Tourism industry must view adoption of information technology as a long-term project

Information technology has become a part of people’s everyday lives and its adoption in business is almost taken for granted these days.

However, instead of treating technology adoption as a one-off, managers and decision makers must acquire better knowledge of the progressive and accumulative affects of such technology. This will let them make a better informed decision on what – and how – technology can be best geared for their business.

Because of the volatility of the tourism industry, decisions on technology by organisations tend to be fairly short term, focusing on solving problems in the present moment. Managers in this sector might thus face much greater challenges than peers in other industries, in their attempts to adopt information technology for realising long-term strategies.

Literature proves technological development, business innovation and travellers’ lifestyle changes are three powerful engines mobilising tourism and hospitality organisations to adopt information technology. For over 20 years, an information technology infrastructure that enables communication at a global scale, highly efficient but low-cost data processing and heavy personal use of technology have profoundly affected the tourism industry.

However, in the past decade, such technology has also brought forth rapidly escalating competition and the breakdown of conventional value chains. Online travel agencies, sharing economy platforms such as Airbnb, the transformation of customer relationship management by smartphones and big data analytics, etc are just some examples.

Ongoing changes in the macro social environment and micro business contexts have, therefore, made digital transformation a must for every tourism organisation.

Frontline managers crucial for effective adoption

The government has backed the development of smart tourism as one of the four main growth strategies for Hong Kong’s tourism industry, as stated in its latest Development Blueprint for Hong Kong Tourism Industry report.

Both short and medium-term initiatives were proposed to encourage the industry to leverage information technology to enhance its competitiveness. In 2016-17, the government injected HK$10 million to subsidise small and medium-sized travel agents to adopt technology to improve their productivity and service quality, as well as to strengthen their competitiveness in local or overseas markets. So far, more than HK$4 million has been committed to support more than 80 agents.

And while the government’s support for digital transformation is in the right direction, the affect of one-off efforts is hard to predict. Studies have found that the leverage of such investment is correlated with the integration of information technology into organisational routines.

Yet, the impact of technology on business practice and outcomes hinges much on the relationship between technology and people within the organisation. Thus, it is crucial to ensure managers at the operational level also understand the technology adopted.

Furthermore, to ensure the sustainability of the effects of the technology adopted, managers and decision makers need to understand the overlapping processes and complex impact of information technology.

Digital transformation involves a series of adoptions in a relatively longer term. Interactions involved in this process are in turn driven by changes in the macro social or market environment, and advances in hardware and software capabilities.

Technological adoption is self perpetuating

We conducted a 20-year study, starting in 1997, on a casino and resort organisation in this region to examine the adoption of information technology. The organisation adopted five systems to facilitate its customer relationship management. Each decision to adopt a new system was influenced by operational needs, the evolution of information technology and the ups and downs of the tourism market.

More importantly, our findings indicated interaction between people and the technology adopted could over time shape or change organisational routines, including procedures, structures, rules, etc. The changes in routine and market environment then lead managers to initiate new business goals, perceive the constraints of the current technology system and adopt new systems. The process continues along with technological advances and business environment changes; and perpetuates.

These days, the management needs to decide on the adoption of new technology, on the update of software and hardware, and on operation adjustments to match these updates.

For them, information technology adoption is no longer a question of yes or no – but one of how and what.

The management must also review and evaluate the impact of older technology on organisational routines and even internal culture. The knowledge of such specific impact will enable it to make more accurate estimates of the long-term effects of new technology on its organisational routines and development. This knowledge will also facilitate the smooth adoption of technology in the long run. Yet, all selection of new technology must also be based on the readiness of people in the organisation, given the crucial impact of the interaction between people and technology on the outcome.

Wang Dan is an assistant professor at the School of Hotel and Tourism Management, The Hong Kong Polytechnic University

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