In the last few years, disruption to global industries rocked the world affecting all manner of businesses and creating seemingly insurmountable hurdles. The hospitality industry was one of the worst hit sectors, experiencing the biggest economic declines of all sectors. Overall, hospitality economic output during 2020 was 42% lower than during 2019; and in 2021 output was 21% lower than 2019. In addition to governmental support, these businesses needed their suppliers in new found ways if they were to survive the pandemic.
The hotel management company operates seventeen hotels throughout London, including the Hard Rock Hotel, Tower Hotel, and Royal Horseguards. In order to establish and maintain operational efficiency and financial visibility across its portfolio, the company has been working with a dedicated SAP consultancy, Absoft, since 2015.
First things first
In 2015, the company identified that they were using an out-of-maintenance, on-premises version of SAP, and appointed Absoft to upgrade the system and migrate it to the Azure Cloud. In addition, Absoft provides the company with SAP User Support, SAP Systems Landscape Support, and SAP System Optimisation. As a result of the initial system upgrade and as part of Absoft’s System Optimisation services, it learned of three key operational / financial workflows that could be improved: Order to Cash, Record to Report, and Purchase to Pay.
Initially, the hotel business focused on Order to Cash as, from the moment a guest makes a reservation until they check out, it collects data on the customer’s interaction with the business. By tracking the customer journey throughout their stay, the company is able to determine all the revenue points in the journey, for example by using the minibar or restaurant on site, which is then converted via SAP to the back office system.
The company also used Absoft and SAP to improve its Record to Report and Purchase to Pay workflows, which involved collecting, processing, and delivering relevant, timely, and accurate information that could be used to provide strategic, financial, and operational information to understand the performance of the individual hotels, as well as the overall business.
Covid Closure
However, in the middle of the optimisation process for Purchase to Pay, the company faced a situation where, in July 2020, just 20% of rooms across their portfolio were occupied – compared with 90% in the same month the previous year due to the acceleration of the global pandemic.
Recognising the financial predicament the business was facing, Absoft amended its SAP support arrangement to be sympathetic to the new socio-economic circumstances, adjusting its support hours to accommodate the closing and reopening of the company’s hotels.
Therefore, it became increasingly evident that the optimisation and roadmapping process also needed to be put on hold. With the business using fewer contracted hours as hotels were forced to close, and systems no longer in use, there was both no need for support and little live data to inform process improvements. Consequently, Absoft maintained its flexibility, allowing the hotel chain to use as many or as few support hours as they wanted. Additionally, Absoft engaged with the company on a weekly basis to discuss how the company’s services could best accommodate a rapidly changing hospitality environment.
Don Valentine, Commercial Director, Absoft commented, “Our long-standing relationship with the hotel management company allowed us to work closely with them during these challenging times to identify how they could better use our services to guide them through the immediate business threats, but also to put them in the best possible situation for success when they were out the other side. We now welcome the opportunity to continue our process optimisation, unlocking further smart Azure capabilities, as well as roadmapping them towards S/4HANA.”
Absoft have supported clients, large and small, across a range of industries with SAP implementations and migrations since its inception, and have worked on SAP in the cloud for over ten years. Having conducted hundreds of SAP migrations, Absoft is ideally positioned to help and advise on implementing SAP in the cloud, or migrating on-premise SAP systems into the cloud…
