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Managerial Systems and

Operations
1.

Learning Log

2. Inventory management system: Theories and data
flow diagram for Marston Lodge
3.

Developing ICT system for Marston Lodge

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Learning Log
nventory management system: Theories and data flow diagram fo
Developing ICT system for Marston Lodge

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CONTENTS
1.0 Learning Log
1.1 TQM and Lean.......................................................................................2
1.2 Inventory management.........................................................................2
1.3 Improvements through projects............................................................3
1.4 Operations management.......................................................................3
1.5 Supply chain..........................................................................................4
2.0 Inventory management system: Theories and diagrams for
Marston Lodge
2.1 Theoretical Support for Marston Lodge’s Inventory Management.........5
2.1.1 Linear and mixed integer optimisation...........................................5
2.1.2 Lean Management...........................................................................6
2.2 Practical Support for Inventory management........................................6
2.3 Conclusion.............................................................................................8
3.0 Developing ICT system of Marston Lodge
3.1 HOTEL

PROBLEMS IN OPERATIONS MANAGEMENT CONTEXT ..............................9

3.1.1 ROOM
3.1.2 LACK

CLEANING..................................................................................9

OF MOTIVATION............................................................................9

3.1.3 LAUNDRY

SYSTEM...............................................................................10

3.1.4 CHECK-IN CHECK-OUT........................................................................10
3.2 ICT

PROJECT TO SUPPORT OPERATIONS MANAGEMENT..................................10

3.3 ICT

PROJECT PLANNING...........................................................................11

3.3.1 SIGNIFICANCE
3.3.2 WBS
3.3 RISK

OF

OF

WORK BREAKDOWN STRUCTURE (WBS)........................11

PROPOSED ICT

PROJECT OF

MARSTON LODGE............................12

ASSESSMENT IN HOSPITALITY SECTOR.................................................13

3.3.1 SIGNIFICANCE
3.3.2 RISK

OF RISK MATRIX..............................................................13

MATRIX OF

MARSTON LODGE ICT

PROJECT......................................14

3.3.3 RECOMMENDED PROJECT TEAM............................................................16
References – Section I...............................................................................17
References – Section II..............................................................................17
References – Section III.............................................................................18

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1.0 LEARNING LOG
Throughout this log, the work experience and learning and development
activities are described by following the reflective learning model of
Driscoll (2000) which organises debate in what, so what, and now what
concepts. But the event is explained in a format of different questions to
link my personal experience with theory and development. In addition, to
link theory with practice I found an article of Myck-Wayne (2007) very
useful.

1.1 TQM AND LEAN
The most primitive approach of management is TQM (Total Quality
Management), deals with the maintenance, improvement and
development of the quality and makes some efforts by various operations
to satisfy the consumers. Lean is also an approach which in the beginning
used in manufacturing but with the passage of time it has used in various
service functions. The main aim of both TQM and lean is to supply
products when consumers want it with perfect quality and at minimum
cost. Both play a vital role in constant development and improvement of
the product (Slack et al. 2010).
During my lecture, teacher taught me the history of TQM. I learnt that the
Henry Ford and his early factories were an actual origin of TQM. The
management experts of USA picked it up but it was exported to Japan
where it developed in the Toyota Production process and after that further
reintroduced in Western countries. I am little confused about some points
of TQM’s history especially about why USA experts ignored it why it
reintroduced in West once again. I will search more detail on it and find
out the reasons and impacts to enrich my knowledge.

1.2 INVENTORY MANAGEMENT
All types of physical sources and stocks are inventories. It may include
raw materials, parts of different supplies and final products. There are five
various types of inventory like cycle, pipeline, buffer or safety, anticipation
and de-coupling inventory deals with the supply, demand and rates of a
product at various points. As inventory plays a crucial role but it might be
sometime dangerous and demand extra systems of safeguarding and
handling these dangerous situations which can be happened especially in
storing flammable chemicals, explosives and drugs. In making any

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decision about inventory some costs such as storage, holding, ordering
and set up cost should be considered (Slack et al. 2010).
During the lecture on inventory management, I learnt the technique of
managing inventory. By studying further, I came to know that the ABC
classification of different stocks is the most common and effective
technique which uses the Pareto principle. This principle makes a
distinction between the significance place and various values of different
type of stocks. Inventory can also be managed by using information
systems which purely based on computer. It has different functions such
as it generates orders and status report; updates the record and forecast
the demands. I am sure that these techniques will help me in my future
job in maintaining and managing all records of the inventory.

1.3 IMPROVEMENTS THROUGH PROJECTS
A set of all activities which have specific objectives, have a definite
starting and ending, have a complete schedule and planning of sources is
termed as a project. Some common types of projects are research
projects, management and construction projects, product and engineering
projects. There are 5 stages in managing a project: ideation, planning,
implementation, control and closure. All types of projects are actually
bound to the quality, time, safety and cost. Environment plays an
important role in the succession of a project especially the role of
stakeholders of the project (Slack et al. 2010).
During the lectures, I learnt how to plan and control a project. I came to
know that project planning and project control demands efficiency in
managing resources, risks, stakeholders, time, people and information.
Identifying individual activities, relationship of activities and schedule
hinders, fixing the schedule and estimating time are important stages of
project planning. Similarly, a project can be controlled by taking decisions
about checking the progress of orders and assessing the performance of
project by monitoring either it is according to project plan or not. I am
confident that I will be able to manage, plan and control projects
efficiently in my near future.

1.4 OPERATIONS MANAGEMENT
The operations management is concerned with organising and managing
technical and physical functions of a company especially related to
design, manufacturing, and marketing depending on the type of the
organisation. Generally, operations management is a broad concept which
takes into account several sub-topics such as cost control, planning,
material management, factory management, production control, and
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redesigning of products or services. It ensures the efficiency and
effectiveness of business operation in order to achieve quality products
and desired level of productivity. For this it converts organisational
resources (inputs) into completed goods and/or services (output) (Collier
and Evans 2011).
I have some experience of working in automotive industry. I observed that
operations management in automotive industry seeks to increase the
performance of manufacturing abilities of an organisation using various
process improvement and quality management techniques. These
techniques are lean manufacturing, total quality management, and just-intime. In addition, some other continuous improvement techniques are
supply chain management and Six Sigma. All these methods need a
horizontal organisational structure integrated with all the functions of the
organisation (Gupta and Boyd 2008). The systems in operations
management in automotive industry at organisational level effectively
allocate and control organisational resources and workforce for each
project. This practice makes manufacturing of vehicles more responsive
and flexible in meeting the demands of the customers.

1.5 SUPPLY CHAIN
Supply chain management is extremely relevant and important activity
which is used to manage human as well as material resources manually or
through the software (Slack et al. 2010). I have been engaged in the
supply chain department in one of the organisations in Saudi Arabia. Our
clients were continuously complaining about the slow and late delivery
times and due to this problem we were losing our customers. In fact, the
transport system and other systems were working fine and up-to-date but
there was a need to identify the bug in the system. And this was due to
lack of training of internal personnel and lack of up-to-date ERP system as
well. I leaned that it is inherent not to ignore internal employee’s training
by the means of logistics and supply chain management. I found that if
everyone in the supply chain team is aware of his/her duties and trained
on the job roles within the overall process, then the whole system works
well and smooth and gives a positive outcome. I arranged some quick onjob training sessions and workshop to achieve improvement in logistic
operations, transportation, relevance, and employee motivation and
retention. I adopted twofold strategy. First I called some recently retired
employees of the company for giving training and secondly some experts
of supply chain management were appointed to train existing employees.
The strategy of calling experts was to deliver theoretical as well as
practical knowledge to the employees and management. Also, the
strategy of calling former employees of my company worked very well
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because they were well aware of the entire system and therefore they
gave some useful tips to the current employees.

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2.0 INVENTORY MANAGEMENT SYSTEM:
THEORIES AND DATA FLOW DIAGRAM FOR
MARSTON LODGE
Located by the side of hillside at North Hill, Minehead Marston Lodge is
one of the exquisite motels which provide an overview of Exmoor. It offers
guests with spacious and refurbished rooms. Encompassed with natural
beauty it provides people with all kinds of facilities. From a financial
management perspective Marston Lodge holds a strong position with well
established organisational structure. However the owner still demands an
increase in profit margin. This issue needs to be addressed and can be
achieved through proper inventory control management. There are
numerous theoretical and practical backgrounds which can resolve this
issue including data flow diagrams and context diagrams (Stevenson, 2007).
There are also tools and techniques supporting inventory and supply chain
management systems including dynamic simulations, linear and mixed
integer optimisation, inventory analytic methods and simulation
techniques (Zipkin, 2000). The present report discusses the theoretical and
practical backgrounds which can be implemented for Marston Lodge.

2.1 THEORETICAL SUPPORT FOR MARSTON LODGE’S INVENTORY
MANAGEMENT
During the period of 2011 the hotel industry faced pressure from
economic decline and turndown (Shaw, 2011). This reduced people from
travelling and retreats of visiting various places. The prediction of hotel
industry from the eyes of financial analysts observed over 50% increment
in occupancy rates and decline in operating performance. The inventory
management for hotels include the control over goods, capacity
management, procurement management, distribution and logistics
management and period of stay controls of goods. These are most
influential methodologies for inventory and revenue management.

2.1.1 LINEAR

AND MIXED INTEGER OPTIMISATION

The mixed integer optimisation is powerful mathematical tool for
minimising the labour force. It can be used by the management of
Marston Lodge for reducing the risks involved in labour management. The
sub-optimisation problems in which number of labours is specified can be
taken as a decision variable. The total cost involved in transportation from
warehouse to the Lodge can be minimised through using this theory can
save labour cost for the Lodge increasing the chance of raising profits. The
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design logic of inventory control includes the optimisation techniques
which help to assess the design substitutes (Yau, 1994). These substitutes
include the mixture and grouping of warehouses, suppliers and product
storing and stocking strategies. These optimisation models and
techniques can be adopted by Marston Lodge for knowing collective
customer demand, product and data flows, supply availability, logistics
alternatives, warehouse handling and employee management. Through
aggregation the management of Marston Lodge can solve the issue
problem of vertical integration as the optimisation techniques can help to
estimate network combinations while bearing in mind the relevant
constraints of logistics. These also include market demand and production
of plants. Furthermore the management board needs to develop a
comprehensive design comprising of design options and functional
relationships. The functional relationship should include the combinations
of production sites and distribution sites. The assumptions can be
simplified for business practice including the analysis of product flows
from warehouses to the markets. However, size limitation can be a
disadvantage for a complete supply chain analysis (Krajewski, 1999).

2.1.2 LEAN MANAGEMENT
Hotel industry focuses upon lean management for controlling and
increasing organisation’s internal efficacy. It lends a hand for customers
for getting better systems through focusing upon the savings during the
cycle of cost reduction and production (Arnheiter, 2005). Marston Lodge can
make use of lean management in which distributors can be permitted for
increasing product availability for increasing net profits. The management
can also use the facility for decreasing constraints upon goods. Marston
Lodges can utilise lean through inbound trailer cycle and space utilisation
for strengthening supply chain and inventory processes. Lean can also
perk up the cycle time by decreasing the operational costs. The present
time depicts the gaining of shorter product life cycles due to altering
demands of the customers. Hence a just in time strategy should be
applied for the operations carried out by Marston Lodges’ management.
This can add up the profit levels by abridging, optimising and reorganising
operations. The supply chain management and logistics, reduction of
wastes can also be well organised for gaining the competitive advantage
and improving the outbound and inbound flows (Bicheno, 2008).

2.2 PRACTICAL SUPPORT FOR INVENTORY MANAGEMENT
The practical support for inventory management involves the usability of
data flow diagrams and context diagrams (Hartmann, 2008). They are the
graphical representations of an information system which are clearly
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detailed while defining the processes. They give a visual support to
interpret the complex management systems. The kind of data including
the input and output from the system are illustrated as to understand the
time taken for processes and the sequence to be followed for carrying out
a task. The context data flow diagrams show the relations among the
entities and system while carrying out a specified task. It is takes account
of the whole system which is represented as a single entity (Campos,
2004). It has different levels however the report focuses upon level 0
which Marston Lodge can adopt for its inventory management system.
Order system
 

status of
unavailable goods

Order of sales

Returned
goods

The inventory management system illustrated is well organised and can
be properly implemented by the management with respect to the present
scenario where there is no adequate means of managing labour,
transportation of goods, keeping an eye on stock levels and accounting
system. Hence there is no cooperation among the departments of the
Lodge and can be developed through the implementation of the above
mentioned system. Marston Lodges has a well established managerial
structure with James Thoma as the operational manager who is the main
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entity in the inventory system. He can retrieved feedback from the system
and then provide his opinions along with the current status of inventory
and cost details. This can help him for maintaining the entire stock.
Additionally Kathryn Hughes is the top chef who manages the inventory of
meat and vegetables locally as people prefer organic diet. The farms
located in Wales can be the main entity for transporting the goods while
handing over a distribution or shipping slip. Hence the complicated task
can be made easier for Kathryn. The tasks for running accounting system
by Jamie Taylor can also be made straightforward through only checking
the invoice and feedback from the system. People responsible for logistics
can also get help through the system by merchants who get purchase
orders. Hence the goods can easily be transported to the location.
Consequently the complex and sophisticated system of inventory control
can be simplified by implementing data flow diagrams.

2.3 CONCLUSION
No doubt Marston Lodges have the best services offered for its customers
but they can be optimised through the utilisation of theoretical and
practical support for inventory management. Theoretical supports a
number of management skills including procurement management,
distribution management, logistics management and green supply chain
management for inventory control. However lean management and Linear
and mixed integer optimization can serve best for the organisational
development through its straightforward techniques. Practically the
organisational behaviour can be enhanced through following a proper
“system” for avoiding confrontations among the departments. The
diagram discussed in the report clearly depicts the flow which can be
adopted by the management of Marston Lodges.

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3.0 DEVELOPING ICT SYSTEM

OF

MARSTON
LODGE

3.1 HOTEL PROBLEMS IN OPERATIONS MANAGEMENT
CONTEXT
Operations management in relation to hospitality industry indicates dayto-day activities that hotel management needs to perform in order to keep
the system running smoothly (Jones, 2008). Marston Lodge case study
indicates certain housekeeping and onsite problems that hotel faces.
These problems are discussed in this section with reference to operations
management.

3.1.1 ROOM

CLEANING

Referring to the case study of Marston Lodge, the hotel rooms are failed to
pass hygienic needs of the customers, and lack of cleanliness standards in
the lodge are causing the hotel bookings down. Raghubalan (2009)
asserts that cleanliness in hotels and motels is one of the vital criteria of
selection from the point of view guests. Furthermore, it is the
responsibility of the hoteliers to make available safe and sound
environment to the guests. However, in the present situation, the
housekeeping arrangements in most of the hotels worldwide are not
standardised and this is similar in the case of Marston Lodge. Falbo (1999)
mentioned that cleanliness of rooms and other surroundings is the
fundamental factor which motivates or de-motivates guests to revisit
hotel. Therefore, it contributes significantly to the hotel revenue and
reservations.
The foremost cleanliness issues are evident due to internal factors. Some
of the factors include lack of training to cleanliness staff, lack of
cleanliness knowledge and skills, less time given for cleaning, and
inappropriate controlling and monitoring (Kappa, 2008). In the Marston
Lodge, it is also evident from the staff comments that they are not given
proper time to clean each room and sent to another room before the
allocated time.
Jones (2008) emphasised on communicating with cleanliness staff during
supervision and inspection of cleaned rooms. Following the
communication theory, the importance of communication is a social
activity in organisational context (Anserson, 1996). In addition, the time
management is very important aspect to tackle housekeeping issues
(Raghubalan, 2009). Thus, the supervision staff especially Jim Talbot (the
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head of cleaners) in Marston Lodge needs to check room attendance
regularly for the delivery of high quality service standards. During the
supervision he needs to communicate with the cleaning staff to give them
confidence and motivation. The major issue of time management also
needs to be addressed.

3.1.2 LACK

OF MOTIVATION

The discouraging comments from cleaners, laundry staff, receptionist, and
even hotel manager in the case study indicate the lack of motivation
which causes conflict between the departments. Further the lack of onsite
activities also tends to de-motivate staff in providing better services to
guests. According to the ‘Hawthorne Effect’ theory of motivation,
surveying staff at regular basis is normally a useful practice to scrutinise
whether the staff is motivated and thus performing to best effect (Lewis et
al. 2006). Apart from the data obtained through questionnaires, the
procedure also involves discussing problems with staff and taking
corrective actions to resolve their problems. Consequently, they will be
encouraged to be accountable for a burden and be professional
housekeepers. Lewis et al. (2006) also emphasised the adoption of the
approach of motivation by providing training to staff which consequently
helps to improve their working abilities and impressing guests with good
experience.

3.1.3 LAUNDRY

SYSTEM

Checking laundry quality and maintaining its availability at all times is a
major issue in most of the hotel, and Marston Lodge is not an exception. It
is not possible for the staff to check every item and as a result the quality
and delivery are affected to great extent especially if something is missing
or damaged when required urgently (Jones, 2008). Damages or missing
items problem most probably occurs when transporting or shifting items
from one place to another and this situation is often out of control of the
hotel. Jones (2008) stresses the importance of placing an effective ICT
(Information and Communication Technology) system as a solution of this
problem which can save enormous costs and prevent from damages.
Further, it also enhances revenue of the hotels by tracing and fixing the
root problems at permanent bases.

3.1.4 CHECK-IN CHECK-OUT
Nankervis (1993) asserts that hotel productivity largely based on the
check-in and check-out efficiency especially in terms of luggage handling
and speed. This is the factor which distinguishes a hotel with its
competitors and thus it is important to monitor and measure its
effectiveness at regular basis. In the Marston Lodge case, it is identified
that the check-in and check-out services are inadequate and customer
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complaints are rising in this regard. The implementation of an ICT system
can also address check-in and check-out problems by keeping records of
guests’ check-in and check-out times more effectively.

3.2 ICT PROJECT TO SUPPORT OPERATIONS MANAGEMENT
The ICT in hotel context has already influenced the hotel environment in
several ways. Many hotels employ ICT system to support routine hotel
operations such as booking, laundry, maintaining records, check-in and
check-out systems, security, and communication with internal and
external stakeholders. Over the years, ICT system has been changed
greatly due to advancements in technology and telecommunication
systems (Kamaruddin and Ahmad, 2012). Several hotels spend enormous
amount of money in acquiring such facilities in order to remain popular
among existing and potential customers.
Several experts believe that ICT in hospitality sector has resulted in
several benefits. The greater advantage is the long-term profitability as a
result of minimised costs of daily routine operations (Cobanoglu et al.
2001). Another leading advantage is the establishment of long-term
relationships with guests due to constantly staying in touch guests. For
example, guests are served on the basis of their personal preferences for
room and other facilities. Apart from the basic services, ICT helps the
management to minimise costs, enhance service excellence, increase
efficiency, and achieve greater guest satisfaction (Siguaw et al. 2000).
Given the advantages that ICT provides to the hospitality sector, the
broad utilisation of technology will be an anticipated solution.
Today, several hotels in the hospitality sector have increasingly invested
in ICT in order to increase the efficiency and effectiveness of their
operations and procedures. In addition, it has also greatly supported
management to increase the productivity of the hotel due to sound
decision making. The hospitality sector greatly relies on ICT to enhance
the output and competence of employees which reflects customer
satisfaction. So, it can be said that ICT has also contributed in the success
of hotels in terms of competition based on customer satisfaction (Ham et
al. 2005). Thus, there is a positive relationship between hotel’s
performance and ICT investment. However, some certain internal and
external risks factors are also associated with ICT project which influenced
the output. These risks are discussed and critically evaluated through risk
register and risk matrix in the later sections in this report.

3.3 ICT PROJECT PLANNING
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The project planning is the key step of project management in initiating
any project (Project Management Institute, 2013). Many project
management tools exist which help the project manager to schedule
project activities in which Work Breakdown Structure (WBS) and Gantt
chart are popular and used by most of the organisations.

3.3.1 SIGNIFICANCE

OF

WORK BREAKDOWN STRUCTURE (WBS)

The project activities largely classified on the basis of project size, cost,
and time frame. On the accomplishment of the project, it must satisfy the
needs of the stakeholders. A WBS enables the project manager to
schedule project activities in efficient and effective manners. Further, it
illustrates the association and dependence of each task with/on another,
from the start to end of the project. WBS also facilitates the management
to consistently follow the schedule and provide guidelines for effective
project execution.
WBS can be beneficial for underpinning project success in a variety of
ways. These ways can be describe in terms of schedule, tasks, costs,
scope and function (Taylor, 2007). Planning and scheduling is the major
benefit and core purpose of WBS for tracing the project overall progress.
The construction of WBS at early stages enables the project manager to
clearly define the limits and determining how often tasks can be
accomplished. The key aim of WBS is to minimise complex tasks and for
this it is imperative for the project manager to supervise project activities
in more effective manners. With reference to an ICT project, WBS provides
a sovereign and quantifiable way of completing the tasks (Selig, 2008).
All the project tasks are measurable and thus each task can be assigned a
cost which enables the project manager to divide the entire allocated
budget into small parts and link them with the tasks. In this way, the
project manager can have effective control over budget and overall cost
of the project is not expected to exceed. One of the important roles of a
project manager is to define the overall project scope by ensuring
unnecessary additional works. WBS in this regard helps the manager to
list down individual tasks and subtasks to create a defined list of
objectives for the project team. The team then has aim to complete the
tasks one by one in a defined time limit (Taylor, 2007). This also shows the
allocation of responsibility of work to team members where project
manager can assign activities and budget to the team.
With reference to an ICT project in hospitality sector, the target is to
improve the overall functionality of the hotel operations. By dividing the
entire project into smaller parts allows a partial fulfillment of full project by
individually completing subtasks. After successfully completing these
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subtasks, all partial functions can be combined to get a fully functional
project reflecting the needs of the stakeholders (Selig, 2008).

3.3.2 WBS

OF

PROPOSED ICT

PROJECT OF

MARSTON LODGE

A typical ICT project may consist of five major tasks including: problem
definition, feasibility study, analysis, design, and implementation (Dennis
et al. 2008). Based on these steps a WBS is developed for a proposed ICT
project of Marston Lodge.
ID
A.
A1
A1.
1
A1.
2
A1.
3
A2
A2.
1
A2.
2
A2.
3
A2.
4
A2.
5
A3
A3.
1
A3.
2
A3.
3
A3.
4
A3.
5

Task Subtasks

Case study application

ICT PROJECT MARSTON LODGE
Problem definition
Problem identification

Poorly cleaned rooms, long queues at check in
and checkout, lack of onsite tasks

Statement of work

Addressing problems

Project scheduling

Planning through WBS

Feasibility study
Project resources

Computer hardware, operating system,
security system, software for managing
operations

Define standards
Project budget
Research networking
equipment

Wireless, broadband, DSL

Stakeholder requirements

Approval from stakeholders

Analysis
Identify risks

Risk register and risk matrix

Technical & test procedures

Configuration test plan

Requirements analysis

Information technology needs;
Telecommunication needs; networking needs

Analyse training needs

Staff training & development

Analyse platform options

Workstations and servers

A3.
6

Validating requirements

Communication, upholding records,
reservation system, billing system,
improvement of laundry system & check-in
and check-out system

A4
A4.

Design
System prototype

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1
A4.
2
A4.
3
A4.
4
A4.
5
A4.
6
A5
A5.
1
A5.
2
A5.
3
A5.
4
A6
A6.
1
A6.
2
A6.
3

Addition staff hire

ICT staff acquisition

Assign tasks

Relevant project stakeholders

Design systems

Reservation system, billing system, laundry
system & check-in and check-out systems

Develop ICT infrastructure

Software & licences

Network specifications

LAN, WAN, interconnection, wireless

Implementation
Implement the system

Reservation system, billing system, laundry
system & check-in and check-out systems

Upgrade ICT infrastructure

Upgrade software versions and licences

Upgrade networks

LAN, WAN, interconnection, wireless

Initial technical document
Review
Technical report

Output of development

Test verification report

Checking the system by carefully testing by
matching it with requirements analysis

User maintenance manual
Table 1: Work Breakdown Structure of ICT Project

3.3 RISK ASSESSMENT IN HOSPITALITY SECTOR
Risks are probable in all types of businesses including the hotel business.
To effectively deal with risks and to develop an effective control over
project activities, it is inherent to develop an understanding of all internal
and external risks associated with the project. In relation to the hospitality
sector, risks can be classified into four major groups such as strategic
risks, commercial and financial risks, external risks, and operational risks
(Bharwani and Mathews, 2012).

3.3.1 SIGNIFICANCE

OF RISK MATRIX

A risk matrix (or probability impact matrix) is normally utilised during the
assessment and evaluation of probable risks associated with a particular
project (Bharwani and Mathews, 2012). The key aim of a risk matrix is to
assist analyst in ranking the risks according to their likelihood and
consequences for the purpose of developing a risk response plan as a part
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of risk treatment strategy. Risk matrix is constructed on the basis of risk
register where weights are assigned to different risks.
One of the prominent benefits of using risk matrix is to identify risks with
more severity and therefore, need to be addressed at urgent basis by
adopting a cost-effective way of mitigation. Like other organisations,
traditional budget hotels such as Marston Lodge are also concerned with
completing projects within a limited budget and resources and in this
regard, the risk matrix helps them to manage risks effectively.
The likelihood and impact of risks can be measured from high to low scale,
but it must be kept in mind that risks with low likelihood cannot be
reliable. Therefore, companies need to calculate risk levels based on each
project stage or event rather than the entire project (Project Management
Institute, 2013). Cox (2008) argues that there is no doubt that it is useful
for identifying and assigning weights to each risk, but on the other hand if
the weights are assigned wrongly to each factor then project can be at
major risk of delay or even suspension. The author also identified that a
risk matrix can be exposed to ambiguous inputs and outputs. This means
that inputs such as frequency and impact classification and outputs such
as risk ranking need subjective interpretation.

3.3.2 RISK

MATRIX OF

MARSTON LODGE ICT

PROJECT

Risks linked with an ICT project are the inherent part of hotel risk
management strategy as they are subject to various internal and external
threats. A range of possible risks include: high cost, security threat,
outsourcing, disaster recover, technical risks, third party contracts,
defects and update risks, data backup risk software licence compliance
etc. (Hanseth and Ciborra, 2007; Thiadens, 2008; Pather et al. 2011).
However, the most prominent ICT risk area is to determine how newly
implemented ICT system will function and fulfill the needs of the
stakeholders. Therefore, implementing or upgrading an ICT system can
have a game-changing impact on the entire hotel and its potential impact
can greatly affect its business. Most of times, the changes are positive but
above stated risks can greatly affect the scope of the project. So, a careful
planning is required or otherwise new ICT system can have several
negative effects on guest, employees, and management.
The risks identified above are categorised and described in detail in the
risk register in table 1.

ect ICT manager
el business

KiriBawe
Zaynor Polowski

ager
Page | 17

k

Risk
category

Likeliho
od

Impa
ct

Se
t
(H

Viability of e proposed business model,
delays, stakeholder permissions, time or
cost overruns
Highly competitive environment in
hospitality industry
Cost of financing, interest, system building
cost etc.

0.8

0.8

Hig

0.8

0.6

Hig

0.8

0.8

Hig

Software
licencing

Vendor risk and high costs of acquiring
licences

0.6

0.2

Low

Compliance

Legal actions or penalties in case of noncompliance with governments
environmental and protection laws in
hospitality sector
Theft, misappropriation of ICT system, credit
card frauds
Risk of huge loss and damage if entire
system will not function or fail to meet
expectations
Technical faults in ICT system

0.2

0.6

Me
m

0.4

0.6

Hig

0.6

0.8

Hig

0.6

0.4

Update of ICT requires to avoid
inconsistencies
Frequent data backup requires to avoid loss
of data
Operating cost includes licencing fee, third
party contracts, hiring additional staff, or
outsourcing etc.
Password loss & cracking and other security
threats
Hacking and other soft and hard attacks

0.4

0.2

Me
m
Low

0.2

0.2

Low

0.6

0.6

Hig

0.2

0.6

0.2

0.8

Me
m
Hig

Third party agreements to acquire
equipment and services related with
telecommunication, networking and security
systems

0.4

0.4

Risk title

1

Strategic
risks

Project viability

2

Strategic
risks
Commercial
& Finance
risks
Commercial
& Finance
risk
Commercial
& Finance
risks

Competition

Operating
risks
Operating
risks

Fraud & integrity

Operating
risks
Operating
risks
Operating
risks
Operating
risks

Technical risk

1

External risks

Security threat

1

External risks

1

External risks

Terrorist
activities
Third party
contracts

3

4

5

6

7

8

9

1

1

High cost

System failure
risk

Update risk
Data backup risk
Operating cost

Risk description

Table 1: risk register for an ICT project at Marston Lodge

Page | 18

Me
m

Based on the risk register in table 1, the risk matrix for a proposed ICT
project of Marston Lodge is developed in table 2 by putting each risk into
relevant box according to the its likelihood and impact on ICT project. As
shown in table 2 that risk number 1, 2, 3, 6, 7, 11 and 13 have high
impacts on project and therefore require for achieving success.
Likelihood
0.8

Risk2

0.6
0.4
0.2

Risk4
Risk9
Risk10

Risk8
Risk14

0.1

0.2

0.4
I m p a c t

Severity
scale

Low

Medium

Risk11
Risk6
Risk5,
Risk12
0.6

Risk1,
Risk3
Risk7
Risk13
0.8

High

Table 2: Risk matrix Marston Lodge ICT Project

3.3.3 RECOMMENDED PROJECT TEAM
As per salient requirement, it is necessary to recommend a project team
for this project. In this regard, table 3 recommends the proposed team for
this project.
Team member
Existing
The hotel manager
ICT manager
Hotel business
manager
Contract manager
Facilities
management head
Head of hotel
security
Hotel maintenance
manager
New hire
Project manager

Purpose
For monitoring and controlling entire project
generally
For monitoring and controlling entire project
specifically
For arranging funding and other financial
matters
For internal and external contracts with parties
To ensure that new system meet the
requirements related to facilities management
To ensure that new project fulfill all security
measures
For system maintenance

To manage and organise whole project
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ICT support worker 1
ICT support worker 2
ICT support worker 3

To help in developing and maintaining new
system
To help in developing and maintaining new
system
To help in developing and maintaining new
system

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