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Case Study 11 MARRIOTT INTERNATIONAL INC. UNIVERSITI UTARA MALAYSIA (UUM) MASTER IN BUSINESS ADMINISTRATION BPMN 6053 – MANAGEMENT INFORMATION SYSTEM. LECTURER – DR. THI LIP SAM Group Presentation by: URSULA G. JONGIJI ( Matric No.: 803739) SUSANNA A. KOH ( Matric No.: 809426 )

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Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

UNIVERSITI UTARA MALAYSIA (UUM)MASTER IN BUSINESS ADMINISTRATIONBPMN 6053 – MANAGEMENT INFORMATION SYSTEM

LECTURER – DR. THI LIP SAM

Group Presentation by:

URSULA G. JONGIJI (Matric No.: 803739)

SUSANNA A. KOH (Matric No.: 809426)

22nd May 2011


Background
Background

  • Marriott International Inc. is the hotel management company that manages Marriott International Hotel Group.

  • Foundered by John Willard Marriott(1900 –1985)

  • Marriott International Hotel is the world famous hotel brand.

  • Operates & franchises luxury & value hotels & lodging facilities throughout the world.

  • Has 2,700 franchised & operated properties in 65 nations.

  • Generates revenue of $12.9 billion in 2007.

  • North America houses 2,300 hotels.

  • Currently having 7 hotels in Malaysia.


Background1
Background

  • Ritz-Carlton, KL

  • JW Marriott Hotel KL

  • Renaissance Kota Bahru

  • Renaissance KL Hotel

  • Renaissance Melaka Hotel

  • Miri Marriott Resort & Spa

  • Putrajaya Marriott Hotel (franchised property)


Case study 11 marriott international inc
Case Study 11: Marriott International, Inc.

Three top corporate priorities are:

  • Profitability

  • Preference

  • Growth

  • Revenue management

    -main function: analyzing revenue data for forecasting and marketing (adjust price according to demand )


  • Case study 11 marriott international inc1
    Case Study 11: Marriott International, Inc.

    • Marriott developed two different revenue management systems, one for premium hotels and a second for its lower-priced properties.

    • Both developed using pre–Internet technology

    • Systems upgrades required installing updates locally which were expensive and problematic.

    • Two systems required two separate interfaces for entering prices into centralized reservation system.

      • Facts: 62 million reservations annually at 2,800 properties!


    Case study 11 marriott international inc2
    Case Study 11: Marriott International, Inc.

    • In the late-1990s, Marriott embarked on a project to create a single revenue-management system to be used by all of its properties.

    • The new system, called One Yield, was custom developed in-house, using a process similar to the SDLC.

    • IT professionals understood importance of user involvement, and formed a joint IT–business user team that developed business case for new system and jointly managed its development.

    • Team provided constant communication to system’s future users, and used prototypes to identify problem areas early.

    • Training is a continuing activity for all Marriott employees, and training facilities were integrated into new system.


    Case study 11 marriott international inc3
    Case Study 11: Marriott International, Inc.

    • One Yield computes the theoretical maximum revenue for each property and compares actual results to that maximum.

    • Using One Yield, the company has increased the ratio of actual to theoretical revenue from 83 to 91 percent. That increase of 8 percentage points has translated into a substantial increase in revenues


    Q1 how does one yield contribute to marriott s objectives
    Q1: How does One Yield contribute to Marriott’s objectives.

    Answer:

    • Marriott top priorities are profitability, preference & growth.

    • One Yield is an in-house Revenue Management system that is able to recommends prices for each hotel at any given day, date, current level of reservation & history.

    • Attune to Customer’s preference

    • improve the accuracy of its reservation forecasts and raise lodging revenue

    • It has contributed more to the profit of the business & growth.


    Q2 what are the advantages of having one revenue management system instead of two
    Q2: What are the advantages of having one revenue-management system instead of two?

    Answer:

    • One Yield can provide a standardized, consistent revenue management tool for all their properties.

    • All users will use the same system any where in the world.

    • only need to maintain one system.

    • Saves time

    • Predict customer’s need

    • More productive pursuit, i.e. focus on sales/marketing

    • Boost flexibility-easy communication with IS dept


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739
    Q3: At the same time it was developing One Yield, Marriott chose to outsource its HR information system? Why?

    Answer:

    • Promote Corporate Policy; Profitability.

    • A strategic & competitive edge against competitors

    • Custom made for Marriott’s hotels & properties.

    • In-house expertise available.

    • Outsource HR to focus on One Yield big project if successful

      will generate additional profit in millions.


    Q4 how did outsourcing hr contribute to the success of one yield
    Q4: How did outsourcing HR contribute to the success of One Yield?

    Answer:

    • Outsourcing HR provides Marriott the opportunity to focus on developing One Yield and it is more likely to succeed because of the commitment of the management & users resources are only to One Yield.


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739
    Q5: Summarize the reasons why a company would choose to outsource rather than develop a system in-house.

    Answer:

    • Management Advantage

    • Cost reduction

    • Risk reduction

    • Expertise

    • Availability

    • Flexible Capacity Management

    • Time Zone Coverage


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    • Management Advantage outsource rather than develop a system in-house.

      Decrease spending on research, marketing & R & D.

      Employees can concentrate more on the core operations of business.

      The increase in profit making areas will increase in efficiency, productivity & profit.


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    • Cost reduction outsource rather than develop a system in-house.

      • Economies of scale- centralized

      • Part time

      • Indirect cost saving-focus on core

        business


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    • Risk reduction outsource rather than develop a system in-house.

      Risks are lower with purchased software since the software has been tested before releasing to the market.


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    • Expertise outsource rather than develop a system in-house.

      Outsourcing gives company access to the knowledge pool externally.

      In-house expertise might be scarce & expensive to recruit.

      In-house resources can focus more to the operations & profit making area of the business.


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    • Availability outsource rather than develop a system in-house.

      • Highly skilled people is hard to find and if available are expensive to recruit due to the specialized area.


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    • Flexible Capacity Management outsource rather than develop a system in-house.

      • enables company to manage its capacity and staff.

      • The task of hiring personnel is passed on to an external provider .


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    • Time Zone Coverage outsource rather than develop a system in-house.

      • Using external providers, company can cover time zones that are not covered by their domestic operation.

      • For example, off shore destinations need work force that is willing to work irregular hours.


    Lecturer dr thi lip sam group presentation by ursula g jongiji matric no 803739

    Thank You ! outsource rather than develop a system in-house.