Layout 2 - Hilton Worldwide

C OV E R S T O RY
Exclusive Q&A with Robert Webb,
Chief Information Officer,
Hilton Worldwide
In
PHOTOGRAPH BY: MICH AE L S EX TO N
nnovation
WRITTEN BY: ABIGAIL A. LORDEN, EDITOR-IN-CHIEF
A C C E L E R A T I O N
HILTON WORLDWIDE LAUNCHES GLOBAL TECHNOLOGY RESTRUCTURING PLAN, COMPLETE WITH NEW PEOPLE,
PARTNERS, AND PROCESSES, TO RAPIDLY MIGRATE I.T. PLATFORMS AND STRENGTHEN OPERATIONS
H
ilton Worldwide tion, and is already posting positive count that is now more than 3,500
may well be a news. In April, the company hotels and 585,000 rooms. Its 2009
poster child for announced a restructuring of substan- property development marked the secremarkable brand tially all of its existing debt and ond best year in the company’s 91power and perse- reduced the total by nearly $4 billion. year history (2008 was its highest at
verance. Despite an acquisition and Adding to its 2010 wins, in February 327 properties).
recession whose timing resulted in a Hilton Worldwide won the People’s
According to chief information officer
perfect storm of debt and industry-wide Choice Stevie Award for “Sales & Robert Webb, who joined the company in
downed occupancy, Hilton Worldwide Customer Service – Favorite Customer August 2009 with extensive IT leadership
maintained award-winning customer Service in Leisure and Tourism.” It also credentials, Hilton Worldwide is now
satisfaction, record growth, and
embarking on an aggressive globhigh brand equity throughout
al technology innovation roadmap
2009; a year that will likely go
that will also integrate its Hilton
down as one of the toughest on
International arm. In this exclusive
record for the lodging industry.
Q&A with Webb, Hospitality
Technology gets the inside story on
According to STR’s early foreROBERT WEBB, CIO, HILTON WORLDWIDE
the three-year restructuring plan
casts, the U.S. hotel industry
that will allow the company to
posted a 16.7 percent drop in
revenue per available room during ranked the highest in brand equity rapidly migrate its technology functions.
2009. Hilton Worldwide’s 2007 acquisi- with its Hilton brand compared to all The plan relies on outsourcing certain eletion by private equity firm Blackstone the other major hotel brands in the ments of its IT infrastructure — what’s
Group hit just prior to the recession and 2010 EquiTrend study, conducted by been dubbed the Hilton Worldwide
the timing left Blackstone with $20 bil- market
research
firm
Harris Innovation Collaborative — while simullion in debt carried on Hilton Interactive. In terms of growth, despite taneously reinvesting internally in other
Worldwide’s balance sheets.
major challenges for the hospitality areas. The result, projects Webb, will
Today, Hilton Worldwide, headquar- industry overall, in 2009 Hilton strengthen the company’s global operatered in McLean, Virginia, is on the Worldwide added 302 new hotels and tions and enable growth across the
road to growth and global transforma- more than 45,000 rooms to a total entire portfolio.
Q&A
www.htmagazine.com
June 2010
n
Hospitality Technology n 19
C OV E R S T O RY
that the acquisition brings with it the
challenges of integrating legacy applications. This creates the need for us to integrate some of those existing systems,
and reinvest in other, global solutions.
HT: WHAT CRITERIA ARE BEING USED
TO SELECT PARTNERS IN TERMS OF
REACHING THESE GOALS?
RW: One key criteria is around speed.
HT: WHAT ARE HILTON WORLDWIDE’S
OVERALL TECHNOLOGY GOALS FOR
THE NEXT SEVERAL YEARS?
RW: I would summarize Hilton
Worldwide’s strategic technology objectives for 2010 through 2012 as this:
accelerating technology innovation
that’s aligned to our business objectives; recruiting, upgrading, training
and retaining a world class technology
leadership team; instituting select
strategic partnerships to drive innovation that enables the hotel business;
establishing solid project, program and
process management disciplines for
governance; and then really making
certain that we have a robust infrastructure, architecture and security set of
disciplines across the company.
So it’s really around innovation and
technology strategy aligned to business
objectives, processes and people, and
making sure that we have the right
technology underpinnings to make all
that come alive.
HT: WHAT ARE SOME OF THE SPECIFIC
TECHNOLOGY PROJECTS THAT ARE
PLANNED?
RW: We’re going to spend a greater
portion of our energies focusing on
innovation initiatives that best differentiate our offerings. We have half a
dozen critical priorities that are multi-
22 n Hospitality Technology n June 2010
million dollar in scope as we reinvest
in our technologies. Surrounding the
differentiation I spoke of before, those
projects focus on our website
redesign, our financial system
upgrade, our sales force system
upgrade, revenue management systems integration, and innovation in the
area of the guest experience, in-room
and on-property.
We’re going to refocus our internal
resources more on the things that
make us a terrific hotel and less on the
commodity offerings, and we’re going
to be leveraging world-class suppliers
for things that are more commoditized
in nature.
HT: THE DECISION TO BRING IN PARTNERS FOR CERTAIN AREAS OF YOUR
I.T. STRATEGY, HOW HAS THE ACQUISITION OF HILTON INTERNATIONAL
PLAYED INTO THAT?
RW: The acquisition of Hilton
International has been a very important
event that requires us to partner with a
new set of global strategic technology
providers. With more than 3,500 hotels
in 81 countries, we need suppliers who
have the necessary scope and scale;
who have a presence in those countries
and who can provide us with support
and services key to those markets.
The other important consideration is
Collaborating
with
world
class
providers like IBM, Accenture, and
Microsoft, combining their core-competencies with the commonality of our
systems, allows us speed in bringing the
right innovations to market faster.
Another key criteria is around investment. The magnitude of the investment
that companies like IBM, AT&T or
Accenture make in technology is amplified by working with us, and our initiatives are amplified by working with
them. As a result, we have an economy
of skill, and we also have an economy
of scale. The last criterion is cost savings. We’re not doing this for cost savings. We’re doing this to innovate faster,
to have more competitive solutions, to
take advantage of the investments that
the world’s largest technology companies are making, and to tap into their
vast pools of talent and expertise.
HT: YOU MENTION IBM, ACCENTURE
AND MICROSOFT. WHAT OTHER
PARTNERS ARE YOU WORKING WITH?
RW: We’re working very closely with
IBM on infrastructure globally, and
they’re currently the only partner we’ve
announced as a part of the collaborative.
They’re running our data center network,
and are also running a very critical central reservations system for us. We’re also
working very closely with Accenture on
some of our more complex business integration needs across our back-office systems. Given Accenture’s global capabilities in integrating technology platforms,
they’ve already proven to be an important partner for us in helping us with
some of those challenges. We also have
very close relationships with Tata
www.htmagazine.com
Consulting Services and Infosys in selected projects where we need to move rapidly with economies of skill and scale. In
addition, Microsoft and AT&T are important, and they’re all true technology partners rather than service providers.
HT: WITH REGARD TO HILTON’S I.T.
VISION IN THIS NEW ROADMAP, DO
YOU SEE THE COMPANY POSITIONED
AS AN INDUSTRY INNOVATOR, OR AS
A REACTOR TO MARKET DEMANDS?
RW: I believe that we want to be an
innovator in the areas of strategic differentiation, such as our websites, financial
systems, revenue management, and
guest-facing, in-room check-in/check-out
technologies. I absolutely want to be
making investments with partners and
innovating faster in those areas. I think
mobile, combined with high-speed
Internet access, and location-based services for our guests are very important.
Those will be areas where we’ll be
investing faster in order to differentiate;
and when I say faster, I mean faster than
before and faster than our competitors.
That being said, it’s also very prudent
to be a fast follower in some areas. I
would very much like to learn from the
mistakes of our competitors with
respect to the adoption of some technologies. While Hilton has been recognized as a company of firsts there are
areas where we will make a decision to
be a fast follower instead of a first-tomarket alternative, and that would be a
strategic decision.
HT: HOW ARE YOU MAKING DECISIONS REGARDING WHICH SOLUTIONS SHOULD BE KEPT INTERNAL,
AND WHICH SHOULD BE MOVED TO
OUTSOURCED PARTNERSHIPS?
RW: We approached this in a rigorous
and disciplined way. We looked at nondifferentiating elements of our technology
stack first, such as networking and datacenter services, e-mail services; things
that are common to any company but are
not hotel/guest experience specific. We
set in place criteria regarding speed, cost,
and quality, and we evaluated providers,
selecting IBM, for example, to deliver our
infrastructure services globally.
In other areas, such as the applications area, we’re looking at the different
application domains and putting them
into tiers based on level of differentiation. If you look at corporate systems
such as HR and financial systems, we’re
leveraging suppliers that have scale,
skills, and expertise in those platforms
and are working with them on the
implementation of those systems.
Finally, there are other areas where
there are recognized needs for unique
capabilities — where Hilton Worldwide
will want to innovate faster. It is these
areas that will remain an internal focus,
using our suppliers for some but not all
functionality. For example, in the area
of our website redesign and our loyalty
systems; those are things very close to
the customer experience where we
believe the functionality of our mobile,
Web apps, and our revenue management analytics will enable us to be a
superior competitor.
HT: WHAT’S IN STORE FOR HILTON’S
PROPRIETY PROPERTY MANAGEMENT
SYSTEM, OnQ?
RW: The OnQ property management
system and its framework are at the center of our Hilton technology strategy
and we believe it provides unique capabilities. OnQ is a tremendous asset for
the company because we have a single
image of inventory globally. We believe
that OnQ in itself is a differentiation for
our franchisees and guests. We’ll make
additional investments to enhance it and
also integrate it with other applications,
both custom and package. We’ll continue to enhance the interfaces that it has
to both our proprietary applications that
deliver even greater customer insights
and value, and we’ll also integrate it to
other, more standard applications.
HT: WHAT’S THE MIGRATION BEEN
LIKE IN MOVING TO PARTNERS,
AND WHAT’S NEXT?
RW: The transition plan is an 18-month
one for the first phase of the collaborative that’s been announced. That
includes the data center with IBM, the
network, reservations systems, e-mail,
and corporate desk-side support. We’re
entering into the agreement with IBM
on the non-differentiating portions of
our IT service delivery first. For the end
user, this transition creates a businessas-usual approach.
In phase two, we’ll start to integrate
financial and HR systems globally and
will accelerate our partnership with other
suppliers. There will be subsequent
announcements before year’s-end regarding additional members of the Hilton
Worldwide Innovation Collaborative.
Additionally, we are aggressively hiring key talent in project leadership and
architecture roles, with strong process
rigor and technology management. We
will not be outsourcing the leadership
and design portions of what we do. We
still need to know what questions to ask,
we still need to set strategy, and we still
need to manage SOAs with the supplier.
We’re going to maintain accountability
and responsibility for delivering services
and programs across the company. HT
“We have half a dozen critical priorities
that are multi-million dollar in scope
as we reinvest in our technologies.”
www.htmagazine.com
June 2010 n Hospitality Technology n 23