Three years ago, executives at Chicago-based Hyatt Hotels decided the company needed a way to consolidate its disparate financial data so that it could more easily forecast future sales and plan its business accordingly. In other words, the company wanted to install a typical financial performance management layer, with dashboards and scorecards for top-level managers. But after some discussion on the matter, the installation grew not-so-typical. Gebhard Rainer, Hyatt's vice president of hotel finance and systems, wanted to combine these financial elements -- budgeting, planning, modeling, and reporting -- with operational data from the hotels themselves. The idea was that a complete picture of the company's business, available on a daily basis to executives as well as hotel managers, was not possible without having the two together in the same dashboard.
Motivating the concept was a changing world, with terrorist risks and natural disasters causing an ever-shifting array of business variables. Rainer, in a Middle Eastern country in the aftermath of a terrorist attack several years ago, confronted these issues first-hand -- as did the company, which owns hotels in New Orleans and along the hurricane-ravaged Gulf Coast. The first line of business is the safety of hotel guests. But in terms of the big picture, hotel companies must re-forecast their business goals from the ground up based on a set of entirely new metrics dealing with issues from resource allocation to skittish tourists rethinking their travel plans. It wasn't a job for spreadsheets.
Privately held Hyatt proceeded slowly with its plan. The first phase involved implementing only the financial consolidation programs. Establishing that "single version of the truth" was the primary goal, whether it was quarterly earnings reports for the IRS, investors or executives. The company looked at four or five vendors, including Cognos and Business Objects, says Sufel Barkat, Hyatt's assistant vice president for financial systems. Hyatt selected Hyperion based on its "integrateability" with the company's source systems, as well as its user-friendliness, he says.
Phase 2 of the plan arrived last year, when Hyatt decided it was time to build a business-intelligence layer on top of its already-existing financial performance management system. Again, the company hunted around for vendors. "We actually didn't even think Hyperion had a BI offering, but that proved not to be the case," says Barkat. Indeed, Hyperion had purchased Brio about four years earlier, which represented its entry into the BI market. (BI now accounts for around half of Hyperion's business, says Rich Clayton, the company's vice president of product marketing.) Hyperion, then, had a product to sell, one that seemed to dovetail with Hyatt's original requirements.
The product, called System 9, was in beta testing at the time. It represented an evolving philosophy and marketing strategy for the software vendor. Referring to financial performance management and BI, Hyperion's Clayton says, "We believe strongly that those two are becoming more integrated than ever before. IT departments are having to get smarter about the needs of financial departments. They can't avoid it. That means that IT will take more ownership of financial management and consolidation and forecasting. And if companies are going to be under cost pressure, they're going to look for products that bridge the two." Essentially, Hyperion fused its financial performance management offerings with its Brio-purchased BI systems -- financial consolidation, financial planning, analytical engines, reporting engines -- all of it delivered to the user via a common dashboard.
Hyatt was among the first of Hyperion's customers to adopt System 9. The installation began in October 2005 after Hyatt renegotiated its contract with Hyperion. (Neither company would disclose terms for this article. The price tag on an entry-level System 9 implementation would run about $50,000, says Clayton. Cost would vary, of course, according to the number of users and the complexity of the data sources on the backend.)
At first, Hyatt wanted a small-scale installation, delivering the System 9 dashboards to about 40 executive users. "This phase was a 'show-me-what-you-can-do' thing," says Barkat. "We simply wanted to understand the capability of the tools. The next stage will have a much bigger impact." The ultimate plan is to spread the system throughout the Hyatt organization to its many subsidiaries, in the U.S. and abroad, and to its individual properties -- full-blown operational BI. Eventually, hotel managers will have access to dashboards, so that everyone is on the same page, and so that local employees can make local decisions based on the same information viewed at headquarters.
In the meantime, Hyatt is still in the process of determining key metrics. And because Hyatt was a "beta site" for System 9, both vendor and user had to spend a few months working out some kinks. "There were implementation challenges," Barkat says, "but nothing more unusual than what you see with any test or beta software." In the testing phase, he goes on, "we had many performance issues, but 90 percent of those have been cleared up." At first, after each type of report was added to the application, response time on the dashboards was sluggish. It took 30 to 40 seconds for a screen to load, Barkat says. "But we have it down to five to eight seconds now."
The suggestions made by Barkat and his team eventually led Hyperion to make some alterations to their core product offering. The sluggish response time arose because of the way Hyatt wanted the dashboard interface to navigate: Instead of System 9's original paging point-of-view capability, Hyatt wanted a single set of drop-down menus across the top of the interface to control four pages at once and, thereby, access both operational and financial data simultaneously. In other words, the company wanted the menus to access individual hotel performance and their key metrics (occupancy, room rates, etc.) along with budgeting scenario data and sales forecasts for the whole company and its subsidiary units.
This made integrating the interface with all those data sources something of a challenge -- "logistical concerns" in Barkat's words. Hyatt ended up using a data warehouse from Teradata to cleanse operational information coming from the de-centralized ERP systems of Hyatt's individual hotels around the world. The company also uses the warehouse to store and cleanse external marketing data, such as what the competition is up to, or market share in each region. On the financial side, other sources include the proprietary company's general ledger system and an Oracle database -- systems already consolidated and unified through Hyatt's original performance management outlay.
The next step will be to deliver the dashboards to between 500 and 600 users at Hyatt -- all the way down to the regional manager level. The full-blown operational BI roll-out, which will target around 3,000 users, won't occur until 2007, says Barkat. So far, in these early stages, Barkat hasn't been able to quantify the results of System 9 with any real figures. But, he says, users have been providing feedback on metrics, which, to him, indicates a strong "cultural and business adaptation" among Hyatt's executive class.