HIDDEN COSTS OF SOFTWARE

SHOULD YOU LOOK AT MOVING AWAY FROM ON-PREMISES HOTEL SOFTWARE?

Cloud computing is reshaping industries worldwide, and the hospitality industry is no exception. The COVID-19 pandemic has laid bare the need for low-touch solutions in a high-touch industry.

Generally speaking, legacy on-premises enterprise systems lack the flexibility to adapt the rapid business change. Software that was designed and installed years ago could not have anticipated the challenges facing the hospitality industry as it accommodates travellers in the post-COVID era. Trying to retrofit those systems to meet current needs requires time and capital that hoteliers cannot spare. Here are four hidden costs that make it clear why the cloud is a better choice than on-premises software for hospitality enterprises.

1. Hardware and infrastructure. In a hotel server room, hardware, air conditioning, electricity, and the physical space aren’t exactly hidden costs. But you may underestimate the amount they add to the totalcost-of-ownership (TCO) equation. In addition, the storage demands of many on-premises software packages can result in unexpected disk space shortages that have to be resolved—fast. The resources, time, and trouble required to keep a server room afloat, can be an unwelcomed distraction during a time of dramatic business change.

2. Software. Once hotel software licenses have been purchased, there are often costs related to IT support, mobile device support, and add-on software that need to be factored in. In addition, emergency fixes from the software vendor can result in increased IT labour costs. Even operating system and anti-virus software costs need to be added to the equation. Add to that customer demand for new features and functionality and you have a recipe for hidden cost.

3. Security & Backups. If you’re managing your own system backups, the cost of off-site storage and costs associated with the staff needed to manage and troubleshoot backups are all part of the on-premises package. That backup becomes ever more critical as you roll out new features that may require you to expose valuable legacy data to new systems.

4. Integrations, upgrades and patches. If your software is on-premises, then it’s the responsibility of your IT team—or your pricey thirdparty vendor—to keep it up to date. Third-party integrations can cause changes to the server parameter that result in major downtime and work disruptions. Those can be expensive—and in many cases these mundane tasks can distract your IT team from focusing on projects that create more value for your organization.

Future-proofing your digital infrastructure

But these hidden costs can be avoided. Access to the virtual capabilities of the cloud has leveled the playing field for major international chains, regional chains, local hotel groups and small boutique hotels alike. Hospitality CIOs and IT teams are looking to cloud computing to support new hybrid workforce models and take advantage of the flexibility, security, and affordability that the cloud provides.

There are other costs that go away with the cloud. For example, the cost of purchasing software that never ends up being used— ‘shelfware’—is a nonissue with the cloud.

Increased operational costs, including additional guest-facing staff when system downtime occurs, should be calculated into the TCO. In the end, understanding the true cost of onpremises software—and the ways cloud computing can eliminate these costs—can help ensure that you’re setting up your digital infrastructure for future success.

Built on the security and performance of Oracle Cloud Infrastructure, the OPERA Cloud Platform is a cloud-based, mobileenabled property management system for hotels of all size and service level, providing the industry’s richest level of functionality and integration capabilities.

Oracle Hospitality is working harder than ever to provide users with technology – anchored by its cloud-based suite of solutions (OPERA Cloud) including property management and sales & events management, distribution, point of sale (Simphony), and Oracle Nor1 upsell solutions – that provide the agility needed to navigate the future in Hospitality.

To discuss how Oracle Hospitality can future proof your digital infrastructure contact: Rosemary McArdle, Sales Director, Oracle Hospitality rosemary.mcardle@oracle.com Mobile: +353 87 829 4696

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