Business case study

Grunge Hotel

1.0 Introduction

Grunge Hotel is a group hotel that is comprised of 43 hotels grounded in the United Kingdom. Specifically, the hotel has been growing via the acquisition of both dilapidated and run down premises, which it turns into basic hotels. The fundamental goal of the hotel is to become one hotel group that plays a vital role in providing basic accommodation at cheaper prices in the market. Additionally, the aforementioned hotel has excellent rating on websites that generate reports on hotels and this makes medical professionals recommend the hotel group to individuals that require a break from everyday life but lack sufficient financial resources.

The hotel faces various issues pertaining to the current market. To begin with, the UK government has decided that all European workers must have UK passport, otherwise they leave the nation. This has a considerable effect on the firm as many employees will leave and this makes the hotel lose qualified workers. Therefore, the hotel leadership must find qualified staff and this heightens operation costs. In addition, the company is unable to provide satisfactory services to its clients because it does not have an IT system while its rivals are running substantial IT schemes. Another issue is that some of the hotel managers are worried of transforming their accustomed work including some hates the transforming of IT system. It is unfortunate that the hotel’s transactions are done manually such as clerk keeping financial records and record keeping on phone. Specifically, the hotel does not have a standard way of keeping financial details that has to be sent to the head office every day. Therefore, the hotel is required to hire external auditors because its financial staff does not have substantial skills of record keeping. In this case, the firm must spend more financial resources to set up an IT scheme as well as hire expert IT technicians.   

1.1 Issues

Foreign Employees: It is evident that Grunge Hotel has employed individuals from Eastern Europe. The main reason is they are skilled in renovating properties. On the same note, people from Eastern Europe accept rates of pay that is below the available average market and they work diligently. In particular, this helps the firm at hand attain its objective of being the cheapest hotel. What is more, the employees play a vital role in enhancing Grunge Hotel’s excellent public image. However, this has become an issue because the United Kingdom government has decided to deport all Europeans that do not have the United Kingdom passport. Specifically, this is a challenge for Grunge Hotel because the organization will be required to look for qualified individuals who might require high pay, which in turn will force the hotel to increase its prices. In fact, this goes against the hotel’s goal because the firm will be forced to charge high prices to meet the required expenses.

Change of policy: The UK government has resolved to refocus schools away from academia as well as promote trades including decorators, plumbers, electricians, and builders, to mention a few. In particular, the hotel at hand anticipates targeting school leavers with the possibility to be excellent tradesperson to be part of the company hoping that they might be comfortable with pay levels on a par to Eastern Europeans.

Lack of Fundamental IT Systems: Grunge Hotel’s managing director has discovered that the organization experiences lack of adequate I.T systems. It is unfortunate that the hotels function individually and manually records bookings. In this case, the available financial transactions are processed manually with accounts books filed by clerks who must send transaction information to the firm’s head offices on daily. It is clear that the prevalent external auditors of the company have recognized that the end year accounts are below the anticipated standards of a profitmaking firm. The managing director understands that this is because of using finance staff who have no adequate training to keep expenses down. On the same note, the hotel management understands that solving the available IT problem requires considerable amount of financial resources and the management is concerned that the costs of the hotel will rise to an extent that the hotel might charge more for individuals to stay at the hotels.

1.2 Focus Areas

Grunge Hotel is required to come up with a new IT system. Contemporary, the organization is working via a manual scheme where many issues arise, which in turn plays a critical role in hindering the firm. To begin with, the hotel should concentrate on its IT scheme. The reason is that a manual system is dangerous for the future of the company. Therefore, the hotel should establish a new IT system that helps it to connect all hotels of the firm with head office (Laudon and Laudon 2015). In addition, the organization should employ qualified staff and workers from Eastern Europe who have passports. In particular, this ensures that the company’s workers are not chased away because of passport issues. Simply put, Grunge Hotel should focus on the aforementioned challenges to attain its set goals and objectives.

1.3 Solutions

It is high time that the hotel to focus on investing in adequate IT system and hiring qualified IT staff to make all manual transactions easier and smooth. What is more, the organization must target the qualified workers, as the firm is expecting to lose European qualified employees. Moreover, the hotel must concentrate on the rivals in the market because it has to comprehend what the competitors are doing as well as the way they offer their services to the customers. Furthermore, the organization should enhance the skill of the financial staff as well as the director, as they do not have adequate skills to perform financial recording. Last but not last, the enterprise requires to motivate managers who are ready to stay at the accustomed work not forgetting who hate the IT system change to accept the organization transformations.   

2.0 Strategic Evaluation

It is noteworthy that this is a vital segment for Grunge Hotel where its internal evaluation that includes strengths and weaknesses further external evaluation consisting opportunities and threats are examined. Specifically, the SWOT analysis plays a significant part to mitigate the costs moreover enhance the service by discussing each factor of the organization. On the same note, SWOT analysis assists in making further decisions.

                                     

                             Figure 1: SWOT Analysis from (Shaw 2017)

2.1 Internal Analysis

2.1.1 Strengths

·         The firm has adequate budget in hand

·          Grunge Hotel has strong status on the websites

·         It is evident that all European workers possess substantial competence including adequate skills

·         The company is in a position to pay law rates to the workers as compared to the prevalent market level

·         The organization has strong basement and other important demanded tools

2.1.2 Weaknesses

·         It will take time for Grunge Hotel to come up with an adequate IT system

·         The company keeps its financial records below the required standards

·         The organization has to hire external auditor to check the financial records

·         It is unfortunate that Grunge Hotel’s director lack essential skills

·         The firm is required to utilize considerable human resource owing to the lack of IT system

·         The hotel runs all its transactions manually

2.2. External Analysis

2.2.1 Opportunities

·         It is evident that Grunge Hotel’s image is on the rise for cheapest price

·         No reason for high human resource for the same job

·         The firm will experience many transformations to get the auction properties with low prices

·         No reason to utilize financial resources for places as well as tools to set up IT schemes

·         The firm has substantial opportunities to acquire qualified local workers

2.2.2 Threats

·         The organization requires to spend more financial resources on developing IT system

·         The required changes will heighten the hotel charges

·         Grunge Hotel’s rivals might get wide audience base during the renovation

·         The organization might lose its qualified and competent European workers

·         The company’s managers are against the anticipated change

3.0 Impact of IS

3.1 Key processes of Grunge Hotel

 

Fig. 2. Key processes of Grunge Hotel

The central recommended system is financial management system. The reason is that the hotel is overcoming different difficulties including recording financial records with account books that are done by the clerk. In this case, the prevalent details of finance are sent to the head office that takes some time. The recommended central system plays a vital role in holding all financial records about 43 hotels as well as enables to be accessed to them to the authorized individuals. In particular, the system will indicate that adequate financial resources are prevalent at the right time to run the business well. What is more, the recommended central system will produce correct including consistent income statement, balance sheet, moreover budget allocations. Because the system provides in-depth ad hoc evaluation abilities, allow financial professionals create custom reports to ensure unique data demands.  

3.2 Major System

It is evident that Grunge Hotel requires a fundamental system that takes care of the book keeping as well as accounting transactions. Grunge Hotel should embrace management information systems to help it control data in an effective way and in assisting individuals understand what should be done moreover the way they should utilize the data for the betterment of the firm. Notably, the suggested system above is regarded to be time saving. With that said, MIS is a well-recognized computerized database of financial data that is organized and programmed in a manner that it generates regular reports on functions for each level of management in a firm. In addition, MIS helps a firm to attain special reports from the scheme easily (Laudon and Laudon 2015). In particular, the fundamental target of the proposed system is to provide Grunge Hotel managers adequate feedback concerning their performance. Moreover, the hotel management uses the system to monitor the firm as a whole. It is important to note that data displayed by the suggested scheme indicates actual information against planned outcomes and results from the previous year.

It is important to understand that the MIS attains information the hotels units not forgetting functions. What is more, some of the information is gathered automatically from computer-connected checkout counters while others are keyed in at periodic intervals. Additionally, routine reports are programmed further run at intervals or even on demand as others is attained utilizing built-in question language. In this case, the hotel managers can utilize display functions built into the systems to check on status at desk-side devices that are connected to the proposed system by networks. What is more, available complicated schemes monitor and display the performance of Grunge Hotel’s inventory.

3.3 Functional Requirements

The MIS needs some functional requirements such as client information, inventory control and configurable price. On the same note, the MIS will track potential customers and their choice. Additionally, the system at hand should be in a position to inform the hotel management the amount of days or even times will go by the stocked coffee computing the average sell of the company’s products and services. Finally yet importantly, the system should help the management to determine the cheapest and excellent services offered to their clients at the cheapest price.

3.4 Reporting requirements

Some of the MIS reporting requirements include financial report. Specifically, the aforementioned report offers fundamental financial statements including income statement, balance sheet, as well as cash flow statement. Notably, this depicts the net profit as well as the amount of financial resources that are coming in and going out of Grunge Hotel, such as sales, inventory not forgetting other important payments.

In addition, client satisfaction report is required to offer independent and reliable measure of client satisfaction moreover latest one year ratings consisting of trends for various hotels. In particular, this report improves the hotel strength via offering competitive edge and assists to enhance customer service. What is more, performance report plays a critical role in tracking the performance of regional branches and hotels that are newly joined as well as old employees to assist the firm take a decision about them.

3.5 Comparison of Information needs of Managing Director and Hotel Managers

It is important to comprehend that decision making is vital for the firm management team to secure advancement, since wrong decisions might take the hotels to a disaster. Therefore, data concerning all hotels is required for the management team to make adequate decisions. The reason is that without appropriate data concerning the hotels, the management will be unable to make adequate decisions. In case correct decisions are not made, Grunge Hotel will experience a number of difficulties as well as challenges. For example, the organization might lose its audience and public image.

On the same note, it is important to comprehend that the information needed by the managing director is different from that needed by the hotel managers. The reason is that the managing director requires concise information while the hotel managers require detailed data. The table below demonstrates the type of information needed by the managing director and the hotel managers.

Managing Director	Hotel Managers
The MD desires to understand the hotel that possesses the highest as well as lowest income	The managers desires to comprehend every week’s highest income in a hotel
Ensuring that all hotels have adequate resources to enable them to attain their operations	Making sure that resources are appropriately used in the hotels
MD requires to know the performance as well as progress of every hotel	The hotel managers require to comprehend the team that performs excellent
The MD requires to understand the total daily revenue as well as outcome of the available hotels	The hotel managers require to comprehend the daily revenue as well as outcome of a hotel
The MD requires to understand the overall profit and loss per month of all hotels	The hotel managers need to know the weekly profit and loss of a hotel
The MD requires to understand the hotel that has a wide audience base	The hotel managers want to comprehend the type of rooms are most stayed by various guests
The MD needs to comprehend the number of customers using the hotel	The hotel managers need to understand the number of individuals that have checked in and out on a daily basis.

3.6 Biggest organizational Changes

It is noteworthy that whenever a new system is introduced to a firm, many changes as well as difficulties are experienced and they need to be overcome. In this case, the Grunge hotel is expecting an IT scheme to enhance its progresses. Therefore, having a new scheme contributes to various biggest transformations. For instance, the organization workers’ training and seminars to utilize IT on their work. What is more, the firm must look at the misunderstanding of workers on the introduced IT scheme.

Staff training is one of the biggest change that the hotel should embrace. The reason is that without the staff, the hotel is unable to implement the proposed IT scheme. Therefore, the organization should choose right workers; for instance, those interested in IT and train them to operate the system. In particular, the company should target the training system on application of new information technology scheme in the situation of the process and workers’ role (Riley 2012). Therefore, when offering training to the workers, the organization must ensure that the trainers come up with the significant knowledge moreover professionalism together with an excellent plan for mitigating the risks as well as challenges that might be experienced. On the same note, the firm’s managers should be trained to comprehend that the anticipated IT system is for the good of the company as well as employees. Therefore, no need for them to be reluctant to utilize the new system.  

The hotel should look at its layout or structure. In this case, the firm should make considerable preparations; for example, selecting the right places not forgetting decorating them before setting information technology schemes at all available hotels. The system must be put at the safe place of the company’s hotels and come up with limitations to touch them by enabling authorized individuals only to access the system. Lastly, the organization must handle employee misunderstanding on the new IT scheme. The reason is that they might think that by using the IT scheme in the hotels, workers will be reduced to save expenses (Courtney 2001). Therefore, employees must be convinced by explaining the reason IT system is important to the firm and the way it helps them to perform their daily processes.

3.7 Outsourcing

It is important to comprehend that Grunge Hotel is a 1 star; therefore, no considerable services to outsource. However, depending on the requirements of the hotel, there must be various processes to outsource to acquire satisfaction of the audience and make the hotel’s process faster. Notably, the organization at hand has trouble with their modern manner of operation such as record bookings on phone and maintains incorrect financial information. Therefore, the hotel’s managing director is ready to possess an information technology scheme for the firm. Specifically, hiring IT professionals moreover make them come up with IT system in the firm is considered expensive. Therefore, outsourcing a software house is the better option. On the same note, the hotel’s management team will face some difficulties to manage and control IT professionals because they have no relevant knowledge and management experience to supervise them. What is more, the hotel is required to outsource needed services as well as server maintenance for the IT scheme.

3.8 Disaster Recovery Planning

The management team should comprehend that there might be various disasters including flood, storm, earthquakes, and eminent hurricane. Therefore, the hotel must be aware that a disaster might take place as per the case study. No matter how low or high the disaster is, the hotel should observe beforehand preparation (Phillips 2015). Prior to a disaster, the firm should come up with an excellent plan that includes the detailed procedures and guidelines of restoring destroyed servers and determining a place to set up for temporary to determine the way to overcome a disaster. Notably, data and adequate information is critical to run the hotels and this must be backed up safely utilizing hot site before doing something else. On the same note, during the disaster, the hotel should ensure that its employees would be informed immediately and implement them to act according to the plan (Sahebjamnia, Torabi, and Mansouri 2015). Lastly, after the disaster, the firm should call for an urgent meeting and make a quick resolution for resuming the business in a short time by looking from a nearby environment to locate the server.

3.9 Persuading Managing Director

The managing director should be persuaded to purchase necessary tools such as computers accessories to ensure that IT system implementation is successful. On the same note, being a decision make, the MD should be persuaded to invest for IT systems in the firm. In simple terms, this will help the firm acquire required IT system. Overall, the firm should set IT systems to make the modern processing easier and smooth. This helps employees get adequate satisfaction that is regarded vital for a firm.