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)
22nd May 2011
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.
Background
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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.
Three top corporate priorities are:
1. Profitability
2. Preference
3. Growth
 Revenue management
-main function: analyzing revenue data for
forecasting and marketing (adjust price
according to demand )
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, 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 inhouse, 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, 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.
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 revenuemanagement 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
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?
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.
Q5: Summarize the reasons why a company would
choose to outsource rather than develop a system inhouse.
Answer:
 Management Advantage
 Cost reduction
 Risk reduction
 Expertise
 Availability
 Flexible Capacity Management
 Time Zone Coverage
 Management Advantage
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.
 Cost reduction
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Economies of scale- centralized
Part time
Indirect cost saving-focus on core
business
 Risk reduction
Risks are lower with purchased software
since the software has been tested before
releasing to the market.
 Expertise
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.
 Availability
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Highly skilled people is hard to find and if
available are expensive to recruit due to
the specialized area.
 Flexible Capacity Management
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enables company to manage its capacity
and staff.
The task of hiring personnel is passed on
to an external provider .
 Time Zone Coverage
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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.