idea which will then be open to
debate. The best idea is then adopted. Employees are encouraged to think
and work smart (Anon2, n.d.). Work may be disrupted and employees whose
idea do not get picked may be discouraged over time
d. By offering a fair reward and appraisal system. Employees who are in tuned
with your rewards system will be encouraged to become achiever. Knowing
what type of rewards motivates your employee is vital (Huczynski &
Buchanan, 2013). Some employees might feel that the reward applied to
them is not fair.
e. Encouraging employee retraining. Training is a motivation for employees as it
prepares them for new challenges. Employees should be well trained on the
function of the centralized IT system and how it all fits in with the

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 organizational goal, brand and image. Employee might become reliant on
training and not think out of the box.
f. Managers should engage in participatory type of leadership than being
authoritative. When employees are involved, they feel appreciated and
wanted. Managers should encourage employees to be more involved than
giving out orders to them. Give then the spirit of it is ours rather than the
spirit of it is mine. This may breed conflict or breach of proprietary data or
information.

Further to the above, we will incorporate the Maslows hierarchy of needs theory
which is based on the essential needs of employees that leads to job satisfaction
(Huczynski & Buchanan, 2013). Satisfying these needs will lead to acceptance of the
centralized IT systems, job satisfaction, increased loyalty and increase in revenue
and profit. The implementation will be in stages. One stage is satisfied before the
next. This ensures that management can effectively assess the effectiveness of
each stage on its employees and make amends. Maslows hierarchy of needs is
illustrated in the figure below:

Communication Strategy/Plan
Management to ensure that the changes to be adopted have passed through the
traditional screen comprising of the following interconnected components such as
rules & policies, goals & measurement, customs and norms, training, ceremonies
and events, management behaviors, rewards and recognition, communication,
physical environment and organizational structure. This is achievable through the
adoption of proper communication channel such as Email, video conferencing, calls,

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meetings, brainstorming sessions, group chat and social media tools. Our
communication strategy is based on the principles of adhering to corporate
language policy, inclusion of all stakeholders, leadership involvement, and proper
feedback loops. The communication plan is illustrated in the table below:

Communication Plan
communicatio
Purpose audience message languages n channel
Ask for All Based on our participatory English, E-Mail
employ employees mode of leadership, we hereby Local
participation require active participation from Languages,
in change employees in the change Formal
process process and implementation of
the centralized IT systems from
the finance, human resource,
customer relation, procurement,
marketing and IT.
Meet with (Employee There will be a meeting of the English, E-Mail, Video
employees s name) Centralized IT systems change Local Conferencing
who group on the 12th of May, 2015. Languages,
volunteered Please endeavor to be available Informal
and kindly notify the organizer if
you wont be available.

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Highlights Managers The centralized IT system will English, E-Mail, Video
the better enable management Local Conferencing
Opportunitie make strategic corporate wide Languages,
s and decisions that will be impartial Informal
Threats of and favorable to all. Employees
the change without the prerequisite
qualification might be at a
disadvantage at first but
management has put in place
training for those employees so
as to bring them up to speed
with the system.
Highlights All The centralized IT system will English, visitation to
the Employees better enable management Local location,
Opportunitie make strategic corporate wide Languages, E-Mail, Video
s and decisions that will be impartial Informal Conferencing
Threats of and favorable to all. Employees
the change without the prerequisite
qualification might be at a
disadvantage at first but
management has put in place
training for those employee so
as to bring them up to speed
with the system (main
emphasis should be on the
opportunities and request
suggestions on how to handle
the threat from the employees)
Seek All We hereby require feedback English, Online
Feedback Employees from all employees on the Local Survey,
from Centralized IT systems and how Languages, Emails
employees it affects you. Kindly note that Informal &
on your feedback will not in any Formal
implementat way affect your appraisal
ion process

Project risks analysis and mitigation

Executive support
Having the support of the executive is crucial to the successful implementation of
the project. Issues such as lack of interest in project goals, inadequate authoritative
backing for team member and conflict between the executive stakeholders is risk
factors that can mar the potential of the project. We will ensure executive support
by engaging them right from the planning stage into the implementation stage by
focusing their attention on the delivery of the business goals.

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Resource constraint
The project schedule can be derailed by the risk of not having all the team members
on ground to execute the work plan and inadequate financial resources. This can be
mitigated by ensuring a cost effective plans of implementation that will promote
buy-in and provision of funding by the management. There will be back up plans for
integrating other members in the team.

Scope change
This project risk can result from uncontrolled change to the project scope and this
change can be internally motivated from amongst the team members or externally
related end user wanting to add or make changes to a project specification. While
scope change is inevitable and sometimes useful, implementing changes in an
indiscriminate and uncontrolled approach will ruin the focus of project outcomes.
While stakeholder input are essential to progress reviews, any suggestions for
change will be analysed by the project team to determine their relevance to the
goals of the project.

Technology setback
The project can be potentially threatened by uncertainties in information technology
such as delays from software and hardware defects, failure of an underlying service
or platform as well as issues resulting from platform used to construct the software
or software updates of a critical tool that which does not support some of the
functions anymore (Viswanathan, 2015). We will use vendors with industry track
record for quality assurance and a technology glitch or downtime backup plan will
be implemented with the cloud technology.

Delays in centralised decision making

Bureaucracy in centralised decision will slow down the pace and power of each
department to make certain critical decisions on their own. To offset the challenges
of bureaucracy in the centralized decision making, a strategic decision making
framework will be implemented to be overseen by the IT governance body which
will include members from each of the affected departments.

Benefits of Centralized Database

A centralized database will bring a number of benefits to users, customers and
support staff. The following benefits are amongst those envisaged:

Availability of Data and Information.

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System downtime will be kept minimal, i.e. approximately 97% uptime will be
achieved. The system provides automatic replication of data, thereby solving the
back-up challenge. This make sure that data is available even when a particular
user is off-line. Also, data availability will ensure disruptions as a result of downtime
are avoided. Information available for strategic decision is online and available real-
time.

Data Sharing, Security & Integrity.

The ability to have access to and share data from any location will improve
efficiencies. The system will provide real-time sharing of data amongst users
irrespective of their location which ensures that hotels share information in real-time
and that managers see the same information at the same time. It also increases
data integrity. Only one record of information on each hotel patron is held centrally
such that whoever accesses it will see the same information. Data security is
increased because control of data access can be managed from one point.
Information cost and quality increases and economics of information changes
(Laudon & Laudon, 2007)

Cost Control & Resource Utilization.

It reduces operational cost (Reed, 2013) which includes cost of managing

employees for HR department, the cost of IT hardware and software for IT
department, cost of maintenance of IT systems which is now done centrally and
cost incurred due to inconsistency in data (Laudon & Laudon, 2007). Also under-
utilization of resources is another major challenge of the old system. The lack of
awareness as to what resources are available where, have a negative impact on
resource utilization. The new system is resource-aware with resource monitoring
capabilities that identifies which resources are available (McDonald et al, 2010).
This makes it faster and easier to embark on organization-wide activities

Query Response time & Learning.

The centralized system will provide fast response times to queries, and data
management and maintenance times will improve. Also the learning curve is greatly
reduced because users only have to master the use of one system and not multiple
ones. It also helps in averting the loss of institutional knowledge (Reed, 2013)

Maintenance and support.

Supportability of the system also increases because only one system needs to be
supported and capability can be focused on that. Also system maintenance is
carried out centrally which reduces operational cost of having to do it at each
location.

Acquisition of relevant skills & Technology.

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It allows management to have a central planning and operation which allows for the
introduction of compatible skills and technology (Reed, 2013). This helps in avoiding
fund wastage because only essential technology purchases and system
development are implemented (Beck, 2010).

Improved customer service.

With centralized database every unit sees the same information at the same time,
and this can be used to better segment guests according to their preferences based
on observed conduct, provide discount to regular frequent guests and send to
guests the hotel newsletter with special offers. This should ultimately increase
customer loyalty and attract new customers.

Part II: Business Case Implementation

Team Composition
As advised by the Board of Governors, the implementation plan of the Business
Case will be managed by a problem solving team named Team Central which will
consist of 11 key members from HQ and key operating units and also
representatives from all the branches of the organisation. They will ensure smooth
implementation and integration to existing operations.

The team composition guarantees that the project has the required support,
commitment, mandate and direction of the leaders and employees to see it to its
successful completion.

Key members of Team Central are stated below:

Executive member (1)
Provides the mandate and authority backing needed for the successful
implementation of the system
Provides direction, support and sponsorship
Overseeing and monitoring implementation and performance of the system
Serve as a link between the project management and the board by reporting
to them and engaging them in the governance process
Senior business managers (6)
Provides partnership support by engaging with the IT to implement the new
system
Ensure that business strategies and objectives are set and well aligned with
that of IT
Make input into requirements for the system by communicating business
concerns with the team
Serve as a link between the problem solving team and the different branches
by carrying them along in the change process, providing room for

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 consultation and ensuring that staffs are given adequate awareness training
on how to use the new system
Ensure the successful deployment of new system at every branch
Assess business risks and establish reporting system between every branch
and the problem solving team
Senior IT manager (1).
Set the process and direction for use of IT in the organisation by ensuring that
the objectives of IT are in line with the business
Ensure the availability of skilled IT personnel
Development and deployment of the new system
Partner with key suppliers and partners for relevant IT contractual
agreements
Designing and delivering relevant training to staff members in all branches
Identify system risks, concerns and gaps as well as designing and
implementing solutions
Head of marketing (1)
Collaborate with marketing team in different regions to serve as reporting link
between the problem solving team and issues relating to
marketing/branding/customer satisfaction as well as the marketing team.
Work with the marketing team to develop marketing, sales and loyalty
programmes for customers
Manage the development of enterprise brand for all the chains of hotel.
Track and manage customer satisfaction and related issues

Audit head (1)

Provides audit mechanisms for tracking and evaluating IT activities in line
with business objectives
Provides assurance on the performance of the new system in line with the
goals of IT
Finance manager (1)
Monitors and give advice on IT-related costs and benefits
Provides finance reporting system
Take charge of IT purchasing and contractual processes

Team Central will be geographically dispersed across the globe, when they work
together as a team; there are issues that can get in the way of their working
together such as differences in geographical time, culture/personality and trust-
related problems. Also, since members are not under any supervision, they can
become unserious about their roles and not steadfast in carrying out their
responsibilities in due process and time. For these reasons, a team leader will be
appointed to oversee the activities of the team and to prevent or tackle any of
these issues that can undermine the team

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Team Organisation
As this is a virtual team, we will need a meeting coordination plan that is based on
communication technologies to facilitate effective communication between team.
Below is an overview of such a plan:

Project Facilitator Target when Method of communication

information audienc
e

Format Medium

Project Team leader Team Weekly Meeting Skype call,

meeting for membe video
planning and rs conferencing,
decision emails
making

Action Team leader Team To be Document WhatsApp,

plans/Issues membe decided file, text Skype calls,
arising rs message email

Occasional Team leader Team To be Document WhatsApp,

disagreement membe decided file, text Skype call,
rs message email

Reporting to Team Board Quarterly Meeting Face to face,

Board of member/Execu of video
Governors tive member govern Document conferencing,
ors file call, email and
hardcopy

The lack of physical interaction between members can undermine interpersonal

trust in the team. To promote trust in the team, a team trust charter is developed.
Team members are encouraged to imbibe the culture of reliability, consistency and
responsiveness when dealing with teammates (Bradley et al., 2002). The charter

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 emphasizes the need for building trust in the team by members responding
immediately to electronic communication from other members and also
demonstrates that members can be reliable partners by continuously carrying out
their responsibilities as expected. As such, the virtual team members should avoid
long lag in responding to the messages of others, make joint decision with group in
the event of priority changes and being steadfast in following up on commitments.
The trust charter will be facilitated to promote effective communication between
members by providing a robust communication technology that supports video
conferencing, emails, text and calls.

Each member of the team will be measured based on their ability to perform their
individual duties efficiently. The team will not be evaluated as a group. This is
because every member will show different level of participation, creativity and
performance in getting their jobs done and meeting up to schedules, so evaluation
based on the group outcome will not be fair to those who delivered fully on the job
given. Also this might send a wrong message to members into thinking that it is
okay to not take their duties seriously. We will implement a financial reward system
for the group. This extrinsic reward will be a way of appreciating staffs for their
achievements and encouraging all to put their best in the job. Exceptional
performance by individual members will also be noted and rewarded accordingly.
Most importantly, we will create an enabling environment and culture that
encourages members to be creative and to engage in tasks that they are good at.
This will promote sense of achievement and satisfaction which will further serve as
intrinsic motivation in the team to promote commitment, creativity and further
achievements.

Deadlines
Deadlines for the team central are as depicted in the table below:
Notation-Owner: 1-Team Central, 2-Head of IT, 3- Head, HR, 4- Head, Finance, 5-
Responsibilities Owne Deadlines Head, Marketing
r Deadlines: End of the
week in question
Select an SaaS Vendor 1 Week 4

Customization 2 Week 6

Integration with HR 3 Week 7

Software

Integration with Finance 4 Week 7

Software

Integration with CRM 5 Week 7

Testing 2 Week 11

Deployment 2 Week 12

Launch & Public Usage 1 15

Week 15

Usage Monitoring & 2 Continuous

Reporting
The implementation plan

See table below:

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Project Costs
The cost breakdown of the project is shown in the table below (USD):

S/N Item Budgeted Cost

Budgeted Cost for the Project (All Locations inclusive)

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 Start-up Cost of SAAS $150,000

Yearly Subscription (SAAS) $50,000

Hardware Purchase & Upgrade $100,000

Internet Subscription (yearly) $120,000

420000

Management Reserve $105,000

Total Budgeted Cost $525,000

Acquisition Strategies for Software and Hardware

To support our hotel business, we require infrastructure that support our customers
and processes. Engaging the correct infrastructure that enables our hotel operation
run smoothly and efficient is of a high priority because all other aspect of our
business will definitely be affected if a wrong choice is made (Traxler, 2012). In
centralizing our operations, we are also seeking a global presence hitherto unknown
before. According to Google (2011), more bookings of hotel accommodation will
take place online as we had 20% of travel booked in 2011 as against almost zero in
2009, and there is hope of it growing to about 80% over the coming years. Based
on this statistics, we will be leasing our software using cloud-based hotel software
from Software as a Service (SaaS) provider. We choose this option because we
require our global presence on the internet as soon as possible, at a low cost and
also one that will enable us reacts to market changes and competitive forces as
quickly as possible. Some advantage of using SaaS is that it saves time and cost,
has increased flexibility, easily accessible via the internet and mobile application,
online reservation system will be appealing to tech-savvy guests, easily scalable

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and reduces training as the vendor handles the technical requirements while
providing us with an easy to use system for the end user (Sanghi, 2013).

The cloud based hotel software will include a property management system which
will cover the front desk, point of sale, housekeeping, channel management and
global distribution (Sanghi, 2013), a customer reservation system which enables
customers reserve a room from anywhere they are and a customer relationship
management system which enables us mange our customers effectively across the
globe. We do not require expensive hardware to support the cloud-based hotel
software; basically for each location, we require a computer, printer, scanner, laptop
or smart phone devices and a network device used to access the internet such as
modem, router or wireless communication channels (Wi-Fi), firewalls and a web
browser installed on the computer.

Our priorities are selecting a good SaaS vendor who meets the required criteria. The
required criteria are

1. Data center infrastructure: where the solution is hosted is of utmost

concern and what laws apply to data security in the country (Weston &
Kaviani, n.d.)
2. Security: is my data secured. Go through the security infrastructure and
protocols of the vendor on security
3. Integration: how does it integrate with existing applications
4. Customization: can the application be tailored according to users and
business requirements
5. Cross platform compatibility: is it fully functional across operating systems
and on all major Web browsers
6. Mobile compatibility: can my users and employees access this application
on their mobile
7. Backup & Upgrades: what is their backup strategy? Do they have mirror
servers? Do I have free access to the new innovation and features? How
often are the upgrades?
8. Service Level Agreement (SLA): study the vendor SLA which should be
clearly laid out before commitment. How robust is the SLA? Does it include
type of service, service failure management and penalties, data policies,
maintenance, support, exit process, disaster recovery plan, security and
privacy requirements? (Anon1, 2015)
9. Scalability: if my business grows, can the application accommodate this
growth?
10.Service: how engage is my vendor. We need a vendor who is fully engaged
and involved throughout the life cycle of your relationship
11.User Interface: can the user interface be customized? Is it user-friendly and
simple to navigate? (Seroter, 2009)

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 12.Access to analytics and report: how is the reporting interface? What are the
analytics tools on ground? Can we have access to our raw data? (Seroter,
2009)
13.SAAS Support: Ensuring that we get top-notch support. How long will it
take to respond to mails, fixing error noticed, maintenance, upgrade and
provide services?
14.Costing: when some service provided have met above criteria, we then
select the most cost efficient keeping in mind the budgeted cost by
management.

We are interested in building lasting and beneficial relationships with our supplier as
they also help in creating innovative ideas and products. We will be partnering with
our suppliers in the delivery of qualitative hospitality to our various customers. Our
focus will be on mutual benefit rather than price reduction and by doing this we
hope to benefit each other in developing and leveraging our joint intellectual
property that is maximizing the value of our relationship and sharing of real time
data if and when required. We will jointly build partnership that mutually prospect
for new competencies, ideas and technologies that enhances our joint relationship.

Some key elements of relationship are communication between the parties

involved, trust that has been established, how satisfied are both parties with each
other, how committed are they to the same goal, relationship maturity, power and
how dependent they are on each other (Oosterhuis, 2009). This implies that for us
to build a lasting and beneficial relationship with our supplier we need to ensure
that proper communication channels are put in place. In partnership, we will be
communicating by using open meeting, emails, phone, presentation and feedback.
We will tend to establish an honest and trustworthy relationship through continuous
communication and also by understanding how the work of the supplier can benefit
us, having a liaison officer communicate regularly with our contact person at the
supplier end, placing our order in good record time, passing on opportunities to
them, and also by making our business important to our suppliers
(Infoentrepreneur, n.d.).

A liaison officer is the one who will ensure that we maintain an efficient
communication channel between our suppliers and the organization. The
procurement officer will be our liaison officers and will be in charge of
communicating with suppliers to ensure their details are up to date, gives feedbacks
and information exchange with suppliers, sends Request for Proposal (RFP) on time
and ensures that we are both beneficial to each other in the long term (CPC, n.d.)

The administrators and project team members will be trained on the pilot
application deployment and then we use the train the trainer approach where the
administrators train the users at the hotel. A schedule of all users to be trained is
drawn up per location and this is done within a spate of three weeks as it requires
no extensive training. Also provision of support to end users who might have issues

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using the online reservation system will be put in place to assist with taking the
user through the site. These include the use of free toll number for effective
communication and support, live chat, emails and social media.

Negotiation Strategy
Overall Strategic Approach
The primary objective of the strategic negotiation process is to ensure that the
organisation ends up with the right products, sourced at the right price, and
governed by the right contractual terms. Products that are likely to be supplied by
existing suppliers (i.e. those vendors who are already in the vendor list) should be
prioritised during negotiations as they could form part of the existing re-negotiated
or renewed contract. Products that attract new suppliers should be handled
separately as they require green-field negotiation approach. The other priorities
within the contract negotiation process should include size, vendor importance and
degree of complexity of the product/service offered. All contracts should be
allocated an internal caretaker or owner to ensure one point of call for vendors. A
multi-disciplinary team to be put in place comprising personnel from Technical (IT),
Finance, Procurement and Legal; and their mandate is to negotiate a contract that
minimises risk to the organisation and maximise flexibility and control.

Negotiation Principles:
The following principles with be adopted during the negotiation process:

a. Suppliers are to be segmented into tiers according to the order of their

importance. Key suppliers that already have a relationship with the
organisation are likely to take a longer-term view in contract negotiations and
they would stress mutual benefits for long-term viability of the contracts.
Their interests are likely to be aligned with our organisations. New suppliers
who dont have a strategic relationship with the organisation would be
looking at negotiating to establish a relationship or alternatively
negotiating to bang the biggest buck. Both these possibilities will be
handled accordingly in line with strategic objective stated above.

b. The strategy for sourcing products and services will be that of breaking down
the requirements into packages and allow suppliers to bid for each work
package. This allows the team assess each suppliers strength and
weaknesses and then negotiate from that perspective. The idea is to
negotiate shorter contract with new unknown suppliers (unless there is good
reason not to), and longer term with existing suppliers. This will ensure that
the company is not bound by unfavourable terms for too long a time in case
circumstances change. The short-term contracts should focus on pricing and
favourable terms. Pricing versus term is normally difficult trade-off for
vendors as they will push for unfavourable terms in cheaper prices and vice
versa.

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c. Payment schedule should be aligned with milestone delivery in order to
ensure that the company maintains pressure on the supplier to perform. In
case of non-performance progressive payment will be withheld, and monetary
penalties will be imposed. For example if the milestone delivery is late by a
week, then 10% of the milestone payment is withheld.

d. One of the mandatory enablers for the negotiation process is the disclosure of
mandates for the respective negotiation teams. For big IT contracts such as
this one, it is advisable to demand that the teams have the required scope,
financial and legal mandate to bind their respective organisations. It is
possible that one or two negotiation points may require the teams to consult
their respective principals, but this should be exception rather than the norm.
Failure to ensure this would lead to laborious negotiation engagements that
fail to yield effective results. The supplier should therefore be represented by
mandated executives who will make decisions.

e. Failure to reach agreement means there is a deadlock in the negotiations. If

this happens the following will be implemented:

o The venue and set-up will be changed. If the negotiations were taking
place at the companys boardroom, they could be changed to a
conference room in a hotel facility chosen by the supplier. The
psychological effect is that its a new round of negotiations with new
assumptions and may break the deadlock.

o The negotiating team will be changed. One of the requirements for

successful negotiations is that the teams must have a proper fit. If the
teams continuously talk across each other it may be that theres no
chemistry between them. In that case it may be wise to change the
teams and use different people. Also it may happen that the levels of
team members are not aligned. If the supplier for example sends
middle managers to negotiate with executives, then there may be
problems with respective seniority. Seniority of members should match.

o Providing new information. Sometimes deadlocks are caused by lack of

access to the other parties information. If parties decide to disclose
more information to each other as an effort to break the deadlock, then
this could yield favourable results

o Taking a break. As simple as this sound, if the teams take some time
off the negotiation table and resume a few days or weeks later the
results could be different. Sometimes the paradigms get locked in time
and the brain is unable to think laterally. Taking time out could solve
the problem

22
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