Is it possible to successfully use E-commerce in the hospitality sector, where it is used in a traditional restaurant business?
E-commerce, the concept of purchasing goods (and services) through online portals has grown in leaps and bounds in the past decade; starting with pioneers such as Amazon that set the pace for such systems (Adamson, 2016). Major blue chip companies such as Apple now use e-commerce as part of their integrated sales strategy and it has been very successful. E-commerce is a fast rising business model and the vast potential offered by the internet has made it easier for organizations to reach out to more customers, more efficiently and with higher margins as it is a form of direct to consumer sales model. The hospitality sector, despite having its operational model remaining the same, has not been left behind by E-commerce, with systems available to enable travellers book accommodations at low costs using web based systems. Fast food retailers have not been left behind either, as retailers such as MccDonald’s have E-commerce websites for online orders. However, in the traditional reservation based walk in restaurant, this concept still remains largely unexploited, despite its numerous potential (Mozeik, Beldona, Cobanoglu, & Poorani, 2009). The restaurant business is characterized by a model in which patrons walk in to the restaurant, or make a reservation, place an order which is prepared and then they pay at the end.
The focus of this paper is to develop a solution for the Coventry based Indian restaurant, which at the moment, does not have even a website, although it does have a social media presence on Facebook. This paper will adopt a secondary research methodology in which peer reviewed articles, scholarly articles, and other credible verifiable information sources to propose an e-commerce solution for the restaurant. Articles and content that involve or include case studies will be particularly useful in developing a solution for the Indian restaurant. An abductive research approach will be used for this research; this type of research entails explaining incomplete observations that are specified at the start of the paper. For this case, it’s used to answer the research question stated at the beginning of this paper. The context of the research is a remedial study in which the paper will formulate a solution to improve operations at the restaurant and correct the present challenges faced (Kidd and Song, 2008). The undesirable condition and their causes as well as its related processes and conditions will be evaluated and then a detailed plan and strategy proposed to remedy it. The research will also suggest a method of implementation to achieve the desired goals and objectives.
Secondary research is also used; this is a research method in which findings from other primary research is used for the purposes of a present research. The advantages of using this method is that it is relatively cost effective and one can obtain sufficient amount of data in a relatively short period of time; the research will be a desktop based research where a computer and the Internet is used for the research. The use of secondary research and information will help provide a clear context with which to answer the research question (Smith, 2008). The research will start by formulating a research question to create the context of the study and provide a roadmap for the research. The case scenario of the restaurant will be introduced and discussed briefly in order to provide a contextual overview of the problem and justify the selection of the used research question. The business strategy proposed to solve the problem will then be discussed, with the expected changes from the implementation of the system explained. An implementation plan will then be discussed and explained, along with the benefits that will be obtained from the system.
This case is about an Indian specialty restaurant located in Coventry, UK named My Dhabba. The restaurant does not have a website at the moment, although it does have a social media presence on Facebook (found at https://www.facebook.com/MyDhabbaCoventry/ ). The restaurant’s food has become very popular in recent times, resulting in the facility remaining fully packed, with reservations made a week in advance. The restaurants’ management feels they should better serve their customers and are considering the use of E-commerce to supplement the brick and mortar restaurant business, offer better customer satisfaction, and increase their revenue and operational efficiency. The internal operations are also unwieldy, with spreadsheets and a basic PoS (point of sale) system used for managing client information and accounting. Orders for supplies are done manually based on availability and use, and often, the restaurant fails to get their desired ingredients and raw materials on time, sometimes leading to some popular dishes not being available for some time. The management would like to know their customers better; their preferred dishes, visit history, and other personal information such as their birthdays and contact details in order to have an intimate relationship with them and to enhance service delivery. The management does not have a very big budget for this exercise and would like a cost effective solution that they can scale in future as funds and needs increase and wpuld like to have a system in place within eight weeks. This paper proposes the case for an e-business model for the My Dhabba restaurant, by outlining a strategy and summarizing the required changes, and then describing a plan for implementation, as well as the benefits from the system and how they can be measured. Further, the paper identifies some of the risks associated with implementing such a system and gives recommendations on how these can be overcome.
The strategy for enabling my Dhabba to have an e-commerce system requires the development of a database driven enterprise e-commerce system with accompanying enterprise resource planning software for business purposes. The business strategies of the restaurant are to provide better customer services by reaching and serving its existing customer base and improving its internal operations. The management has a limited budget and would like to have a new e-commerce system in place within eight weeks of a cost effective and scalable system to meet their strategic objectives. The proposed system will be a cloud based system, designed around a hybrid cloud in which the restaurant will have a basic physical infrastructure and a public hosted cloud where the ERP and database, as well as other supporting software will be based. The cloud service will also have a backup for its systems and operations to ensure business process continuity. The first step in developing the system will be to capture the user requirements and then create user requirements document, before setting up a team consisting of a web developer, a cloud expert, a systems integrator, and the author will play the role of project manager and trainer. The management and staff at My Dhabba will be involved in the whole process, with views and inputs sought from staff, right from the user requirements gathering phase. This will ensure that the changes are long lasting as change management processes will be used to ensure that not only the systems at the restaurant change, but their culture and operational strategy as well, aligned with their new enterprise infrastructure. Effective change management is a critical factor in the success of IT projects such as the envisaged one for My Dhabba.; they also help reduce resistance to new ideas and business concepts (Hau and Kuzic, 2010).
The proposed development method is an iterative agile method in which the XP framework will be used to ensure the system is developed fast with as few issues and errors as possible. Based on the user requirements, an enterprise e-commerce website hosted in a cloud platform will be developed for the restaurant. The website will be linked with the restaurants’ social media handles to be used for customer service, capturing customer sentiment, and for advertising and promotion. New hardware and software will also be purchased for the restaurant; including an in store point of sale system and a server to store some information on site, along its work stations. The web and mail servers, as well as database and backup system will be hosted in the public cloud platform. The proposed ERP system is Zoho; which is highly customizable and is a cloud hosted service. This will allow the restaurant to have the SaaS (software a s a service) cloud provisioning system with accompanying networks and intranets also hosted on the cloud a s IaaS (infrastructure as a service) and PaaS (platform as a service). The cloud hosted enterprise system will be embedded in the e0-commerce website to handle operations, including capture of user details and transactions and these will be updated in the cloud hosted database.
The ERP will be used for inventory management and ordering, finance and accounting, and as a CRM to manage customer relationships. Further, the website will be linked with a popular restaurant application for mobiles. Users will visit the website, view the menu items, select a food item(s) and then make payments through the website. The website will have a payment processing system that can accept cards, online and mobile pay wallets, and pay processors such as PayPal and Skrill. This will provide customers with various convenient options for making payments. Upon making an order, the various kitchen staff will be notified and the confirmed order acknowledged through e-mail and text message. My Dhabba will use local delivery firms to affect the delivery, with the client paying a small extra fee for deliveries. The customers can be able to follow the status of their order through the online portal. The e-commerce system will be integrated with the physical restaurant so all operations and functions are streamlined
The new ES system will require a total upgrade of the existing My Dhabba website, the addition/ implementation of various systems that include an integrated finance and accounting system, an inventory management system, a CRM, and the website will have a financial/ transaction processing feature. For instance, it is proposed that Ruplai invest in SAP One ERP (enterprise resource planning) with integrated e-commerce so that it will enable the e-commerce website to also have the ability to capture data and records from customers, or use ZOHO with customized features added to the new e-commerce website. These changes imply that My Dhabba will have to rebuild their website and change it from the current one to a purpose built e-commerce website where transactions can be undertaken, including clients registering or logging in and making orders the website will have an interactive feature where customers can, for instance make inquiries on the availability of certain menu items and get a direct feedback, along with the time it will take to have it ready and deliver. Further, clients will have the ability to evaluate the available menu items and have additional extras added as per their specific taste and then complete the transaction by making a payment through one of the accepted payment methods (debit or credit cards, mobile wallets, online payment systems such as PayPal). Further, Ruplai will have to invest in matching IT equipment and facilities; the proposal is to have a hybrid cloud architecture implemented where the restaurant has its enterprise system hosted in a public cloud where it will use various cloud services, including SaaS (software as a service-the ERP), IaaS (Infrastructure as a Service-database and backup system), and PaaS (Platform as a Service-virtual network and intranet).
The restaurant will install a small data center with linked terminals for operations such as transaction processing and reporting to form a private cloud with a data center and linked with its public cloud instance through a bridge. The hybrid cloud is proposed because it enables scaling for specific applications, including ensuring business process continuity by hosting the e-commerce website online, offers opportunity for innovation (Heath, 2016) enables increased speed to market, better risk management and improved connectivity (Farley, 2013), as well as ensuring a secure system (Rountree and Castrillo, 2014). To save on costs, it is proposed that the company uses virtual machines for backup and to implement RAID architecture to ensure data integration and redundancy. All transactions and operations will then be backed in the cloud to ensure continuity in the event of some local problem such as database shut down (Khalid, 2017).
As such, My Dhabba will have an enterprise system with an e-commerce website hosted on hybrid cloud architecture. The e-commerce website will also be hosted on the cloud and will perform a variety of functions, including enabling advertising and promotion, a first line for customer service, capture customer data and information, and as a sales portal. The cloud architecture is proposed because it is the best for e-commerce websites; it also costs of investment and ownership in new equipment, while enabling enhanced scalability (Shahid, 2017); (Goetsch, 2014). The new ES will also have a link to a courier service provider that will be responsible for making the deliveries to customers within the greater Coventry area. The e-commerce model will work hand in hand with the traditional brick and mortar setup, so that clients can still make reservations from the web portal. The way My Dhabba operates will also change because of the e-commerce model; all transactions will be captured and recorded in the ERP, both for in restaurant and online sales. When clients make an order through the website, the staff will notify the courier company of the order and update the client via a text and e-mail message that their order is being processed and the estimated time to delivery. The ERP will integrate suppliers and manage inventory and stocks, so that order are made based on what the system shows; this will help with issues such as when to make replenishments and when to order, further enhancing efficiency. The restaurant will also be able to get a high level view of its operations, number of customers, sales, and regions where online ordering is most prevalent, along with other necessary information. In summary, the hardware infrastructure, software systems, and operational strategy for My Dhabba will be drastically changed
The implementation will start with a detailed evaluation of the current systems, processes, and IT infrastructure and resources. This will be done by a system analyst and proposals made on the required infrastructure. This will be followed by a proposal of a suitable system that solves the present problem and provides a blue print for further development of the new system. The proposed development and deployment system is the agile framework using the SCRUM methodology. Agile has been proposed because of its many benefits, including iterative development that allows for frequent testing and evaluation, eventually creating a high quality product (Layton and Ostermiller, 2017). The agile framework will also ensure greater control over the project, higher customer satisfaction, reduced risks, and ensure faster returns on investments (ROI) (Baah, 2016). The agile method will ensure better capturing of user requirements which will be refined during the iterations as the system is developed.
The development will be preceded by accurate budgeting to ensure adequate funding is availed for the project. Before development starts, change management processes will be used, including sensitizing staff on the new system and seeking their input to ensure a smooth and successful business process re-engineering (Hussein and Dayekh, 2014). Development will be done concurrent with other tasks, such as purchasing new IT equipment will be undertaken as the e-commerce website is developed, as suitable cloud services are sought and evaluated. This will ensure fast process in development and that the final product will meet the needs of the customer while allowing for future scalability. The e-commerce website will be developed iteratively and tested, with the cloud based enterprise systems also incorporated. The testing will start after the private cloud is put in place (meaning after requisitioning for the necessary IT equipment). Existing data and information will then be migrated to the new ES; this will be done through effective planning, with all data backed up prior to migration. Migration will be undertaken from the backups to ensure present operations are not interfered with and to ensure continuity even as the new system is put into place (Hosseinian-Far, Ramachandran and Sarwar, 2017). A trial test version of the system will be used to evaluate the system and for training staff on how to use it, before the system finally goes ‘live’ after several iterations and tests to ensure smooth operations.
Benefits of System
- The new ES will confer several benefits to My Dhabba restaurant; the benefits include
- Efficient operations: The e-commerce based enterprise system will capture data and automatically store them in a cloud environment. This data and transaction information will happen automatically, resulting in efficient operations. Speed is also very crucial for an e-commerce business to keep customers happy. For instance, when a website takes more than three seconds to load, 40% customers abandon it, according to research (Bhatia, 2018)
- Exposure to a wider market: The web presence will mean that the restaurant has robust online presence; when linked with social media and concepts such as search engine optimization, My Dhabba will be exposed to a wider market, even for people that have never heard of it before ('Salesforce', 2018).
- All round operations: A website stays up and running even when people have closed; as such the firm will be able to operate round the clock; people can order for food and other items at any time through the website ('Salesforce', 2018).
- Effective decision making based on data: The ES will capture all data and transactions in a centrally located place, and automatically update any changes. With this information, the management can better use the data for management accounting and better decision making based on generated reports; for instance, the system will show what menu items are the most popular, and so plans can be made to increase their production, as the less popular items are reduced (Marti?nez-Lo?pez, 2013).
- Increased revenues and customers: With a wider reach and all round operations, My Dhabba will benefit from increased sales; the project =ion is that e-commerce sales will overtake in-restaurant sales as e-commerce is unlimited (Rezaul, 2012)
- Better customer service: The website will be interactive, where customers can ask questions and get instant feedback or detailed feedback through e-mail. With a social media link, the restaurant will capture customer sentiment and respond to client needs on social media for better service delivery (Rezaul, 2012)
- Scalability: The e-commerce website will be highly scalable, thanks to cloud computing as it allows down scaling or up scaling depending on demand. This will ensure that should there be need to expand operations in future, the restaurant can simply requisition for more resources from the public cloud services provider (Gupta and Sharma, 2009)
- Security: Cloud services will provide better security for the Ruplai IT resources, especially client data, including credit card and other financial details as well as personally identifiable information.
- Lower costs and cost savings: The cloud architecture will ensure My Dhabba does not have to invest in expensive hardware and software that require upgrading after some time, as well as maintenance costs. Cloud services are paid for per use as well, so they will only pay as per what they use (Gupta and Sharma, 2009)
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