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TALLINN UNIVERSITY OF TECHNOLOGY
IDY0275: Business Information Systems
CREATING BUSINESS INFORMATION SYSTEM AND E-BUSINESS
FOR CURRENT BUSINESS MODEL FOR
SMART INN
Susanna Laakso / 130576TVTMM
Tiit Hõbejõgi / 120500AAEDD
Ville Ylänne / 130563TVTMM
Professor Enn Õunapuu
Tallinn 2014
Table of Contents
1.Introduction
1.1 Vision Statement
1.2 Mission
2.Business Model
2.1 Value Proposition
2.2 Key Activities
2.3 Key Partners
2.4 Key Resources
2.5 Customer segments
2.6 Revenue generation and margins
2.7 Value chain structure
2.8 Competitive strategy
3.Business Process Description
3.1 Old check-in model
3.2 New check-in process
4. Access Database
5. Balanced Scorecard
1.Introduction
Smart Inn is a hotel chain just starting up in Tallinn Estonia. The main idea behind this hotel chain is to provide the best value for your money by providing affordable accommodation service and everything a smart traveler would want from his/her stay.
We believe that business travelers, one of our main target groups, are looking for maximum functionality at the lowest possible price and that is exactly what we provide. Our rooms have modern designs and we also provide free Wi-Fi. With easy self check-in and check-out, you don’t have to worry about waiting in queues and missing your flight. Truly, our service is just the right thing for a smart business traveler.
For leisure travelers, we provide easy check-in, bitcoin support and good prices. Most people travel to see different places and experience new things and because a hotel room looks (practically) the same no matter where you go, there is no reason to pay extra for it. Save money on your accommodation and use it to experience all that Tallinn has to offer.
Our slogan is “Easy Way, Easy Stay”. Our slogan shows that we are an uncomplicated and easy-going partner for our customers. It’s easy to find us, the booking process is straightforward and the check-in is simple. The stay of our guests is pleasant and our personnel are friendly but unobtrusive. We respect the independence and the individualism of our customers, so they can have a comfortable and easy stay.
Figure 1 Smart Inn logo
Our logo (Figure 1) represents a fox, which is known for its cunning and smart nature. We do not aim to be the cheapest choice we aim to be the smartest.
1.1 Vision Statement
To provide top functionality for the best price in the accommodation business.
1.2 Mission
We provide good functionality for our customers for one of the best pricesin the market. Our employees are encouraged to think up ways of how to make the processes more fluid and increase the overall functionality for our customers.
2.Business Model
Smart Inn has several assets and competitive advantages. Smart Inn offers affordable prices for every customer both business and leisure. The hotel provides reasonable quality and service for the best price available. Smart Inn provides high level of functionality in modern environment with free Wi-Fi all out the hotel and we are among the few places to offer Bitcoin as payment method as well as bitcoin ATM at our lobby.
We will elaborate our business model further in the coming sections.
2.1 Value Proposition
Smart Inn’s main operations are to provide our guests pleasant stay with good value for their money. In Tallinn center area there are no hotels that offer low price rooms, low price accommodations can be found but these are mainly hostels or apartments to rent. Not all people prefer these and want to stay at low cost hotel, especially in today's challenging economic climate business and other travelers want to opt for more economical solution. Lack of these hotels in the center Tallinn area has left a market gap for Smart Inn to fill. Our customers are looking for functionality and economical solution for their needs which our hotel offers them in a way that is unique for Estonia.
We offer free fast Wi-Fi and offer our clients the possibility to pay and exchange Bitcoins to euros at our Bitcoin ATM which is among the first in Estonia. We also have an online self-booking and “one click” online booking for our business clients, which is faster and guarantees a room compared to regular leisure bookings.
2.2 Key Activities
Main competences of Smart Inn include our way, unique to Estonia, to price our rooms and still offer quality and functionality to both business and leisure travelers. Our offer of Bitcoin services is also one of Smart Inn’s main assets. We achieve this by minimizing our costs by having many services available as a self-service (including kitchen and vending machines). We also offer self check-in and check-out. Our cleaning services are outsourced and our staff only includes few people working at the lobby. Security is also outsourced and costs shared with two other companies operating in the same building.
In total, we will have 100 standard rooms available for rent and a total of 10 employees:
●1 shift manager - in charge of the creation of working hours for the receptionists, taking into account vacations, free days, holidays etc. Also in charge of keeping the overall order in the hotel.
●5 receptionists - welcome our customers and guide them through the check-in process (if necessary). Make reservations and answers incoming calls.
●1 IT specialist - in charge of our social media channels and making sure, that the reservation links are working.
●1 marketing specialist - in charge of marketing.
●1 accountant - in charge of bookkeeping.
●1 CEO - in charge of the whole hotel management process, long term strategy, partner relations etc.
Smart Inn has several distribution channels. We advertise ourselves through our key partners and vice versa. Smart Inn gets constant visibility through stickers in RevalTakso- taxis as well as brochures in the ferries that have partnered with Smart Inn. Also, being a tech savvy bitcoin-friendly hotel, Smart Inn gets promotion by the Bitcoin Foundation. They display our ads in agreed on websites and have brochures.
We are also present in social media sites such as Twitter, Facebook, Instagram and Foursquare. Our customers are acquired through effective marketing through our partners and in the web, as well as using marketing campaigns devised by our marketing team.
Our main source of revenue comes from the accommodation business, supporting revenue streams are vending machine profits and profits made by the Bitcoin ATM which charges a small fee when used.
2.3 Key Partners
Smart Inn has strategically partnered with a range of companies with an aim to offer its customers best dealerships and services with the best price available. These companies include services within Tallinn and Estonia as well as travelling to and from abroad. Strategic partnering helps Smart Inn to make it known within locals and tourists as well as attract new customers with smart deals and good reputation.
Smart Inn has partnered with three strategic airline companies, Air Baltic, EasyJet and Ryanair, which offer budget travels to Estonia and share the same “smart and affordable” principles as Smart Inn. By teaming up with these airline companies, the hotel can share deals that include deals such as “flight+hotel” and put promotional ads on the airlines website and vice versa suggest the Air Baltic, Ryanair and EasyJet to its customers.
Smart Inn has also partnered with RevalTakso, a well-known and affordable taxi company in Tallinn. By agreement, RevalTakso constantly makes sure there are taxis in front of Smart Inn for the use of the customers. This way the hotel ensures that customers receive reliable taxi service with smart price as well as that the hotel gets promoted with stickers and ads by the Revaltakso - taxis that drive around town.
As many of potential customers come to Tallinn from Sweden and Finland, Smart Inn has gained valuable partnerships with the most well-known ferry companies: Tallink, Vikingline, Eckeröline and Lindaline. These partnerships help Smart Inn to get media coverage that reaches customers from the neighbor countries as many people come to Tallinn for a couple nights many times per year. Campaigns such as “ferry+hotel” aim to offer the most competitive deals for the tourists crossing the Baltic Sea.
Finally, being a modern and tech savvy hotel, Smart Inn has listed itself as a partnership business to Bitcoin foundation, who keeps the hotel updated with the newest inventions and updates in the virtual currency community and also make sure to have Smart Inn in their lists of Bitcoin-friendly companies.
2.4 Key Resources
Smart Inn´s key resource is in its real estate and people, in the hotel rooms that our customers use along with our helpful staff. These two yield most of the hotel´s income.
Smart Inn has also invested in convenient vending machines that offer the customers of the hotel refreshments, snacks and small useful items such as electronics and appliances. From these items, that the customers and buy 24/7 the hotel gets a cut.
Smart Inn also gets income from offering Bitcoin services to its customers through the Bitcoin ATM. A 2% commission fee is earned every time a customer exchanges Euros to Bitcoins.
The vending machines and Bitcoin ARMs are mostly for the convenience of our customers and not meant as a way to create significant revenue.
2.5 Customer segments
We are targeting mainly two different customer segments:
- Business travelers - they look for maximal economic and functional efficiency in their stay. In other words, ours is the smartest solution for their stay in Tallinn. These guests cover around half of our guests.
- Leisure travelers - this includes all other guests and covers the other half of our customers. Most people travel to see different places and experience new things. Because a hotel room looks (practically) the same no matter where you go, there is no reason to pay extra for it, therefore ours is also the smartest solution for this segment.
2.6 Revenue generation and margins
Most of our revenue is generated through our accommodation business. Our margins are rather small, as we want to be one of the cheapest choices on the market, while at the same providing everything our customers need.
We earn some additional revenue from the Bitcoin ATMs and vending machines, but the revenue received from these activities is a minor part of our overall revenue.
2.7 Value chain structure
Smart Inn’s value is generated from our unique hotel experience and functionality, which is one of a kind in Tallinn area, and from our excellent customer service and easy to use self check-in and booking, as well as with our online “one click booking” for our business clients. Additional value is generated from our free Wi-Fi and Bitcoin services, which make our customers more satisfied with their stay and opportunity to participate in the new cutting edge crypto currency scheme.
2.8 Competitive strategy
Our competitive advantage comes from our high functionality and low prices. Our customers are looking for a comfortable stay with a good price, while enjoying our modern design free Wi-Fi. We seek to be among the few hotels in Tallinn to actually provide high functionality and low prices in a hotel form. We also believe that we can be a leading hotel in this category since our competitors differ in their offerings, for example not having reception at all.
3.Business Process Description
Our business model will remain the same - provide accommodation. Our plan is to change the check-in process to make it easier, faster and user friendly, by introducing the self check-in. Which we feel is the way industry will move forward.
3.1 Old check-in model
Our current check-in process does not support self check-in and all customers have to register themselves at the receptionist. The receptionist will check if the customer has made a reservation or not. If there is no reservation, the receptionist checks for a suitable free room and registers it. In case of self check-in, the first step is to choose a room. In case there are no vacancies, our guest is politely informed of that. Next, the receptionist will register the guest’s credit card information and print out the room cards.
After the stay, guests are required to check-out at the receptionist, where they will hand back the room cards and pay for their stay. The overall process is shown on Figure 2 (Old process). The models of the processes can be seen in the next page.
3.2 New check-in process
Our new check-in process also enables our guests to self check-in. During business hours (09.00-18.00), they can also check-in at our receptionist. If that is their wish, we use the old process.
In case of self check-in, the first step is to choose a room. In case there are no vacancies, our guest is politely informed of that. After providing the necessary credit card information, the self check-in counter prints the room cards and our guest can go straight to their room. After the stay, there is an option to check out at the check-in counter or at the receptionist (only during business hours). Regardless of their preference, after returning the room cards, they are required to pay for their stay.
Using self check-in, we can reduce the number of employees working at the reception to 2 (three less than with our old process). This should also speed up the overall process and increase our customer satisfaction. The overall process is shown on figure 2 (New process).
Figure 2 Process chart
4. Access Database
We keep a database of our customers, to let us know of their preferences. This helps us in our interior design, room allocation, marketing strategy etc. We collect a lot of information about our customers to better understand their needs and requirements, to be able to better accommodate to their needs and come up new innovative solutions to increase our value we offer to our guests.
Figure 3 Access database
5. Balanced Scorecard
Balanced Scorecard is a performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to assist in implementing strategies and objectives. (Investopedia)Source:
This balanced scorecard illustrates Smart INN’s identification and improvement ideas of functions and expectations of their outcomes.
- Learning:will focus on learning from our customers in order to improve our services to better match their needs, as how to further improve our functionality
- Financial: focuses on increasing profits and managing financials, as well as company growth
- Customer: measures our customer satisfaction, customer acquirement and retention
- Internal: measures our success in implementing new selfcheck-in services, success in training employees to use it, as well as evaluating Bitcoin ATM service functionality.
Figure 4 Balanced scorecard
Table 1 Balanced scorecard
Objectives / Measures / Targets / InitiativesFinancial / Increased business profit
Decreased costs / ●
●Increase in sales revenue
●Growth in market share / ●
●First year +10%
Second year +15%
●First year +2%
Second year +5 / New value to customer through functionality
Customer / Easier booking system, self check-in and extra value through Bitcoin atm. / ●Totalnumber of customers
●Customer retention / ●10% more per year
●¼ of customers return / ●Advertisement of increased functionality
●Feedback survey
Internal / Increasing efficiency of booking cycle, re-designing work schedules. / ●Evaluating best usage of self check-in and check-out
●Evaluation of Bitcoin services / ●Self check-in usage at least 50% of all check-ins and check-outs
●ATM and check-in/check-out system should work from day 1. / ●Employee training to use and support the new systems
Learning / Redesign booking system for quick business guest booking, implement the new selfcheck-in system. / ●Customer feedback survey
●Rating in customer base travel sites (Trip Advisor) / ●Ongoing maintenance
●Service improvement / ●Evaluation of the functionality of the new checking system
5.1 Achieving goal targets
Financial & Customer goals
Our financial targets will be met by increased advertisement through Internet and through our partners. We will be using Google AdWords and hotel booking websites to advertise ourselves and have advertisements displayed at our partners locations, and vice versa, depending if we can reach a mutual advertisement agreement with them. Also, using our new automated self check-in process, we plan to lower our costs and increase the speed with which we can serve our customers. This will increase our customer satisfaction and through it the number of recurring customers. We believe that with these efforts and our increased value proposition we will be able to reach our financial goals as well as our customer goals stated in the balance score card above.
Internal & Learning
Our goals will be met by proactive attitude towards work and with constant owner participation, since we believe that owners should be also the ones who lead by example. We seek to test our automated systems for few weeks before launching them and pick beta test groups to try it out before taking it in to everyday use, in order to minimize any bugs or other problems related to the system. We will also train our staff to use the system with a course and on the job. With training and ongoing service improvement we are confident that we can reach our goal targets.