SaaS Model: Benefits, Challenges and Solutions for Hospitality Sector

This report examines the application of the Software as a Service (SaaS) model within the hospitality industry, focusing on the benefits, challenges, and potential solutions. It begins by defining SaaS in the context of cloud computing and identifies its relevance to the hospitality sector. The report highlights two key benefits of adopting a cloud-based SaaS model: improved guest experience through enhanced staff collaboration and responsiveness, and a consolidated customer view that enables hotels to capture and utilize customer interactions effectively. It then explores three significant challenges associated with implementing cloud-based information systems, including technical issues like performance unpredictability and data lock-in, complexities related to inter-cloud architecture, and the need to maintain operational consistency across different methodologies. Finally, the report proposes three key approaches to overcome these challenges: addressing technical issues by ensuring compatibility and seeking vendor support, employing strategies like inter-cloud bridging to address architectural complexities, and utilizing a combination of technologies such as virtual editions and device service clusters to maintain operational consistency. The report concludes that the SaaS model presents an effective solution for hospitality organizations.

Managing knowledge

TABLE OF CONTENTS
1. INTRODUCTION....................................................................................................................1
2. DEFINITION...........................................................................................................................1
3.......................................................................................................................................................2
a)..................................................................................................................................................2
b)..................................................................................................................................................3
4.......................................................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

1. INTRODUCTION
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.
2. DEFINITION
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.
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3.
a)
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,
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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).
b)
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
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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).
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4.
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 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.
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 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).
CONCLUSION
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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REFERENCES
Journals and books
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Computer Interaction (IJMHCI). 2(3). pp.31-43.
Chen, D. Q. and et.al., 2010. Information systems strategy: reconceptualization, measurement,
and implications. MIS quarterly. 34(2). pp.233-259.
Choi, S. Y., Lee, H. and Yoo, Y., 2010. The impact of information technology and transactive
memory systems on knowledge sharing, application, and team performance: a field
study. MIS quarterly. pp.855-870.
Galliers, R. D. and Leidner, D. E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Holsapple, C. ed., 2013. Handbook on knowledge management 1: Knowledge matters (Vol. 1).
Springer Science & Business Media.
Laudon, K. C. and Laudon, J. P., 2011. Management information systems (Vol. 8). New Jersey:
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organizations. International Journal of project management. 29(7). pp.877-888.
López-Nicolás, C. and Meroño-Cerdán, Á. L., 2011. Strategic knowledge management,
innovation and performance. International journal of information management. 31(6).
pp.502-509.
Melville, N. P., 2010. Information systems innovation for environmental sustainability. Mis
Quarterly. 34(1). pp.1-21.
Oliveira, T. and Martins, M. F., 2010, September. Information technology adoption models at
firm level: review of literature. In European Conference on Information Management
and Evaluation (p. 312). Academic Conferences International Limited.
Österle, H. and et.al., 2011. Memorandum on design-oriented information systems
research. European Journal of Information Systems. 20(1). pp.7-10.
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Power, D. J., Sharda, R. and Burstein, F., 2015. Decision support systems. John Wiley & Sons,
Ltd.
Ward, J. and Peppard, J., 2016. The Strategic Management of Information Systems: Building a
Digital Strategy. John Wiley & Sons.
Yates, D. and Paquette, S., 2011. Emergency knowledge management and social media
technologies: A case study of the 2010 Haitian earthquake. International journal of
information management. 31(1). pp.6-13.
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