STUDY OF INFORMATION SYSTEMS

OF

AIRBNB AND TAJ GROUP OF HOTELS

1.INTRODUCTION

An organization can be described as a group of people working towards set goals. These people
in an organization are engaged in interactions with each other internally as well as external
interaction with people outside the company. There also comes a need of storing and handling
knowledge gained through these interactions. With the growth of IT, i.e., computers, software,
networks etc. it was only natural that organizations use it to help then in various processes. This
integration of technology and people in order to create, store, modify and distribute data or
information in an organization is what we can term as an information system.

Organizations face a lot of competition in the market due to various factors such as the threat of
substitutes, bargaining power of customers and suppliers, new market entrants as well as the
traditional competitors. By aligning IT with business an organization can try to achieve low cost
leadership, product differentiation, good customer supplier relationship, and create barriers to
hold onto customers as the focus on their market niche. All these can be achieved through the
implementation of information systems and thus add value to the final product or service being
provided by the organization. Michael E. Porter proposed a value chain model, which gives the
series of activities that add value to a final product. We can also broadly map three main types of
information systems used in organizations to the value chain model as shown in the figure.

Inbound Outbound Sales &

Production Maintenance
logistics logistics Marketing

Supply Chain Enterprise Customer

Management Resource Relationship
System Planning Management
System System
The first step in the value chain, inbound logistics, refers to the management of resources
entering the organization from outside (raw materials, working capital). Production is the process
of converting the inputs into the desired product or service. Outbound logistics deals with
movement of products or services from the organization to the end users or customers including
activities from sales order to billing. The next step of sales and marketing is crucial of crating
awareness and convincing potential customers about their product or service. Lastly,
maintenance deals with activities done after the sale of product or service aiming at good
customer satisfaction[ CITATION Bai16 \l 1033 ].

In this report, two companies – Airbnb and Taj Group of Hotels are considered. While both
provide similar service, which is temporary accommodation to their customers, their business
models are quite different. This brings about certain contrasting features in the information
systems as well as similarities which are explored and elaborated to provide insight into the
working of these two well established organizations.

2. AIRBNB

Source-https://bmtoolbox.net/stories/airbnb/
Airbnb is a community-based online platform used for listing and renting local homes. It
connects the hosts with the traveler and assists the process of renting without owning any rooms
itself. On one side, it allows the owners to list their space and earn income from rentals. On the
other hand, it will enable travelers to access to renting private homes. Private customers can
share access to products or services with other customers through a platform that serves as an
intermediary.

For cloud storage, Airbnb uses Amazon S3, EBS. Amazon Services is considered the best for
storing user data, including millions of pictures.

The cloud database uses Amazon RDS; this web service is an apt solution for handling common
database and administration tasks such as filling up customer profiles and rooms.

For cloud hosting, they use Amazon EC2. It's an efficient tool that ensures good fault tolerance
during sudden traffic spikes or fluctuations in traffic.

Airbnb also uses multiple tools for storing, managing information, and analyzing data.

A. Cloud Communication Software (TWILIO):

Airbnb chose Twilio to automate mobile communication between rental hosts and potential
guests using text messaging. If a host has not responded to a request, they receive an automated
SMS message from Airbnb with information on the guests, the dates of the requested stay, and
the price for the stay. They can then quickly respond with a text.

Software teams use Twilio APIs to add capabilities like voice, video, and messaging to their
applications. This enables Airbnb to provide the right communications experience for their
customers. Behind Twilio APIs is a Super Network, a software layer that connects and optimizes
communications networks around the world. This is what allows Airbnb users to reliably call and
message the host and customer care from anywhere.

Under the Model of Enterprise resource management and Customer Relationship management
the following process is used:
(a). The customer enters his message/ query in the app or website which is then transferred to the
Twilio proxy.

(b). Proxy’s API automates phone number allocation, recycling phone numbers to power
multiple concurrent conversations. Proxy can power thousands of conversations from just one
phone number while preserving distinct conversation threads 

(c)In case of a new message a new thread is created whereas in the case of an existing message,
the existing thread is used.

(d) Next the Twilio router evaluates the task attributes against its routing configuration and
prioritizes the task into the right queue with the right ordering.

(e) After this, the task/ query is evaluated for available workers against its target workers
expression and reserves an eligible worker or Airbnb host.

(f). Ultimately, the message will reach its destination and the receiver will reply. [ CITATION TWI \l
1033 ]

[ CITATION Twi \l 1033 ]

 B. Customer meets supplier (Twilio): 

(a). The traveler is going to connect with the database through Route 53 which is a domain name
system.
(b). Then he is going to connect with the cloud front which is a CDN content delivery system.
CDN basically helps to keep the static content close to the traveler so that the performance of the
application is improved

(c) The Consumer traffic is then balanced through a load balancer which in this case is AWS
EC2. The traffic is divided into payment, view, guest and search service.

(d). The traveler will be using different services at different times of decision-making process.

(e). On the other hand, the host is going to create the rental object details. The host service is
going to persist the rental object details in the database and it will upload the photos to the AWS
S3 buckets.

(f). The rental object details are then uploaded to the AWS Q so that it will be available to other
part of the system.

(g). Ultimately, the data is processed and stored in the ELASTIC-SEARCH database. elastic
search is a highly scalable open source full-text database engine. It makes it easy to store high
volumes of data.[ CITATION Int16 \l 1033 ]

C. Enterprise Resource Planning using Epicor iScala

The Enterprise Resource Planning (ERP) solutions such as Epicor iScala for hospitality have
helped Airbnb all along the way. Epicor helps by making financial management smarter and
bringing real-time insights to decision-makers, regardless of tax rules, currency, location, or
language. It helps businesses free up internal resources by consolidating company accounts and
databases into a single system providing monetary management, fully automated reporting,
tracking daily revenues, and aligning different functions. This ERP system allows businesses to
meet customer expectations. It helps businesses to capitalize on economies of scale and deliver
services based on smarter decisions.
 D. Airbnb’s CRM using Hootsuite

Customer Relationship Management is essential for a business as it connects and builds a

relationship with customers. Companies have to make sure that they have to acquire CRM tools
to serve customers better. Airbnb provides a platform for travelers and hosts, to interact and does
not require any paperwork. Airbnb is a complete CRM because it allows travelers and the host to
manage all aspects of the relationship. Hootsuite is a social media management platform that acts
as a social media manager. Airbnb uses Hootsuite to connect with customers on a real-time basis.
Hootsuite is used by Airbnb to manage thousands of conversations with customers around the
globe. Hootsuite's analytical tools monitor Airbnb's social CRM and the growth of followers.
The system helps to track specific keywords so Airbnb can strategize social campaigns
accordingly. Airbnb uses Hootsuite to educate and spread information about what they offer and
how they are different from others. Hootsuite allows Airbnb to communicate with global
networks, generate relationships, and strengthen the community. Anyone who joins Airbnb on
Twitter or Facebook and starts a conversation on these social media platforms, Hootsuite assists
Airbnb to be a part of it. By taking an individual approach and engaging with clients on Twitter
and Facebook, Airbnb was able to create a rabidly loyal community. Their customer service
team, sales team and operations team are all completely socially integrated.

3. TAJ GROUP OF HOTELS

3.1 Property Management System (PMS) (Software: Fidelio):

The software helps with reservation management and administrative tasks. This modern PMS is
like a single command center for managing all essential central functions from sending booking
confirmation to issuing key carts and reporting on basic KPIs. The software includes many
functional modules which is a combination of commercial and custom tools. The integrated
modules are Customer Relationship Management, Reservations, Front office (Front Desk),
Rooms management, Conference & Catering Management, Night Audit. (CRM)

Under the module of Customer Relationship Management, the details of customers (full name,
date and place of birth, sex, language, nationality) are entered. In addition to that, peculiar
information is added and tracked to enhance the customer satisfaction. That information
includes,

 Preferred room or rooms features (smoking or nonsmoking rooms, shower or bath., etc.)
 Family members with their master data.
 Data about every customer to follow the historical backdrop of remaining in the inn (time
of remain, number of rooms in which he was put per each stay, the expense of
administrations applied., and so forth.)
 The process of reservation is fully automated and the date of arrival is used for easy
check-in experience by providing transport facilities for customers if they require so or
being new to the place.
 Through the data collected before check-in, customers are treated with preferred welcome
style which resembles the heritage of the city/state. This surpasses the experience of
customers entering Taj.
 With PMS, the welcome messages are printed based on the customer’s interests and
relevance.
 Reporting is done on daily basis with information being gathered from user preferences
and bookings.

3.2 Point of Sale (POS) (Software: ShawMan):

Point of Sale is any place where the transaction of business happens. At Taj, the POS happens to
be via many sources including online and offline. Taj uses ShawMan software to manage the
POS. It generated bills for restaurants and minibars. This system is integrated with Fidelio.
Usually the Property Management System is linked with Point of Sale to drive optimal business
decisions and leverage customer experience by learning deep about customer behavior. (ERP)

3.3 Accounting systems (Software: Orion):

The Orion system maintains the accounting module of Taj. It has Collection dashboard to send
Statement of Accounts electronically to multiple contacts simultaneously, Payment screen with
discount payments and floating credit, Interest charges, Closing process per day, Multi-branch
reception, cheques, Multi-currency, Accounts Payable Aging. It also generates reports like Trial
Balance, Balance Sheet, Income Statement, Departmental Expenses. Adding to that it analyzes
Management accounting Vs Statutory accounting by market, division, branch and department.
Financial statement analysis and complete budget analysis are taken care by Orion. All this
information is shared to the Head Office at Mumbai through Central Server. (ERP)
3.4 Customer Feedback System:

At the time of guest check-out, Fidelio generates the Customer Feedback Form via
Customer Feedback System which along with guests’ feedback goes to the Central Server. The
Central server in return helps management to form two reports (Balance score card (BSC) and
Daily Business report (DBR)).

3.5 BSC and DBR:

BSC cross verifies both financial and non-financial objectives of the business. It ensures
the current position of business towards the objective and provides a change in strategy if
required. It points out the different possible business decisions to balance the venture in all ways
of financial and non-financial sectors. This also avoids creating costly projects that have no
impact to the strategy. The data for BSC is provided through central server which contains all
information about Financial, Customer, Internal Processes and Organizational Capacity. The
DBR focuses on daily, monthly and yearly targets of different department from revenue point of
view.

4. COMPARISION OF IS IMPLEMENTATION IN AIRBNB AND TAJ

As seen above, both organizations are using technology in almost all their processes
along the value chain thus resulting in the implementation of information systems under the three
main types, Supply Chain Management System (SCMS), Enterprise Resource Planning System
(ERP), and Customer Relationship Management System (CRM). Along these lines we can
compare and contrast IS implementation and functioning along the value chain for both these
organizations.

4.1 INBOUND LOGISTICS

At Taj there is slightly more complexity as compared to Airbnb, in the inbound logistics
which mainly deals with contracts with suppliers who provide food, beverage, supplies for
laundry and housekeeping and other services. Thus information system is implemented for back
of the house storage management, inventory control and stock requisitions [ CITATION Ess18 \l
1033 ].

On the other hand, Airbnb inbound logistics take a whole new dimension because it is a
purely online nature of business where accommodation is provided by individual hosts to
customers. Food, beverage, laundry and other services are in control of the host and Airbnb is
not involved in this area other than just informing the customers about what exactly is provided
by a particular host. Some activities handled by information systems in this area are registering
hosts, collecting and listing of their properties and details such as price and pictures and
incoming customer data[ CITATION Dud19 \l 1033 ]. Physical items only include stationary and
supplies to their offices and occasional gifts to their hosts.

4.2 PRODUCTION AND OUTBOUND LOGISTICS (ERP)

As in the previous comparison of inbound logistics, again here it is Taj which is more
involved in “production” which is basically providing of the services. Information systems
implemented at Taj for this purpose handle, keys and rooms allotment, track and provide
desirable amenities, housekeeping management, staff training and management, food production
in kitchen section and tracking and providing engineering and maintenance work (Fidelio).
Airbnb differs in the sense that most of the above mentioned activities are taken care by the host.
Airbnb only has to maintain the platform and attractiveness of the system to both types of its
customers which are the hosts and guests. This is mainly done by technological integration to
enhance smooth communication between both parties (Twilio). 

Coming to outbound logistics, these are the activities done post providing of services.
Various software are integrated at Taj to process activities such as bill generation, accounting
and payments.(ShawMan, Orion). One of the main reasons for the success of Airbnb is its
transparency and review system offered to its customers. At the end of a guests stay, the guest
reviews the host while the host also reviews the guest. Airbnb sends review reminder notification
messages via their app and email and this process is taken very seriously. Reviews add value to
their service. Airbnb also has evolved their payments processing system over the years to cater to
people across the globe and make way for smooth transactions. Financial management and
accounting is also efficiently implemented through their ERP (Epicor iScala).

4.2 SALES, MARKETING AND MAINTENANCE (CRM)

 This part of the value chain is one of the most important for service based industry. Here
it is observed that both Airbnb and Taj give a lot of importance to this area through their
customer relationship management systems. In fact, this is the main area of concentration for
Airbnb compared to other parts of the value chain where it had less activities and complexity in
comparison to Taj.

Customer data collection and analysis is done at Taj from the time of booking a room till
after check out. This data even includes preferred room facilities, food preferences and other
expectations as their main aim is to provide the most comfortable stay to their guests. Guest
preferences are held in a wow card allocated to each customer and updated in the CRM so that it
will be accessible at ease. Data is also stored and used later for marketing (creating awareness
about offers, events etc.). Complaints handling is also taken care by the software and it can be
tracked till resolution. Guest satisfaction tracking system interacts with customers after their stay
and collects various inputs for improvisation of services.

Similarly, Airbnb customer relationship management is also based on the customer data
collection and customer interaction. But one main difference in Airbnb is their concentration on
social media. Airbnb connects with their customers in real time across the globe using social
median management software (Hootsuite). Social media has proved to be crucial for both
customer relations as well as marketing in the case of Airbnb.

5. CONCLUSION

The hotel industry has been around for a long time and Taj has been one of the main
players of this business in India. With the rise and growth of technology it has implemented
various information systems to carry out processes leading to addition of value. We see that each
level of value addition starting from inbound logistics to maintenance has integrated technology
aiming at good effectiveness and efficiency of the services provided.

Airbnb came in with the same objective of providing temporary accommodation to

customers but the way it implemented its business plan was significantly different. Their system
attracted more people due to the ease of use of its platform. Also here they have two types of
customers which are the hosts and guests. Many people were attracted to the idea of being able to
rent out their extra spaces and get income off it.

Though the objectives are same as Taj, Airbnb is seeing very high business on less
investment. It has created a platform strategically and uses more new technology to push its
business forward. Thus they are able to concentrate more on a particular area of the value chain
and then distribute the other efforts in adding value to the overall service to its hosts. This new
approach helped Airbnb break into the market and cause quite a stir in the hotel industry. Thus,
when implemented correctly information systems are powerful in pushing businesses forward
and overcoming the competitive forces. Cost effectiveness, that is low cost leadership and less
investment is one of the major advantages of information systems proved in the case of Airbnb.
They also help in better productivity, communication, availability to customers enabling
businesses to run 24x7, reduced risk of human errors and provide one secure location for data
and its management and analysis as seen in both cases of Taj and Airbnb.

The use of technology and development of information systems has been on the rise from
the past few decades and expected to only increase henceforth. It has thus become almost
inevitable for businesses to integrate and operate through them to stay competitive.

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