A midsize hospitality organization with headquarters in the Northeast and high-end luxury hotels around the world is facing challenges from nimble competitors and difficult macroeconomic conditions. The company recently designed new sales and marketing strategies focused on customer loyalty and customer value to improve competitiveness and increase revenue.
Executives want to share information about customer activities with the proper customer touch-points (such as sales and customer service) in real time to improve their customers' experience. They want to identify individual customers and deliver personalized offers over their web site to increase revenue. Simply put, they want to be proactive and serve their most valuable customers better. They need more customer intelligence—faster and sooner. The economics are attractive. Conservative improvements in adoption and retention could generate multimillion-dollar benefits in a just a couple of years.
‘Computing power combined with affordable storage and open standards make it possible to deliver customer intelligence any time, anywhere. ’
The IT folks took a look at the strategy and quickly determined that it could not be done. The organization's marketing systems are unable to meet the requirements. Reasons are plenty: "The database is not flexible enough"; "we need to buy more hardware"; "we can't do real time"; "we don't have that data"; "our batch window is too long"; and "those systems are not integrated." The changes and upgrades necessary to support the new strategy would cost hundreds of thousands of dollars, and they would take a year or more to complete. Sound familiar?
I looked at the company's technical infrastructure: reporting, customer database and marketing campaign software. These applications use recent versions from industry leaders. I found a few areas that could be tweaked for incremental improvements. But I realized that design and configuration of their systems was not the root of the problem. The key issue is that these applications were originally designed more than 15 years ago—before people knew about the Internet. Before Yahoo, Amazon, Google or eBay. The world has changed, but these market leaders have not kept up. You can't solve today's problems with 15-year-old technology.
If we can put a GPS, an accelerometer, a video player, a digital camera and a web browser in the 4.7 ounce iPhone, why can't we deliver real-time customer Intelligence without breaking the bank? We can. We just need to get our heads in the cloud.
As Bob Thompson wrote recently in his article, Fasten Your Seat Belts. Cloud Computing Will Change the Way You Do Business [1], cloud computing is among the most exciting and revolutionary information technology developments in the last 10 years. Cloud computing makes unprecedented computing power available to any company for a reasonable price.
Hundreds of millions of users
Companies like Amazon and Google have invested millions of dollars and countless hours building cloud computing technology to run their business. This is leading-edge technology to manage gigantic amounts of data while serving hundreds of millions of users around the globe 24/7.
Recently, these companies have started to offer this same technology to the rest of us. It is being offered as a service, on demand and pay as you go, with no minimums required.
Cloud computing is faster. It uses thousands of computers in parallel. It can grow or shrink to meet demand seamlessly. It is like a super computer at your fingertips—but at a fraction of the cost. Think of the speed of a Google search.
Cloud computing is less expensive than traditional technology because there is no need to buy hardware or large and expensive database servers up front. Instead, the data is distributed across thousands of commodity PCs. Disk space is not only affordable but also practically unlimited. Think of YouTube videos.
Cloud computing is better because it can perform many tasks at once. Bottlenecks happen when one server has to do too many tasks at the same time. On "the cloud," there are numerous computers working in parallel, so there is no need to wait. Think about Amazon processing payments while updating its catalog.
How can the cloud help you manage your customer intelligence in real time? Computing power combined with affordable storage and open standards make it possible to deliver customer intelligence any time, anywhere.
On the cloud, you can store limitless customer information, analyze it and make recommendations on the fly. Using the cloud's open standards, you can deliver the same content across all customer channels with ease for a consistent customer experience.
However, the cloud is no silver bullet and it should be adopted carefully. Individuals and organizations have expressed concerns about privacy, security, compliance and SLAs—all valid concerns that need to be, and will be, worked out in the near future.
How about that midsize hospitality organization? It just experienced a major breakdown. Its systems could not handle the volume of responses to a recent promotion. As a consequence, we are moving its systems to the cloud. This transition will enable the company to support sudden spikes in customer activity automatically. By connecting its other systems to the cloud, the company will be able to deliver a consistent customer experience across all of its different touch-points. This means analyzing all of the customers' behavior to deliver personalized recommendations via phone, online or at each of the organization's properties around the world.
We expect the cloud will save the company more than 50 percent in implementation costs, more than 80 percent in licensing costs and more than 40 percent in ongoing operational costs. New functionality will be available in weeks, instead of months.
If you are facing similar challenges, your future might look cloudy, too. And that would be a good forecast.