Untitled Essay Research Paper SNI has been

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

Korea can be lengthy, cumbersome and expensive (Dept of State)." We must

extensively research our mutual requirements, understandings, and

responsibilities, record it on paper, and be prepared to modify the meanings of

the terms afterwards. The estimated cost of legal representation is $20,000. The

Park Place Hotel project will exceed $1.28 million and is financially attractive

to SNI. SNI, of course, must ensure payment. The continuing slowdown of the

Korean economy, increasing deficit, and falling won add to Korea?s economic

difficulties which makes Korean banks hesitant to extend credit for businesses.

"U.S. companies should consider dealing only on a confirmed letter of

credit basis with new and even familiar clientele. A confirmed l/c [letter of

credit] through a U.S. bank is recommended because it prevents unwanted changes

of the original l/c, and it shifts responsibility for collection onto the

familiar banks involved, rather than onto the seller" (Dept. of State).

Bank of America, SNI?s current bank, has a branch in Seoul and has agreed to

handle the letter of credit for a modest fee of $5,000. Social and Ethical

Issues The Korean culture is over 5000 years old. Modern societal values remain

firmly rooted in the values of Confucianism. Confucianism is not a religion, but

a philosophy of social conduct, that originated in ancient China. In many

respects, the Korean people base many of their decisions on emotion, ethical

social relationships, and the three qualities – love of humanity, sensitivity

for feelings and justice for society rather than on sound business sense or

reason" (Fordham). "Koreans have a great respect for the family and