It was W. Edwards Deming who said, “Without data, you’re just another person with an opinion.” Deming, an American engineer, was known for his influence and insights in business process management. Beyond espousing the virtues of continual improvement, his work culminated in the Deming System of Profound Knowledge (SoPK), a comprehensive theory of management.
Key to Deming’s view of management was the concept of all employees [assume this also includes technologies] working together as a system, “with the aim for everybody to win.” Applying Deming’s principals to today’s environments and the fourth industrial revolution with its dependence on AI and IoT, requires adhering to the basic belief that he espoused, “The ultimate purpose of collecting the data is to provide a basis for action or a recommendation.”
As organizations are shifting to be increasingly digital in both operations and guest-facing experiences, strategies must be data-driven in order to be effective and deliver desired outcomes. According to IDC’s Future Enterprise Resiliency & Spending Survey, the top three business priorities for hospitality and travel organizations to achieve resiliency are profit growth (44%), increasing innovation (34%), and improving operational efficiency (27.3%).
Driving these three core strategic goals is data – or more specifically layering data throughout all digital interfaces to optimize operations and interactions. Artificial intelligence is becoming the differentiator for hospitality and travel organizations as travelers return to the skies, seas, and hotels; and as diners return to restaurants while an increasing amount continue to engage with off-premises options.
AI-driven solutions will help organizations achieve resiliency by adapting to the digital nature of guests and employees. Organizations are seeking the ability to leverage the robust data sets that are available from increasingly connected ecosystems. This is driving focus on data optimization programs, an area 62.6% of hospitality and travel organizations will focus on for business resiliency. Investments here will include data management and analytics with machine learning and artificial intelligence capabilities layered in to enable better visibility and improved decision making. AI and machine learning-based technologies are a top strategic investment area for 22% of hospitality and travel operators, according to IDC’s Future Enterprise Resiliency & Spending Survey. That visibility provides operators with the ability to better fulfill customer needs while optimizing operations and providing seamless, contextualized services for diners and travelers. Brands are leaning into AI-driven personalization to drive value and engagement with guests as they are increasingly comfortable with digital interactions via mobile apps, digital ordering, and even chatbots.
Unsurprisingly, AI spending is on the rise, with 77% of hospitality and travel brands prioritizing investments in intelligence technology solutions such as data management, analytics, machine learning (ML), and artificial intelligence (AI) to operate effective digital enterprises. (Source: IDC’s COVID-19 Impact on IT Spending Survey (conducted July 7–20, 2020; n = 73)
Achieving data-driven customization at scale, however, is not as simple as just plugging in an off-the-shelf AI solution. To foster intimacy with guests and employees, solutions must be personalized, requiring a variety of systems to be integrated to create seamless, real-time connectivity and interactions. In fact, we discuss in further detail how travel brads can develop their own omni-experience platform to create an ecosystem of cross-channel touchpoints in the eBook, Enabling Frictionless Journeys in Hospitality & Travel. Employees must be empowered with devices and systems that will provide real-time insights into guests and passengers, through loyalty and CRM systems and then to provide efficient service need access to enterprise systems including point of sale, hotel management systems, and inventory/supply chain management.
Three key considerations for ensuring a data-rich and relevant experience.
- Integrated. The ultimate frictionless, data-driven engagement requires integrated ecosystems that are designed to deliver a true end-to-end experience and eliminates data silos. Technology stacks must be built to talk to each other in real-time and in a flexible way so that information follows guests/travelers across channels.
- Intelligent. Don’t ignore what the data says. Advanced listening tools can strengthen data strategies and ensure that digital investments align to the experiences that guests expect and want. This allows organizations to meet customers and employees where they are and want to be, rather than forcing them to use a brand-specific channel.
- Intensive. The cost of data acquisition is a significant investment, so data-driven engagements should be hyper-focused on outcomes that will drive customer retention, acquisition and upsells. For operations, data should be leveraged to identify opportunities for cost-reduction either by targeting investments or automating services when possible.
Data-driven initiatives are not a new concept. Hotel, restaurant, and travel organizations have spent many years and invested large sums of money on systems to gather, store, and analyze data. The next phase is making data work for an organization by linking sometimes seemingly disparate data together to drive seamless, meaningful experiences. To achieve the desired outcomes for investments in IT, operations, and experience, systems must be designed for an organization’s data objectives.
Organizations that have not hit the right notes with their engagement strategies yet, may consider another one of Deming’s lessons. Deming, who was also an accomplished organist and composer, wrote his own version of the National Anthem, attempting to solve for the fact that the original version is extremely difficult for the majority of people to sing (spreading out across an octave and a half).
This serves as a metaphor for one of his management credos: Don’t blame the singers (workers) if the song is written poorly (the system is the problem); instead, rewrite the music (fix the system).
Operators tuning their experience, operations, and IT strategies against the appropriate data notes will find that their entire organization hums along much better.
To learn more about the important role of data in creating technology ecosystems to support seamless experiences for guests and employees in the restaurant, hotel, and travel industries, join us for the webinar, “Enabling Frictionless Journeys in Hospitality & Travel”, live on May 12, 2021 at 11 AM/EST with Dorothy Creamer, IDC’s senior research analyst, hospitality & travel digital transformation strategies.
