Untitled Essay, Research Paper
SNI has been sought out to implement a Management Information System for
Park Place Hotels in South Korea. The MIS project, part of a hotel management
system, will be an integral part of positioning Park Place Hotels as a world
class facility appealing to affluent business travelers. We have researched the
project with respect to technical requirements and cultural risks of conducting
business in South Korea. SNI has successful, relevant experience in developing
and installing a similar system for Comfort Suites in Texas eighteen months ago.
Based on this experience and the close parallel in system requirements, we
believe SNI possesses the technical expertise to be successful. The project is
expected to generate $1.28 million in revenue. Doing business in a foreign
country will be new to SNI. South Korea is an excellent place for this expansion
of our market. "Korea, with its abundant skilled workforce, well-developed
social infrastructure, and large domestic market?will create an environment in
which business can prosper" (American Chamber of Commerce in Korea, 1998).
We have explored the extensive research available on Korean culture and protocol
and believe that with proper preparation our technicians and managers will
succeed in building successful working relationships. We believe this project
presents a unique opportunity for SNI to expand its market and will likely
result in additional opportunities in Korea and potentially other countries. We
recommend a team be assigned to negotiate an agreement with Park Place Hotels
for the development, installation, training, and maintenance of their Hotel
Management System. TABLE OF CONTENTS Page I. Introduction 6 II. Method and
Criteria 6 Sources of information 6 Project elements 6 Technical 6 Cultural 6
III. Evaluation and Analysis 7 About SNI 7 Mission Statement and Vision 7
Organizational Chart 7 Strategic Business Plan 8 Management Strategy 8 Project
Description and Purpose (Goal) 8 Overview 8 Current Situation and Project
Objective 9 Proposed System 10 Software Hardware, Manpower Resources Required 10
Financial Breakdown and Implications 11 Critical Success Factors 12 Design,
Training, and Implementation 12 Anticipated Difficulties in Development and
Implementation 12 Cultural Success Factors 13 Overview 13 Language, Education,
and Work Ethic 14 Legal and Financial Issues 15 Social and Ethical Issues 16
Korean Business Practices 17 Customs and Protocols 18 IV. Conclusions and
Recommendations 20 V. Annotated Bibliography 22 VI. Appendix A. Capabilities of
LMS PRO 1.4 24 B. Financial Breakdown of Park Place Hotel Project 26 C. Gantt
Chart 27 I. INTRODUCTION Strategic Networking, Inc. (SNI) is an innovative
information services and business solutions company. This feasibility study
explores the advantages, disadvantages, and critical success factors in
expanding our reach beyond the borders of the United States into the global
marketplace. Specifically, SNI was approached to implement a Management
Information System for a hotel chain in South Korea. Remarkably, the project is
nearly identical to the Comfort Suites Project SNI completed eighteen months ago
in Dallas, TX. Our success and reputation resulting from that project came to
the attention of our potential Korean partners. Does SNI have the capability and
available resources to implement this project? Absolutely! This paper explores
the financial benefits and risks associated with conducting business in Korea.
Extensive research was conducted concerning the cultural, political, and social
environment in Korea. It is our belief that the financial rewards of this
project outweigh the numerous challenges we will face. II. METHOD AND CRITERIA
Sources of Information Information in this paper should be considered extremely
reliable. It is based on extensive research on American/Korean business
practices conducted through the U. S. Department of State, U.S. Embassy, Seoul,
Korea, U.S. Department of Commerce, Korea-U.S. Committee on Business Cooperation
(CBC), Korean American Chamber of Commerce, Central Intelligence Agency, area
Korean business leaders, as well as traditional library and internet sources.
Project Elements There are two elements to this feasibility study: 1. Technical
? Does SNI have the software, hardware, manpower, and training assets
available to successfully implement the project? 2. Cultural ? The cultural
"risks" associated with this project are immense. We will assess
political, legal, ethical, and social issues and how they may impact the
project. III. EVALUATION AND ANALYSIS About SNI Mission Statement and Vision SNI
is an innovative information services and business solutions company. SNI helps
companies become more productive. SNI helps create new business lines and enter
new markets. SNI delivers services and solutions focused on each client?s
needs, with particular emphasis on helping clients more effectively serve their
customers. SNI integrates three core disciplines in providing solutions and
services to its clients: business integration, systems integration and
applications development, and information technology infrastructure services.
Strategic Networking, Inc. Organizational Chart Figure 1. Strategic Business
Plan SNI?s business strategy is controlled growth through selective
partnering. SNI believes that quality vs. quantity at an affordable price will
separate SNI from other, larger MIS consulting firms. While numerous
opportunities exist domestically, SNI has recognized the value of the Internet
and the growing global economy. SNI participates in numerous international trade
shows in order to develop business contacts. Management Strategy At SNI, people
are our most valuable assets. SNI LISTENS attentively to our customers. Every
member of our team, including our CEO, is available 24 hours a day, seven days a
week, to go anywhere, anytime, to SERVE OUR CUSTOMERS. Strategic Networking,
Inc.? ? LEADS by example ? Understands that today?s business problems
require a MULTI-DISCIPLINARY approach to finding the best solutions. ? Will not
accept a project that we can not deliver the EXPECTED RESULTS at the EXPECTED
TIME. Project Description and Purpose (Goal) Overview SNI was introduced to Mr.
Park Chon He at the annual Hospitality Industry Technology Show in Los Angeles,
CA in December 1998. Park Chon He is the son of Mr. Park Soon Lee, founder and
owner of Park Place Hotels, Inc. of Seoul, Korea. Park Place Hotels, Ltd. is an
upscale, family owned, super-deluxe hotel chain in South Korea. The chain
consists of three properties located in Seoul, Puson, and Inchon. The
69-year-old family patriarch heads the business with Mr. Park?s three son?s
co-managing the properties. The hotel chain caters to the affluent business
traveler. Each hotel is ideally located in major business districts. The younger
Park Chon He believes that a competitive advantage can be achieved through the
use of information technology by enhancing their ability to deal with
competitive hotel chains penetrating their marketplace. He believes that their
long-term strategic success ultimately depends on how well Park Hotels executes
their primary mission of delivering the lowest cost, highest quality travel
experience to their business customers. Park Chon He has gained the confidence
of his father to save the ailing family business and has been tasked to
modernize the family hotel chain. Current Situation and Project Objective
Foreign hotel chains such as Hyatt and Hilton are encroaching on Park Place
Hotel?s established client base. Business travelers from the United States,
Europe, and other Asian countries are accustomed to business amenities such as
secretarial, translation and interpretation services, telecommunications,
in-room Internet access, business services, and sophisticated reservation
systems. Traditional Korean "ambiance", the hallmark of Park Place
Hotels, is not enough to attract critical (and profitable) business meetings and
conventions. Bookings are down 22% from a year ago. This is a hotel chain in
trouble. Hotels in Korea are classified into five groups: super-deluxe, deluxe,
first class, second class, and third class. In order for Park Place Hotels to
compete in the profitable super deluxe (business) segment, they must modernize
their information systems capabilities to meet the needs of their business
customers. If they slide down the "quality scale", their profitability
and future existence will be impacted. Mr. Park Chon He is the change agent for
this modernization. His goal is to turn Park Place Hotels into a world class
hotel chain by computerizing their guest management system, modernizing their
telecommunications capabilities, and increasing awareness of his facilities via
the World Wide Web. SNI?s objective would be to develop and install the guest
management system and Internet portal. Proposed System Software, Hardware,
Manpower Resources Required The software program selected for the project is an
off the shelf program called LMS PRO 1.4. manufactured by Inter-America Company.
LMS includes the following functions. (See Appendix A. for details). *
Reservations * Registration * Charge Posting * Guest Services * Guest Settlement
* Housekeeping * Travel Agency Accounting * Telephone Service * Package Plans *
Night Audits *Management Reporting * Guest History SNI installed the LMS PRO 1.4
software in a large hotel chain headquartered in Dallas, TX eighteen months ago.
Our experience with its capabilities offers SNI a huge competitive advantage.
Mr. Park Chon He, hearing of our reputation, sought SNI out at the Hospitality
Industry Technology Show. We recommend using the IBM AS 400 running NT Network.
The Dallas project continues to run smoothly using this hardware. However, since
Koreans use 220 volts as their power source, converters with power stabilizers
to ensure the computer doesn?t see power bumps will also be required. Our on
site Korea team will consist of four programmers and one project manager from
SNI. A local, Korean programmer and interpreter will be hired to supplement our
work team. Two Internet programmers and one lead project manager will be
utilized domestically. Financial Breakdown and Implications Project cost
breakdown is as follows: (See Appendix B. for detailed breakout) Chart 1. Total
Project Revenues Chart 2. Source of Revenue as % of Total Project Critical
Success Factors Design, Training, and Implementation The actual design of the
system is fairly straightforward. LMS PRO 1.4 is a proven software program that
we have experience implementing. Even though Mr. Park Chon He is the change
agent for this project, his father exerts considerable influence on the project.
It is critical Mr. Park Soon Lee be involved in all phases of the project. We
recommend doubling the normal planning and design phase of the project in order
to ensure: ? An adequate role of user in the implementation process ? Complete
management support for the implementation effort ? Increased user involvement
in the design and operation of the hotel information system. Involving users in
development offers opportunities to design the system according to their
priorities and business requirements. They are more likely to respond positively
because they have been actively involved. Cultural differences between SNI and
the client need to be considered in the analysis, design, programming, testing,
and conversion phases of the implementation. Anticipated Difficulties in
Development and Implementation The following issues summarize the anticipated
difficulties in development and implementation of the Park Place Hotel MIS
system: ? Implementation team must include Korean representatives, preferably
support personnel and end users. ? LMS PRO 1.4 is an off-the-shelf program. We
must build flexibility into the program to anticipate future needs of the
organization. ? Time and money required for software development is often
underestimated. ? Time and money required for proper testing is often
underestimated. ? Users must be significantly involved in testing. ? Training
must be completed prior to conversion. ? To compensate for cost overruns and
delays, we should factor in an additional 25% in man months. ? Performance and
training standards must be established with proper documentation written in both
English and Korean. ? Provisions for system maintenance after our three-year
service agreement must be established. It is clear that SNI has the capability
to implement such a project in the United States. Our performance at Comfort
Suites, a much larger project in scope, demonstrates this. Our biggest challenge
with Park Place Hotels is the Cultural Success Factors that we must adapt to.
Cultural Success Factors Country Overview No foreign business enterprise can
hope for success in Korea without a thorough understanding of the people. The
Republic of Korea, better known as South Korea, or "Land of the Morning
Calm", has a rich history spanning over 5,000 years. Today, Korea is an
important trading partner for the United States. Korea?s population of
forty-five million people inhabits an area slightly larger than Indiana.
"As one of the Four Dragons of East Asia, South Korea has achieved an
incredible record of growth. Three decades ago its GDP [Gross Domestic Product]
per capita was comparable with levels in the poorer countries of Africa and
Asia. Today, its GDP is already up with the lesser economies of the European
Union. This success through the late 1980s was achieved by a system of close
government business ties, including directed credit, import restrictions,
sponsorship of specific industries, and a strong labor effort. The government
promoted the import of raw materials and technology at the expense of consumer
goods and encouraged savings and investment over consumption. The Asian
financial crisis of 1997/98 exposed certain longstanding weaknesses in South
Korea’s development model, including high debt/equity ratios, massive foreign
borrowing, and an undisciplined financial sector. Also, a number of private
sector conglomerates are near bankruptcy. At yearend 1997, an international
effort, spearheaded by the IMF, was underway to shore up reserves and stabilize
the economy. Growth in 1998 was sharply cut. Long-term growth will depend on how
successfully South Korea implements planned economic reforms that would bolster
the financial sector, improve corporate management, and open the economy further
to foreign participation" (CIA World Fact Book, 1999). Language, Education
and Work Ethic Korean is the spoken language in South Korea and Hangul the
written language. English is widely taught in Junior High and High School. Korea
enjoys a 98% literacy rate (CIA, 1999). "Most Korean professionals speak
English, and most meetings can be conducted in English without an interpreter.
Generally speaking, catalogs, promotional literature, and instructional material
are acceptable in English. Don?t take it for granted that those who speak
English will understand everything you say. If a statement is met with silence,
it may mean that you were not understood" (Van Horn, 1989 page 211-212).
Koreans have a very strong work ethic, working, on the average, over 54.7 hours
per week. "It has been said that the Koreans are the only people in the
world who can make the Japanese look lazy" (Van Horn, page 211). Because we
will be working with the hotel service industry, we expect few language barriers
requiring the use of interpreters on site. However, tight social and business
inner circles make it extremely difficult to enter the Korean market without a
qualified Korean representative. "Local representation is essential for
foreign firms hoping to be successful in the Korean market" (Dept. of State
Country Commercial Guide ? FY 99). We will be required to appoint a registered
agent in order to handle government import paperwork. Their commission rate of
7-10% has been factored into the overall project costs. Legal and Financial
Issues Legal advice in setting up our contract is strongly recommended.
"Though Americans may regard a written contract as legally binding, a
Korean may regard the same contract as a ?gentlemen?s agreement? which is
subject to further negotiations dependent upon new circumstances (Dept. of
State)." "If a contract is violated in Korea, the legal procedures in