An Investigation of How Big Data Can Enhance the Management of Small and Medium Enterprises (SMEs) in the Hospitality Sector

An Investigation of How Big Data Can Enhance the Management of Small and Medium Enterprises (SMEs) in the Hospitality Sector
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An Investigation of How Big Data Can Enhance the Management of Small and Medium Enterprises (SMEs) in the Hospitality Sector
Background
In the past two decades, researchers and practitioners in management fields have paid substantial attention to innovation in advancing business interests (Boons, Montalvo, Quist, & Wagner, 2013). The hospitality industry has also adopted some of these solutions to facilitate growth, profitability, and sustainability of businesses (Prud’homme & Raymond, 2013). There is no doubt that the role of information technology (IT) is imperative in the formulation of short, medium, and long-term strategies in the hotel business. The advancement of Cloud technologies has facilitated new kinds of databases that can be accessed through online platforms (Paul Rajan & Shanmugapriyaa, 2012). The large amount and variety of structured and unstructured data gathered from business, systems, and devices can be analyzed with sophisticated applications, making it useful in management functions (Stoicescu, 2015). There is no doubt that it is impossible to accurately predict the future in any business context. Fundamentally, the changing customer behaviors make it difficult for decision-makers to engage in strategic management in the hospitality and hotel businesses. Nevertheless, studies show that staying up-to-date with new technologies and assessing their applications can increase effectiveness in management and support the growth of businesses. The hospitality and hotel industry offers services to millions of consumers every day and the management has the mandate to ensure that the expectations of each client are met (Testa & Sipe, 2012). Meeting these expectations contributes substantially to the profitability and sustainability of the business. In the recent past, there has been an increase in the use of advanced analytic solutions in hospitality and hotel businesses to identify what keeps the customers happy and the trends that emerge in business, which can be used to determine the customer behavior and how it might change in the future (Kandampully, Zhang, & Bilgihan, 2015; Prud’homme & Raymond, 2013). The intent of this paper is to propose a study on how Big Data analytics can be used in Small and Medium Enterprises (SMEs) in the hospitality sector to increase effectiveness in management.
Problem Statement
The hospitality sector is largely composed of SMEs that are highly competitive. SMEs are the backbone of most economies by providing a source of income and employment for many people. Nevertheless, SMEs are less likely to engage innovative measures that support their growth and competitiveness (Bos-Brouwers, 2010). Although many studies address theories and models employed in the hospitality and service industries, there is little focus on innovation among SMEs in the sector. Reviews highlight that innovation has a critical role in changing the market conditions and competitive approaches that drive success in businesses. SMEs in the hotel and hospitality face the challenges in collecting, managing, and analyzing big data that can offer the management support in decision making and facilitate the maximization of profits and enhance the customer experience (Dubai SME, 2012). Notably, the huge number of SMEs in the hospitality and hotel sector collects a large volume of data that they can actually manage or analyze. Despite this, there it is evident that large organizations in the sector have increased efficiency in management through creative strategies that facilitate competitive advantage through the use of big data (Laudon & Laudon, 2013). In this light, for SMEs to gain strategic competitive advantage, the management needs to identify the position of the business and what it needs to achieve by deploying big data. Subsequently, there is a need to gather insights on how managers in SMEs can use big data in fostering effectiveness in business undertakings. SMEs often use a lot of their resources trying to reach potential customers through their marketing strategies, which compromises their profitability (Bos-Brouwers, 2010). Additionally, poor marketing strategies due to little investment in such ventures by the SMEs reduce their capacity to compete effectively. The dynamic customer behavior makes it difficult to predict the customer flow, which raises issues in managing the inventory (Prud’homme & Raymond, 2013). Despite their potential to gather and utilize the large volumes of data gathered in the businesses, the SMEs face challenges that can be resolved through the effective use of big data analysis.
Goal
The intent of this study is to develop understandings about how big data analysis can be used to foster enhanced effectiveness of management activities in SMEs in hotel and hospitality businesses. The objectives of the study include:
To determine the levels of big data innovation in SMEs in the hospitality sector
To determine the role of big data in managing SMEs in the hospitality sector
To determine the future of big data in SMEs in the hospitality sector
These objectives will be met by a critical analysis of literature and data analysis. The accomplishment of the objectives will be determined by the credibility and reliability of the study in practice. In this light, the insights gathered should be applicable and useful for promoting and enhancing the use of big data analysis among SMEs.
Relevance and Significance
The increased application of big data analysis to improve business highlights the key relevance for conducting the study and providing the relevant insights to facilitate the transformation of SMEs management. Often, individuals in management positions lack the technical skills that can facilitate effective use of information technology systems (Laudon & Laudon, 2013). The study is relevant to the people in hospitality businesses to offer the best practices that are used by other organizations in the hospitality sectors as well as other businesses that have implemented the use of big data in their management systems.
The study is imperative in contributing to public knowledge and improving the use of IT in hospitality businesses across the globe. The study will highlight how big data is deployed in the SMEs and compare to how it is used in other businesses. Such an approach will identify the weaknesses that can be avoided or mitigated with the use of big data in hospitality. Resultantly, the insights gathered will contribute to the management undertakings by providing a reliable base of advocating for investment in the use of big data in the enterprises. Due to the limited number of studies that address the issue under study, the conclusions of this study will contribute to the literature and recommend the gaps in knowledge that should be addressed by subsequent studies. The study can be employed by IT professionals in developing models that can be used in the SME hospitality businesses. The findings can also be used to develop the organization, infrastructure, data management, and analytic systems that can enhance business performance. By generalizing the findings, the study can be employed across all types of hospitality and hotel businesses to improve their management and business support strategies.
Literature Review
The modern business environment presents a dynamic context that is characterized by advanced technological solutions that are constantly changing and unpredictable customer behavior. Subsequently, both large organizations and small and medium-sized enterprises are focused on establishing means that can reinforce their competitiveness and increase productivity (Prud’homme & Raymond, 2013). The hospitality sector faces numerous challenges due to the unstable factors that influence customer behavior. For instance, climate change, competition, service quality, reputation, and pricing are some of the key aspects that influence the intention of potential customers to visit the business or return to the business. These factors have led to proactive management undertakings that are designed to address the customer expectations and satisfaction, while at the same time ensuring the businesses are profitable and sustainable (Ha & Jang, 2010). Focus on SMEs across most industries shows that there is increased consciousness for the management to drive productivity and profitability through investment in technological solutions. These concepts are drawn from the success of large organizations that have exploited technological capabilities to boost customer experience, interaction, and prediction of customer behavior (Ries, 2011).
Advancement of IT tools has facilitated change in management by promoting data-based decision making. Additionally, IT has facilitated the competitiveness among businesses in the same industry by integrating the supply chain and inter-organizational functions, which generates a significant amount of data (Kambatla, Kollias, Kumar, & Grama, 2014). Despite the advantages of IT in SMEs as highlighted in the studies, there are still many enterprises that have not realized the benefits that come with the effective use of the systems in supporting business operations and decision making. Consequently, the large organizations have profited more from the use of innovative solutions compared to SMEs in the hospitality industry. Additionally, the adoption of IT solutions within SMEs remains relatively low. The phenomenon can be attributed to the unique characteristics of the hospitality sector, where the SMEs have limited access to critical market information, which the larger organization can assess from various sources (Awang, Aziz, & Samdin, 2012). Additionally, often SMEs lack management processes such as financial analysis forecasting, project management, and strategic management that are perceived as key factors of success and business sustainability. SMEs have a tendency of offering employment to the generalists rather than specialists who can foster innovation in the business. Other management shortcomings include reliance on short-term planning, less formal and adoption of dynamic strategies, lack of a reliable decision-making process, and the lack of motivation to create and engage in standard operating pro...