THE GROWING INTEGRATION OF POS

Often regarded as merely a necessary evil, point-of-sale (POS) systems deserve a closer strategic look. Logic tells us that a sound POS, well-implemented, can reduce costs, improve controls, accelerate service delivery and generally enhance the guest experience. Effective POS implementation enables the hotelier's ideal of effortless service. Done poorly, POS is, at best, merely a necessary evil. This brief examines some of the current trends in POS. A future article will discuss the differences between POS done well and POS merely installed.

The most visible trend in the hotel POS universe is full integration with hotel property management systems (PMS). Several leading providers of hotel PMS have released fully integrated POS modules, including PAR Springer-Miller, Northwind, Visual One and MSI. These offer a single point of contact for both PMS and POS vendor relationships, with a greatly reduced total cost of ownership (TCO). Managing down TCO is strategic nirvana for hotel managers who want to be in the hotel business, not the IT business.

Fully integrated POS systems reduce TCO for ownership and management in these key areas:

  • Hardware: A PMS-integrated POS resides on the same server infrastructure as the hotel's PMS, eliminating the cost of a server dedicated to POS

  • Software: Residing on the same server generally means using the same operating system, database and possibly even client access licenses as the PMS, eliminating those cost areas

  • Support: Looking to the same support organization for both PMS and POS usually entails greatly reduced support costs. A significant corollary benefit comes with the “one neck to choke” premise, where a single vendor cannot blame the other side for interface problems, perhaps the most intractable POS issue

  • Training: Commonality between architecture, system logic and training and installation personnel from vendors means fewer trainers educating more employees in less time with fewer trips, a key factor in reducing hard TCO elements.

These broad trends are good things for the industry, even though some vendors are retreating from long-announced integration strategies. The successes of other vendors and demand from clients continue to prove the strategy a winner in this space.

Another trend worth monitoring is that centralized systems are now proving viable. These architectures support many outlets in disparate locations using either a private data network or the Internet. Sometimes described as embodying the application service provider (ASP) model, these designs reduce TCO by packing more terminals, outlets and locations onto a single hardware, software and support platform. One client of ours has built out its own ASP system using the Infogenesis platform. This implementation supports 60 terminals and 21 outlets in 16 different locations throughout Boston, using a combination of a private data network and virtual private network (VPN) to service locations not on the private network. A closely related trend is that very large local system designs become plausible, perhaps exemplified by stadium systems such as offered by MICROS Systems.

Another aspect of the issue related to larger or distributed POS applications is the concept of polling distributed systems and reporting sales and inventory detail back to a corporate host. More common in restaurant chains than in hotel management companies, this strategy leverages insights to drive both menu engineering and purchasing efficiencies in addition to centralized reporting.

Other key trends to track:

  • Continued dramatic decreases in hardware, operating system and database costs

  • Greater appreciation of the numerous differences between f&b and retail POS. As hotels, particularly full-service independent properties such as our typical clients, need to drive increased profitability, better margins from retail outlets can create bottom-line budget makers.

Mark G. Haley manages the technology practice for The Prism Partnership, a management-consulting firm servicing the global hospitality industry. Reach him at 978-521-6300 or mhaley@theprismpartnership.com.

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