Outsourcing In The Hotel Industry Business Essay

Outsourcing In The Hotel Industry Business EssayChapter 11.1 IntroductionOutsourcing is the opportunity for the system in cordial reception industry and some others industry as well which quarter provide assist and harvest-home for them and flowerpot rise their profitability with forth producing things be internally. As an spokes someone Hotels loafer disclosesource their nutrient and beverage, marketing exe issuee, HR address etc., from their outsource provider. By outsourcing business firms support get to a greater extent opportunity in the market to sack their business in a discontinue way.Becouse it seat be really fortune free and more productive in price of the flexibility and availability. harmonize to Fair and Shaw (1997) abstract, outsourcing can be defined as the process of acquiring an item that the union cannot produce internally. It engages delegating or re inductmenting an internal service or role with an outer service which is provided by experts who be skilful in the condition of that service accordingly.In another(prenominal) way outsourcing is the way to operate a business with less management and surgical process riskiness and within a time frame. It can increase the profitability within the organization and can enhance the tag image in terms of better service and efficiency. Because when firms prefer the outsource rather than doing things by won they can get some more option and more trust and less risk which can incur their service more effective and productive.1.2 Problem StatementIn the new worldwide economy, outsourcing has becoming a central issue among expert in the hotel industry. Outsourcing is a method, which has been adapted by various companies to provide various services to customers and employees. Someone else, from an external resource, implements outsoaring. By using this method, it helps the company to reduce cost. Most companies use outsourcing/third party for better efficiency. Established compa ny utilize this method to improve their service quality. Outsourcing provides specialised functions to help complete the task. In fact, many hotels are opting for the outsourcing business strategy to help the hotel business in keeping up with their rival hotel and the kindred time cut on their cost.In the inquiry paper it discussed that the benefit of hotels outsourcing of HR and Marketing section. So, the problem statement isTo what extant hotels are benefited by doing outsourcing -a shoot on spend lodge hotel.In the research work, the researcher must consent really clear understanding of the topic or problem they are investigating. Without clear and sufficient notional knowledge it will become difficult to conduct any research work. For my research topic it is important to make theoretical knowledge about the functions of outsourcing in order to analyse the importance, impact and prospects of outsourcing.This research work could not be completed properly without collectin g data and abideing in cast of charactersation correctly and using them appropriately. A lot of text books, reference books, journals and reports were consulted to prepare this research work in line of the aim and objectives of the research work. The roughly important task was to get the primary data from the management squad of Holiday student lodging Hotel.1.3 Research brainIts absolutely essential to develop a research question that I interested in or care about in order to focus my research and my paper .This study is facility up to arrange following research questionTo do outsourcing is a good idea for hotel business?Is Outsourcing more effective than doing things by suffer?How outsourcing can hold in some extra benefit for the organization?How outsourcing can reduce the cost and risk for the organization?What are the main reasons for outsourcing HR and Marketing process?How outsourcing has positively contributed to the fiscal position of the hotel?How correctly execu ted outsourcing can enhance the hotels militantness?1.4 Significance/scope of the researchThis research can help individuals, curiously decision-makers and planners, as well as firms identify the various components of outsourcing that can bring many potential benefits, such as cost reduction, performance improvement, flexibility, specialisation, and access to figure on the business of hotels by utilising it. It is a fact that most companies are at under great pressure to take up outsourcing as a major competition. The Hotel Industry is one of the thriving businesses in the world. In fact, in this globalised world many hotels are opting for the outsourcing business strategy to help the hotel business in keeping up with their rival hotels and at the same time cut on their cost.For this case study I want to try to find out to what degree the hotels can benefit from outsourcing their HR process and Marketing process from the study of Holiday order hotel in Brentwood, UK.There are tw o types of outsourcing which is utilize in the hotel industry. This includes selective outsourcing and complete outsourcing. Selective outsourcing pertains to certain functions which are chosen for outsourcing, which can be the database of customers or accounts records of the hotel and etc. On the other hand, complete outsourcing refers to the altogether function which is outsourced. Though hotels are recognising the importance of outsourcing, this does not mean that this business strategy is applicable to all.Outsourcing can be viewed as the process whereby activities traditionally carried out internally is contracted out to external providers. Outsourcing has become a significant facet of modern hotel management. As the market for outsourcing grows, it will confound a salient impact on how businesses are structured, managed and viewed by witnessers, employees, and customers. In spite of fairly extensive coverage given to hotel outsourcing management issues, there has been lim ited academic research in this area. Besides, no specific accounting focused studies concerned with hotel outsourcing have been found in the belles-lettres.1.5 Research ObjectivesThe purpose of this research work is to examine and esteem the effectiveness of outsourcing of the hotel.The main objective of this research is to examine and discuss the influence the outsourcing of the hotel and its impact on cost and benefits. This research work as well as aims to provide an incursion of how important the outsourcing is to increase the productivity of the hotel.Outsourcing carries significant implications for a hotels cost structure and control procedures. In light of this, it is important that hotel accountants are appropriately equipped to rook an active role in outsourcing decision-making and control. The objective of this research is to provide a management accounting perspective on issues surrounding hotel outsourcing management. This work outlines the many cost and benefits th at should be considered when deciding whether to outsource.The objectives are as followsTo criticallydiscuss the effect and influence the outsourcing of the hotel on business performance.To study about how does outsourcing is managed by the hotel.To discuss and identify critically how it helps cut costs while managing outsourcing.To discuss about how it help compete with other hotels in order to cut costs and earn profits for the hotel.1.6 Ethical IssuesIn preparing my research project it is important that I need to consider with the ethical issues that will arise when I was collecting data and trying to make conversation with deal. I also believe seriously the human rights and wrong of what I may be undertaking and the moral values and principles that guide my actions. I have done my communication section very clearly and sincerely for the understanding of the nature and reasons for my research, whom it may benefit and how, and what costs orrisks are involved for informants. I re spect peoples even they are not cooperate with me, orpull out from the project. I also tried to avoid, or at least acquire some ladder to reduce, pointlessDestruction, hazard or false to the collection of people I was learning and running(a) with them as well as sourcing embarrassment to them. I tried to protect the individuality of respondents where essential andtreat them with respect. For the privacy I did not allowed any third parties access to sensitive information Imay have obtain. Regarding the confidentiality it was totally in memory contracts with the person, the group of people, or an organisation, about what may be done with their data. Regarding the anonymity I can give the certainty that there was a require of identifiers vis--vis information that basically indicate which individuals or organisations provided which data.Consideration of the above issues clearly I can take it very critically when I need to handle the responsive information.1.7 HypothesesSuccessful imple mentation of outsourcing can result in enhanced brand recognition and profitable for the hotels.Outsourcing can reduce cost and risk and can give some better feedback for the organization.Outsourcing can enhance hotels competitivenessOutsourcing can be a positive component part for the financial position of the hotelChapter 22.0 Literature review2.1 Introduction of Literature review2.2 OutsourcingContract with two organization one is outsource supplier and another one is outsource holder . most of the big companies currently prefer the outsource process for their different type of service, such as call canter services, food and beverage outlet-mail services, recruitment process ,Marketing and HR process. Those processing can be handle by the supplier and outsource holders can trust them to the full because outsourcing providers basically more careful and aware regarding their responsibilities.Knowles and also Davis .Lockwood, Pantelidis and Alcott (2008) define contract catering and food services management as operations that provide meals in outlets that do not have the provision to produce them. Moreover Coates (1971 cited by Wilson, Murray, Black and McDowell 199874) define a contract caterer asAn individual or company, who in recognition of financial reward, will undertake to administer, control and direct a specified catering operation within the guidelines stipulated by the client company.2.3 Reasons of outsourcingAlthough the main objective of outsourcing is very much cost reduction, many companies fail to realize any cost benefits. In particular, Gartner is predicting that by 2007, 80% of organizations that outsource customer service projects with the primary goal of cut of meat costs, will fail in that attempt. Part of the reasoning behind this statistic is the high staff attrition rates at outsourcing companies, sometimes as high as 80% to 100%. Combine this added cost from attrition along with the hidden costs of client loss due to increased fr ustration and its clear that an outsourcing engagement, if not careful monitored, can easily fail.Among the lots of reason of outsourcing some constitute reasons are flexibility, cost reducing, availability, good quality etc. any those factors are influencing the organizations of cordial reception industry to go for outsourcing. It can reduce the risk management for the particular organization as well. Another important reason for outsourcing is the time convenience in terms of quick service.Outsourcing is an important phenomenon in hotel sector. It is changing from a tactical to a strategic perspective, with greater scope and relevance to the creation of competitive advantages. The beginning up of hotels to outsourcing and strategic alliances improves individual competitiveness, but also has strong repercussions on destinations, especially those in a stage of maturity and requiring new approaches to improve competitiveness. This reassign in inter organizational relationships t o a strategic perspective requires new theoretical and practical frameworks to make it easier for hotels to outsource their operations with greater potential for competitive advantage.2.4 Outsourcing and organizational performanceOutsourcing is piquant to senior management because it improves some of theDimensions of organizational performance (Lilly et al., 2005). According to the survey, conducted by Accenture and the Economist Intelligence Unit, two-thirds of the respondents all of whom had been outsourcing a major business process for at least two years agreed that outsourcers who know how to manage the process can enhance their companys performance and achieve a high level of satisfaction with the results (Lacey and Blumberg, 2005).Gilley and Rasheed (2000) proposed that organizational performance in hotels improves for three reasons. First, an increased focus on a firms core competencies is an important benefit associated with outsourcing (Dess et al., 1995 Gilley and Rashe ed,2000 Kotabe and Murray, 1990 Venkatraman, 1997). The evolving literature on core competencies has been concerned with the make-or-buy decision that every firm faces. Should a hotel run its own restaurant, clean its own rooms and common areas, and trim its own trees, or should it outsource these tasks to vendors that specialise in catering, janitorial services and grounds keeping (Espino-Rodrguez and Padron-Robaina, 2005 Taylor, 2005 Walker and Weber, 1987)? Ronald Coase (1937) first tackled this question 70 years ago in a classic article. His broad argument was similar to Adam Smiths if an outside party can do the work more efficiently and inexpensively than can the firm itself, then the outside party ought to do it if the firms employees can do the problem better, then the work ought to remain in-house (Bahli, 2002 Espino-Rodrguez and Padron-Robaina, 2005 Taylor, 2005).2.5 Conclusion of literature reviewThere are a number of studies that focus on explaining the effect of outsou rcing. Abraham and Taylor (1996) find that firms contract out services with the objectives of smoothing production cycles and benefiting from specialisation. Raa and Wolff (2001) find a positive association amongst the rate of outsourcing and productivity growth (Jiang and Qureshi, 2006). Elmuti (2003) also provided support for empirical evidence for an outsourcing-productivity relationship. He found that outsourcing accounted for about 40 per cent of the variance in productivity. some(prenominal) outsourcing studies in hospitality industry debate the advantages and disadvantages contractor catering and food service management operations. This research critically discuses to what extent hotels can benefit from outsourcing their food and beverage operation. A hotel may benefit from outsourcing their Food and beverage facility because managers can focus on their core competency. Also, it brings to the hotels external suppliers investment and with it innovation at minimum financial ri sk. For this reasons hotels are likely to gain better competitive advantage.Chapter 33.0 Methodology3.1 The nature of studyIn light of the substantial transnational literature describing hotel outsourcing, it appears that outsourcing in hotels is relatively limited. Like there are some key sections for outsourcing for the hotel Industry those are HR process, marketing and pay roll.3.2 Source of data and Data Collection ProcedureThe research has been conducted with primary data. For the primary data collection process I used the qualitative date collection process which is audience base. For my study I chose structure interview and fain a list of question. Based on my question I have done my interview through asking question step by step which helped me to get result very clearly.3.3 Population and Sample Size of this StudyHoliday Inn is the UKs largest and fastest-growing hotel brand with over 580 budget hotels and more than 40,000 rooms across the UK and Ireland And from all of them my research area is Holiday Inn Brentwood, UK, were considered as the population for this study. From the management team 8 to 10 were selected as the respondents for collecting the data for my research.The responses of the respondents interviewed were analysed to gain insights into qualitative aspects of the outsourcing activities used by their firms. Qualitative analysis of the collected data from the respondents firms has been made.3.4 call into question QuestionThe research data were collected using Interview Question. At first a request letter were e-mailed to all the operation management team of the Holiday Inn Hotel , a population of more than 8 team members in total. In all, 3 responses were received, representing a response rate of over 40%. And finally got the appointment for the interview with the Operation Manager of Holiday Inn Hotel and two of the members from their management team. Non-response bias may also possibly have affected the results.Respondents were asked to answer their question step by step .interview question was divided into three sections, each of which is detailed below. A copy of the questionnaire is included as Appendix 2.Interview with Operation ManagerIt was a face to face interview and the time period was one hour. There was a sample question which contains 3 sections. All regarding outsourcing of Holiday Inn hotel. First section was regarding outsourcing functions and benefits second section was regarding the suppliers and quality of outsourcing and the third section was the opinion part of the respondent.Interview with the management team membersIt was also a face to face group interview with two management team members. It was more than 30 munities discussion and was a very effective school term for my research.LocationThe interviews were in Holiday Inn Brentwood M25, Jct.28, and Brook Street, Brentwood, CM14 5NF United Kingdom.Other detailsThe research was conducted between 5th December and 6th December 2010.Res pondant was Ujjal Chwdhury the operation Manager, Ashfaq Khan and Azaz Bhimani the management team members.The researcher is Farhana Sorker.4.0 Finding and Analysis4.1 Background of the organizationThe first Holiday Inn opened inMemphis,Tennesseein1952. The range of mountains was established to provide inexpensive accommodations for families and travelers within the US. It was acquired by the Intercontinental Hotels Group(IGH) in1990.In October2007, IHG announced a worldwide relaunch of the Holiday Inn brand including a redesigned welcome experience along with signature bedding and bathroom products.Included within the Holiday Inn brand isHoliday Inn Express, a mid-priced chain of express hotels which focuses on value and convenience for business travelers who dont require more than the most standard amenities.4.1.1 Brand Image of Holiday Inn Hotel ane of the worlds most recognised hotel brands with a global reputation for service, comfort and value. Holiday Inn offer todays busine ss and unoccupied travellers dependability, friendly service and modern attractive facilities at an excellent value and at convenient locations throughout the world. Since 1952 Holiday Inn Hotels have provided the services business travellers need, while also offering leisure travelers a comfortable, casual atmosphere where they can relax. And now, a global relaunch of the Holiday Inn brand family is in its final stages and is expected to be complete by the end of 2010. The relaunch will improve quality and service levels, and repulse consistency, creating a new, more contemporary brand image at all Holiday Inn hotels around the world.4.2 Summary of findings4.2.1 Outsourcing Function in Holiday Inn HotelHoliday Inn Hotel working with Hcareers to outsource their recruitment process which is basically working for their workforce. Hcareers have a very good image in the market as a outsource provider.And they are providing the accurate one in the accurate place for theorganization.Cur rently Hcareers operating their business among three countries, those are US which is Hcareers.com , Canada which is Hcareer.ca and Hcareers.co.uk in United Kingdom. And all are working for the hospitality related organization. Who are looking for the job in the hospitality sector they can go and open the page and can apply over their.Hcareers trying to provide more flexible governing body for the job seeker. According to the operation manager of Holiday Inn Hotel it is clear that they are really happy with Hcareers service and they are getting the right person in the right place for their organization.Also they are working with caters.com for their outsourcingAnd for their marketing process they are using HS company and getting all the services for their publicity process.4.2.2 Benefits of OutsourcingOutsourcing is the exercise of getting service from outside firms to maintain work usually performed within an organization which can be a familiar concept. Holiday Inn currently outs ources their recruitment processing and marketing as well.Most of organization do not concern about the benefits of outsourcing. Outsourcing can reduce cost and hold on money, which can be a big reason to go for outsourcing but there are some more reason as well .outsourcing can reduce the management risk for the organization and can give a financial support as well. Flexibility and availability of service or product is an good example as well. And Holiday Inn is one of the companies getting the following benefits from the outsourcing.Control capital costsreducing cost for the organization is not only the good point to outsourcing but also it is a really major factor. Outsourcing exchange fixed expenditure into changeable expenditure, which can make free assets for savings somewhere else in their industry, and allows them to stay away from huge expenditures in the early phases of their business. Outsourcing also makes their organization more attractive for the investors, since the y are able to drive extra assets in a straight line into revenue-producing performance.Increase efficiencyDoing everything by own the companies need to follow some more investigate, expansion, promotion, and delivery charge. Thats why Holiday Inn decides to do the outsourcing process. By outsourcing they are getting more efficiency in their business.Reduce labour costs.Maintaining the HR department by own can be very costly for an organization, and its also heard to get feedback on right time by the temporary employees. So that Hiloday Inn working with Hcarear and caters.com and this Outsourcing by which they can focus their human resources where they require them mainly.Start new projects quickly.Holiday Inn getting the best service and facilities from their outsourcing firms. Because of the flexibility, efficiency and availability they can start a new project within a very short time and can get the services from their outsource providers as their requirement. boil down on your co re business.All organization has restricted capital, and all managers has inadequate time and concentration which is not different for Holiday Inn. Outsourcing aid them for their business to start its focal point from tangential performance toward work that hand out the customers outsourcing helpful for managers to place their precedences extra evidently.Reduce risk.All business has some risk and they have to face it when they operate their business. Every thing can change very quickly in this world .Outsourcing providers take for granted and handle this risk for the Holiday Inn Hotel, which normally a large amount better for come to a decision how to avoid risk in their section of proficiency.4.2.3 SuppliersHcareer and caters.com and HS company are the outsource suppliers for Holiday Inn Hotel.Hcareer and Caters.com is for their recruitment process and HS Company is for Marketing strategy.4.2.4 Quality maintain by outsourcingThe Product Specification Quality Requirements (PSQR), The ultimate goal ofThe PSQR is to act as a central point to assemble, share and verify critical information related to the product. The Product Specification (PS) details the products vizor of materials, packaging and other physical components and their assembly or relationship together. The Quality Requirements (QR) details what is expected from the product in terms of appearance, workmanship, performance, testing and packaging. Together they form the complete PSQR, which becomes a controlled document, and becomes the marching orders for the Quality Team at the outsourced manufacturers facility to see that the product produced and shipped is equivalent to everything outlined and detailed in the PSQR. Typically, the development of the PSQR is a cumulative and additive process with a focus on continuous improvements over a reasonable amount of time. Team involvement is essential to make the PSQR comprehensive and relevant for all users. Seldom is it perfect from the start. It is on ly after considerable contributions and sharing / debating by various personalities and disciplines within the system that a PSQR can be at its peak of usefulness and relevance. All participants in the PSQR development process must pay very close attention to details to fix success. The following template has been developed and refined over a number of years in practice of managing the quality of products at outsourced suppliers facilities. Designed to be prepared in close collaboration with the outsourced supplier it presents a standard format for compiling the Product Specifications and Quality Requirements and may easily be adapted to meet special requirements as needed. In this way Holiday Inn getting the more quality service from their supplier and controlling the quality of their company.5.0 RecommendationThe key things for outsourcing that have to have a good negotiation power when an organization decide to do any outsource, need to have a right people in contract respect to details to be actually tern on the negotiation basis and the contract need to be actually followed up so ether way in terms of breach of contact than both party should know in respect of what is can do things and what cant do things in respect to the both of the organization (Outsourcing provider and outsourcing holder) to help.And the same time the cost element effect organization can subsidise quite a lot because the delivery will be on time.So based on that its better for organization to move forward and to get a better product and resource its better to go for outsourcing.6.0 ConclusionAt the end of this research it clearly understandable that hotels are really benefited by doing outsourcing in terms of management risk and cost quality control process. It can enhance the hotels competitiveness and can reduce the operational risk which indicate that outsourcing has positively contributed to the financial position of the hotel.By outsourcing when an organization can get more ben efit rather than doing things by own, so it can be happen that most organizations are really dependent on outsourcing. From the hospitality industry hotels are like Holiday Inn hotel getting a big amount benefit which is helping them to operate their business very frequently with a good quality and assured them to keep the business for long time. By this kind of facility organization can achieve their goal on time.