Case Study: Starwood Hotels Uses SOA to Improve Guest Services and Cut CostsBy CIOinsight
Service-oriented architecture is catching on fast: According to a recent IDC report, SOA spending will reach $8.6 billion in 2006a 138 percent increase from 2005, when spending totaled $3.6 billion. By 2010, IDC estimates companies will spend upwards of $33 billion on SOA services.
But some companies got in on the SOA action early. Starwood Hotels, for example, realized five years ago that service-oriented architecture was in its future, says Israel Del Rio, Starwood's senior vice president of technology solutions. The international hotel chain, which includes such brands such as the St. Regis Hotels, Sheraton, Westin's and the W Hotels, saw that its costly, clunky old mainframe system was limiting its ability to accommodate rapidly growing distribution channels like the Internet. "It was too difficult to add capabilities to our CRM system, do proper searching to find propertiesbasically many of the things a modern IT environment needs," says Del Rio.
Starwood's current systems were also having difficult handling the rapidly increasing traffic on its Web sites, what hospitality professionals refer to as the "look-to-book" ratio. "In the old days of the Internet, the look-to-book ratio was 50 to 1. Now it's 300 to 1. So we needed an IT environment that could handle all those requests." To keep the legacy mainframe system would have required a multi-million-dollar investment in upgrades and technical support. "It was very costly, and we didn't want to be held down," he says.
So Starwood began the long process of moving its systems to an open SOA framework. "It was the best way to let us map our technology with our various brands," says Del Rio. Instead of having each of Starwood's hotel chains build their own applications, SOA allows the brands to share the same programs and featuresbut they can be customized specifically for each hotel's look and feel. Sheraton's search function, for example, may deliver information differently than, say, the W Hotels', even though it's the same program. "That way we benefit from using all the same tools that can be called up by different applications and interfaces," says Del Rio.
Because SOA is built on an open framework (meaning it can be called up by different operating systems), it also creates greater flexibility for the company to create new tools. Starwood has put in place an application that tracks guest requests and complaints, for example. "We created a workflow around that to ensure that our guests' needs are satisfied," says Del Rio. The company also created a program that stores and tracks frequent guests' preferences. "These are functions that didn't exist in the mainframe at all," he says. Software from Burlington, Mass.-based SOA vendor Systinet helps Starwood track all the SOA tools it has created. "That way everyone across our brands knows which applications are available," he says.
But it didn't happen overnight. After five years, the company is finally ready to officially dismantle its mainframean endeavor Del Rio expects will save the company as much as $20 million per year in maintenance costs. He expects Starwood to be entirely up and running on SOA by 2007. "It's a very complex initiative with a lot of moving parts," says Del Rio, "but if applied to the right business problem, it produces good results."