Introduction / Globalization

“...in its literal sense is the process of making, transformation of some things or phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, socio-cultural and political forces. Globalization is often used to refer to economic globalization, that is, integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration and the spread of technology”

Firms must understand the importance of globalization. The prevalent nature of Globalization has caused foreign trade to expand and business functions are being distributed to different countries. This has given rise to rapid advancement of technology so as to support international trade in a 'single' society framework.

In this fast changing business environment, communications in trade and operational activities are conducted globally without being physically present. In other words, business partners from both ends of the world are able to conduct business without traveling to a rendezvous point. This is done with the help of technology and it has come to a point when technology becomes the subconscious nature of Mankind.

It is thus necessary for the economy to transform from an Industrial Based Economy to a Knowledge Based Economy as Information Communications Technology or IT is pervasive in today's context. Hence, organizations need to develop a formation technology infrastructure in order to address and keep up with the ever changing business environment.

Therefore, my group shall present you the crux of our project, which is the Information Communications Technology(ICT) Infrastructure and how ICT Infrastructure shape today's firms in conducting their business. We will do a case study of how this infrastructure change hotel room reservations services.

IN THE PAST 

Hotels used to only liaise with tour agencies who will then contact the hotels directly to check on the availability of rooms. This was usually done by calling the hotels directly and could sometimes result in delays if the lines are all busy. As such, customers rarely had direct contact with the related hotels as they all depended on the tour agencies to get the documentations done. Alternatively, customers can call the hotels themselves or make a physical trip down to the hotels directly to book a room where rooms are subjected to availability base on ‘luck’ as all rooms may be occupied if the hotel experiences a high volume of people wanting to book a room at that point in time. This results in inconveniences as people may have to stay in the lobby for long periods of time to get a room.

Even when computers were introduced in the early stages of hotel room bookings, most people usually relied on travel agencies and would make a personal trip to the physical outlets to make such arrangements as there was always a psychological thinking that heading down personally is much ‘safer’. Many people did not trust using the computers as it was high-tech and new which generated uncertainty (security reasons).

Information Communications Technology

"...usually called ICT, is often used as a synonym for information technology(IT) but is usually a more general term that stresses the role of communications (telephone lines and wireless signals) in modern information technology. ICT consists of all technical means used to handle information and aid communication, including both computer and network hardware as well as necessary software. In other words, ICT consists of IT as well as telephony, broadcast media, and all types of audio and video processing and transmission. The expression was first used in 1997 in a report by Dennis Stevenson to the UK government and promoted by the new National Curriculum documents for the UK in 2000."

With the advent of Information Communications Technology (ICT), there is a significant, if not massive transformation of the Business Enterprise. Digital organizations or firms are emerging in our present business environment. These digital organizations are highly dependent on the deployment of technology such as computers, communications network, Information Systems and database systems. The list is not exhaustive nor definite and it can encompass numerous fields of technology. However for the course of our project, we shall discuss about digital firms employing Information Systems in their daily operational activities. These digital firms are called transaction brokers.

Transaction Brokers

In view of today's hotel room reservations, there are several channels in which consumers are able to book hotel rooms in the comfort of their own home. One of these channels is AsiaRooms.com. It is a transaction broker in which they will assist the consumer in booking hotel rooms. An individual will need to input his traveling schedule for the system to generate the best fitting results of hotel rooms availability to the individual.

This process is called Business to Business concept. As shown, AsiaRooms.com is one of the examples of emerging digital firms using Information Communications Technology. AsiaRooms.com represents several hotels in Asia and these hotels represents individual business organizations. This business to business concept is called e-commerce in which business trading are done using ICTs. AsiaRooms.com will bring in business to different individual business organizations it represents and in return it will earn a commission fee through e-commerce.

Business to Consumers

As mentioned above, ICTs brings about an emergence of digital firms which give rise to e-commerce or business to business trading. However, ICTs also brings about business to consumer trading in which the consumer will trade directly with the business itself. Individual hotels which exists like any individual business organizations will employ ICTs to trade directly with the consumer. Much like AsiaRooms.com, HolidayInn.com uses the same method to conduct business.

 

Advantages of employing ICTs for hotel rooms reservations

In the past, as mentioned above, consumers would need to be physically present at the hotel or travel agency to book a hotel room. Sometimes they would have to physically call the hotel to make reservations. With ICTs, consumers would now be able to view hotel rooms availability via the Internet and make bookings through it. At the same time, they are able to utilize ICTs at any location as long as the location has access to ICTs. This has increased the efficiency and minimize the hassle of booking a hotel room. Furthermore, because of ICTs, there are rising digital firms that provides platforms for consumers to book hotel rooms via the Internet. This has encouraged new forms of e-commerce such as AsiaRooms.com to emerge. Instead of having 1 hotel to choose from, this new form of e-commerce or transaction broker allows consumers to choose numerous different hotels in the city. This gives the consumers different choices to compare and choose which will in turn expand the economy in digital firms. As there are now several choices to choose from, digital firms will consistently update and upgrade their infrastructure rapidly due to stiff competition amongst themselves. In the near future, ICTs will enable consumers to swiftly book hotel rooms without much hassle.

Disadvantages of employing ICTs for hotel rooms reservations

While booking hotel online is convenient, there are some disadvantages and risks exposed as follows.

• Risk of revealing credit card number on the net
• Billing at the point of booking. Risk of Exchange rate loss
• Cancellation Charges
• Reviews Discrepancy
• Misrepresentation of hotel image
• Miscommunication
• System error, no reservation of room made

A credit card is usually required to confirm on the hotel booking on several reliable hotel booking sites. This is to safeguard the hotel from last minute cancellation since reservation of room will have an opportunity cost for not able to give out the room to walk-in customers. While credit card gives the users the convenience of making payment on their online purchases, there are some disadvantages for this payment mode.

Firstly, credit card users on the the internet will be exposed to frauds if not careful. Buying on unsecured hotel booking site has a risk on your credit card information being stolen. It is important that we only buy on reliable hotel booking merchants that has a secured web site with a lock on the status bar.

Customers have to provide their credit card information to make payment in order to securitize the room reservation. Certain sites will charge the bill on the credit card immediately at the point of booking while some may only charge when you check in to the hotel. In the circumstance of immediate billing, customers will face the risk of exchange rate loss depending on the difference in foreign exchange rate of the particular hotel's country at the point of billing and on the day of checking in. Instances when u walk in to the hotel and book from the hotel psycically, there will not be any risk of exchange rate loss since the hotel only charge the customers when they book out.

In addition, the hotel booking site will charge a cancellation fee if customers did a last minute cancellation, regardless of whatever reason. Booking hotel online is always in advanced before the arrival of the hotel, usually one month earlier or so. Due to unforeseen circumstances and cancellation is required, a fee will be incurred.

Most hotel booking site will hear reviews from tourists around the world to give their feedbacks on their stay at the hotel. While some reviews are helpful, some may be unrealiable or the reviews may be too long ago hence not useful.

Photos of the hotel may misrepresent the real image of the hotel as some photos might have been taken when the hotel was new. We noticed some reviewers had feedback that the hotel was very dirty and old unlike as seen in the photos.

Miscommunication can happen between the hotel agents and customers. Requests made by the customers might not be bring across to the hotel receptionist hence customers may receive unsatisfactory hotel room when they check in.

Lastly, booking online requires internet connection and we know that online website may sometimes crash. A system failure at the hotel booking site can also caused all the bookings to be deleted hence customers might have a risk of not having reservation when they arrive at the hotel.

Conclusion
While there are pros and cons for employing ICT in hotel room reservation, we feel that ICT has more benefits than disadvantages. It has made the room reservation process easier as it brings more convenience to the users. Disadvantages of ICT can be overcome by frequent maintenance on the website and updated reviews and information of hotels.