The Price Is Always Right

Marriott applied its business wisdom to building an IT system that has successfully tackled its greatest challenge -- maximizing revenue.

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Setting Expectations

The executive steering committee gave Williams approval to start work in 2001. The next step was to reach out to the community of people who would either use or have to pay for the system. (Each Marriott property is billed for their IT systems usage.) The One Yield team wanted to learn from users what they needed, including what they loved and hated about the legacy DFS and RMS applications.

But the communications effort had a dual purpose. The One Yield team wasn't just seeking input about what to include in the new system, it was also laying the groundwork for what the users could expect from the system. Setting expectations is critical to the success of any system rollout, but particularly one in which some users can decide whether they want to install it. "There's always a risk when you do something across the entire organization of properly assessing the organization's readiness for the change," Wilson says.

The deployment plan for One Yield called for all RMS or DFS users to be automatically moved onto the new system, but the 50-plus percent of franchisees who worked without a revenue management system in the past could make the choice for themselves. Some franchisees had never seen a need for such a system. If they adopted One Yield, then the system would deliver real enterprise value.

The job of liaison fell to Russell Vereb, Marriott's director of inventory planning. "We needed to make sure we understood the audiences, how they wanted to be communicated to, what information they needed," says Vereb. So he developed a plan for dealing with the inventory managers, franchisees and general managers who needed to be sold on One Yield. "A GM wants to know how much its going to cost or how much it will impact staff. A user wants to know why this feature they loved isn't going to be in the new system."

As part of his strategy, Vereb sent monthly press releases to One Yield's business constituencies for a full year-right up until rollout. In them, he highlighted One Yield benefits and provided information about project status, pilot results, new training tools and system costs.

The communications effort confirmed the importance of accommodating the human element in One Yield. "What we in IT do is science; that's for sure," says Whitridge. "These users have a lot of art in their job. What we do for them is just part of an overall picture of their jobs, managing rooms and function space and customer needs."

There's only so much a computer system like One Yield can do. It can provide historical data on past bookings for a particular day and show what reservations are currently on the books, then make recommendations on how to price the room inventory. But One Yield doesn't know that a new hotel has opened across the street from the Marriott Courtyard in Pensacola, Fla., and is taking away business or that cancellations are going to pour in because a hurricane is forecast to make landfall in the next three days. The local revenue manager will. So the One Yield team designed the system so that the user can either accept or override One Yield's recommendations before pressing a button to send those rates to Marriott's central reservation system. Sometimes an inventory manager can make a better decision than the system, and that ability to override the system ensures its value.

The users also wanted to monitor their performance. So the One Yield team built a revenue optimization module, now referred to by users as their "Monday morning quarterback." The module brings together data not only about actual bookings but also about rates that either were turned down by potential customers or that weren't offered to them. Users can then have One Yield perform a postmortem revenue optimization, looking back up to 28 days at the decisions revenue managers made and how they could have done things differently. "The system can figure out-if you made all the perfect decisions-what the optimal amount of revenue would have been," says Williams. The inventory manager in Pensacola might find he overestimated the impact of that new hotel and offered too many rooms at lower rates.

The Importance of Prototypes

While the business side of the One Yield team both pumped and primed the user audience, work was under way to prepare the IT department for the nearly three-year effort to build One Yield. The goal was to create a system that would work upon rollout and also be robust enough to carry Marriott through years of growth and changes. "Based on our corporate growth objectives, we wanted to design One Yield to ensure that it could scale to include more [users] than the prior systems," explains Whitridge. "And as with any system, if [it's slow or hard to use], users will find workarounds. So we wanted to make a very responsive system as well." Complicating matters, no one on the development team had much experience with the WebSphere development tools and J2EE architecture. "Our only Web experience had been small-scale projects with static display of content," explains DeeGee Ingco, senior director of revenue management systems and IT project leader for One Yield. So, as most companies would do, Marriott augmented the IT staff with consultants. But Whitridge also made a key decision to use prototypes as a way to both give the IT team practice with the technology and to anticipate potential bugs.

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