Knowledge management has become an important aspect in businesses. The traditional business world is being transformed by information technology innovation (Choi, Lee and Yoo, 2010). The tasks that were traditionally performed on corporate computers are now being carried out with the help of cloud computing. In the present assignment, definition of “Software as a Service” (SaaS) has been provided in the context of cloud computing (Ward and Peppard, 2016). The use of SaaS model has been identified for hospitality industry. Further, the report discusses the benefits for organizations that opt for cloud based SaaS model. Three key challenges associated with introduction of cloud based information system have also been explained. Lastly, the report provides discussion on the three key approaches that could be used for overcoming the challenges.
According to Black, Clemmensen and Skov, (2010), SaaS is a model of software licensing and delivery in which the license for a software is provided on subscription basis. It is also known as on- demand software. The users typically access SaaS by means of internet. With the help of it, organizations are able to access business functionality at a relatively low cost (Black, Clemmensen and Skov, 2010).
Melville, (2010) have defined SaaS as a distribution model in which application is hosted by a third party and software is made available to the customers through internet. It is considered to be one of the three main categories of cloud computing (Melville, 2010).
As per the views of Singleton, (2011), SaaS is a method of software delivery in which data can be accessed from any device with the help of an internet connection and web browser (Singleton, 2011). In this model, the servicers and databases and code that form a part of the application are hosted by software vendors. This indicates that heavy expenditures are not to be made by the companies in extensive hardware for hosting the software (Galliers and Leidner, 2014). As a result of this, the buyers are able to outsource a number of responsibilities related to Information Technology.
Following are the two key benefits of adopting cloud based SaaS model for organizations in hospitality industry:
- Improving guest experience: Adoption of cloud computing in customer relationship management helps the organizations in hospitality industry in a number of ways. Cloud computing based SaaS model helps the hotels to improve staff collaboration to a great extent (Power, Sharda and Burstein, 2015). There are a number of situations in which the guests need assistance. They have a number of queries and other issues and complaints that need to be resolved by the staff of the hotels. With the help of SaaS model, the staff is able to be more responsive to the guests. It can respond to the queries in a quicker and efficient manner. Moreover, cloud computing based customer relationship management system also helps in bringing reductions in the downtime. This further helps in keeping the guests satisfied. More than that, it also assists in retaining the customers of the hotels (Yates and Paquette, 2011). These further bring into light those customer interactions which are the most valuable. The hotels can replicate this information towards those potential customers who are to be targeted and retained (López-Nicolás and Meroño-Cerdán, 2011).
- Consolidated customer view: Cloud based CRM systems helps the hotels organizations to obtain a consolidated customers view. With the help of it, the organization is enabled to capture each customer interaction and transaction. Moreover, it also provides the staff with all the necessary big and small details regarding the customer interaction (Laudon and Laudon, 2011). It assists in collation of real time customer information from multiple systems across different cities and nations. The huge data related to customers can be viewed by the staff and updated in a timely manner with the help of effective integration of external systems. As cloud computing based SaaS model helps in constantly updating the information, it helps in keeping upgraded information in the systems at any given point of time (Baskerville and Wood-Harper, 2016). Moreover, pliable interfaces are present in the cloud based SaaS model which assists the hospitality industry in collation of unorganized and diffused data related to customer as well as business (Holsapple, 2013). Furthermore, it assists in collation of scattered data belonging to a variety of sources. In that manner, it assists in analysing the scattered data regarding various aspects. Along with this, holistic view of customer details provides the hotels with more number of opportunities regarding up- selling, cross- selling and for building overall rapport (9 Key Benefits of CRM for Hotels, 2016).
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While implementing cloud based information system, a number of challenges are faced by the organizations in hospitality industry. Some of them are listed below:
- Challenges associated with technology- A number of challenges are faced during implementation of cloud based computing system. In relation to technology, the challenges could be unpredictability of performance, resource exhaustion, data transfer bottlenecks etc. (Österle and et.al., 2011). The two key features of cloud computing are low cost and computing resources. However, as there is overcrowding of large providers in the market, the cloud providers overcommit computing resources for attracting customers. But, for maintaining the profit, they comprise on the value delivery system. This includes limiting access on cloud resources and deploying older CPU technology (Choi, Lee and Yoo, 2010). A large difference is found between the expectations of the customers and the services provided by the providers. Hence, it is a technical challenge which restrains organizations from provision of services of superior quality to its customers. Another important challenge in this regard is data lock. If the business operations are ceased by the provider, in that case the organizations face challenge of moving the data or services to another provider. This presents a big issue in the implementation of cloud based information systems.
- Challenge faced regarding inter- cloud architecture- There are situations when the organizations in hospitality industry need to transform into a hybrid structure. The end goal of the organizations for hybrid cloud architecture requires integration of public cloud resources into the data centre management (López-Nicolás and Meroño-Cerdán, 2011). It can be intimidating to design a private cloud in order to transform to a hybrid architecture. This is because, significant changes are required for hybrid architectures in relation to the data center architecture if specific inter- cloud needs are to be accommodated. As per the requirements, it is necessary to secure the inter connectivity between private and public cloud environments. Moreover, with hybrid architectures, it becomes necessary that the deployment of compute services as well as infrastructure is distributed (Baskerville and Wood-Harper, 2016). This comprises of the policies that are concerned with the governance of security, availability and access management. When the organizations are about to undertake deployment of this disjointed set of policies, there are be challenge of operational inconsistencies related to application delivery (Oliveira and Martins, 2010). This can ultimately lead to unpredictable performance and availability. As a result of this, the organization may fail to meet the acceptable operational requirements.
- Maintaining operational consistency- Implementation of cloud based information systems, whether in the form of private or hybrid cloud implementation, often present the challenge related to maintaining consistency in operational processes (Chen and et.al., 2010). This further makes it critical to obtain benefits from cloud computing. When local resources are to be managed by the operations of an organization in hospitality industry through one methodology, the cloud- employed resources are on the track of utilizing another methodology. This leads to the policies and processes becoming disjointed. There is no synchronization between them. As a result of this, there occurs an increase in the cost that is associated with the management of operational and implementation risks (Lindner and Wald, 2011). Further, there may also be compromise on the availability, performance and security due to inconsistency between the policies that have been overlooked. It can also hamper visibility as well as monitoring due to lack of functionality in the area of cloud environments. Another situation can be when an operator fails to configure the capabilities during the process of deployment (Ward and Peppard, 2016). A number of application deployments are encouraged by the multi- tenant nature of private cloud. These may also suffer from same inconsistencies in the operations. As a result of these missteps, not only the implementation of cloud based information system becomes difficult but it also impacts the benefits that can be obtained from SaaS model (Black, Clemmensen and Skov, 2010).
The following key measures can be used for mitigating as well as minimizing the impacts of the challenges that are faced by hospitality firms while implementing cloud based information systems:
- Overcoming Technical challenges- This challenge can be overcome by obtaining information from the vendors regarding the time period for which they will be able to provide the services. In order to overcome the technical challenges, the cloud computing based information systems can be made more compatible with other parts of IT infrastructure (Melville, 2010). This is important as it is required that before implementation of cloud computing based information system, the other aspects need to be integrated. It is only then that the implementation will not have any negative impacts on the operations of the firm. Also, IT professionals can be hired by the organization who will help in overcoming the challenges associated with implementation of cloud computing based accounting information systems in organizations of hospitality industry (Galliers and Leidner, 2014).
- Overcoming challenge related to inter-cloud architecture- This challenge can be overcome by a number of strategies. Inter cloud bridging can be supported by a system consisting of modularized software and virtualized solutions. A secure and accelerated tunnel is provided by iSession between public and private cloud environments (Power Sharda and Burstein, 2015). This combination of systems are integrated with support for network overlay technology. This includes EtherIP with the help of which the system makes sure that network connectivity is fostered. It also ensures IP routing with the help of which public cloud components are treated as an extension of organization’s private cloud. When WAN optimization functions associated with WAN optimization manager is added, it helps in bringing optimization of the traffic that flows between securely connected sites. When optimal performance is achieved, the organizations are enabled to undertake live migration of virtual machines. They are also enabled to maintain the performance levels as is expected by the stakeholders. Further, solutions can be employed for integrating SaaS and cloud- deployed applications (Yates and Paquette, 2011). As a result of this, single Sign- on (SSO) is enabled in hybrid environments through consolidation of authentication and authorization of the data centre.
- Challenge related to operational inconsistency- During implementation of cloud based information system, there is an issue of experiencing operational inconsistency. This significantly impacts the organizations in hospitality industry. In order to overcome this challenge, a combination of technologies can be used (Laudon and Laudon, 2011). Virtual editions can be made use for carrying out deployment in a variety of hypervisors. With the help of this, it is possible for the organization to duplicate critical infrastructure. Device service clusters can be used for sharing and synchronizing policies that are concerned with governing availability, performance and security. Further, this will ensure that operational risk is managed in a consistent manner (Holsapple, 2013). The challenge can also be overcome by sharing a common interface and management model. This will ensure consistent management of all the services such as access control, acceleration, security, availability etc. These services can be managed across a large number of locations and within cloud computing environments (Österle and et.al., 2011).
From the file it can be concluded that SaaS model is an effective solution for the organization of hospitality industry. Various definitions have been provided by different authors which characterize SaaS as a distribution system and application model in which application is hosted by third party. Saas model provides various benefits to hospitality organizations. Most important of them are related to improving the guest experience and consolidated customer view.
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