Imagine building a house: you might choose the best foundation from one company, the most efficient heating and cooling system from another, and the most reliable roofing materials from a different provider. By integrating these top-quality components, you create a home that excels in each aspect, rather than settling for a single provider's standardised and fixed package.
This “best-of-breed” approach has been around for several decades in the technology industry. It emerged as an alternative approach to software selection, offering businesses greater flexibility and customisation in building their technology ecosystems. Several global examples stand out as market leaders in their respective categories with this approach.
Take Shopify, which offers a robust core e-commerce system while allowing merchants to customise their online stores with specialised apps and extensions. Netflix also achieved success by building its tech stack using components from multiple vendors, including cloud infrastructure, database management, content, analytics, and recommendation systems. Another shining example could be HubSpot, which boasts an integrated suite of marketing and sales tools, further enhanced by seamless integration with various third-party apps to cater to diverse customer needs.
By choosing specialised technology for each business need (eg., revenue management, guest-facing experiences, restaurant operations, etc.), a best-of-breed approach empowers hoteliers to optimise performance, adapt to changes, and stay ahead in the very competitive landscape of hospitality. Let's explore why this approach has gained such popularity and why it moves innovation forward compared to “single-vendor” solutions.
More agility = reduced risk
When relying on a single vendor for all your business needs, you're putting all your eggs in one basket. While it may seem convenient, it doesn't guarantee excellence in every aspect. If the vendor falls short in any area, it could impact your entire operation. On the other hand, the best-of-breed approach allows you to choose the best solutions for specific department, tasks or processes, minimising the risk and giving you the agility to adjust quickly if something isn't working as expected.
Focus on quality
Initially, adopting a best-of-breed approach might appear too complicated due to the involvement of multiple vendors, each with their unique contracts, bills, support centers and administrative processes. Therefore, hoteliers often try to simplify their operations, decision-making and supplier management as well by dealing with fewer third-party vendors, which may lead to a reduction in complexity. However, this approach comes with the risk of sacrificing quality and missing out on opportunities for improvement and optimisation in various aspects of their business value chain. In other words, by limiting their supplier options, they might miss out on better solutions that could enhance their overall business performance and impact their bottom line. In the short term, all-in-one solutions may seem less complex, but in the long term, the need for more apps arises to adapt to consumer behavior and industry changes, leading to increased complexity in integrations, and subsequent costs.
Flexible & unified tech stack
When executed strategically, organisations can seamlessly integrate all their best-of-breed technologies into a single, unified platform. A tech stack can be built with flexibility to easily switch out individual components - eg. third-party apps - as needed, without the hassle and cost of replacing the entire system, in case you're not satisfied with a particular service or product. For example, you can easily exchange your digital guest journey and booking engine with another app that fits your strategy perfectly, without it having a negative impact on the other applications you already have in place.
‘’Apaleo is at the epicenter of our tech stack. We now feel that we have the freedom to create our own tech stack and practice a lot of trial and error without risking too much, and we really like that.” Arnold Linares, Group Revenue & Distribution Manager, The Zetter Group
Rapid adoption & faster ROI
Best-of-breed solutions are designed with integration in mind, offering robust APIs that enable seamless communication and data exchange between different systems, ultimately reducing implementation time. Additionally, these specialised solutions often come with dedicated implementation teams, who are experts in their specific technology, making the training process easier and more efficient for hotel staff, as the solutions are less complex. In contrast, all-in-one solutions encompass an overwhelming functionalities within a single package and are often tied to the vendor's release cycles for updates and feature releases, potentially leading to longer deployment timelines.
The best-of-breed approach fosters innovation, as specialised vendors focus on their core practices and dedicate their expertise to advancing their solutions. By collaborating with multiple vendors, hotels can explore cutting-edge innovations, such as AI-driven technologies or IoT-enabled smart guest experiences. Embracing a best-of-breed approach gives hotels a competitive edge in the market, as they can respond swiftly to changing guest preferences and industry trends.
To successfully implement a best-of-breed strategy, hotel operators should consider adopting a “must-have vs. nice-to-have” approach before implementing any technology, focusing on the essentials first and then considering additional enhancements. This method ensures a smooth transition to fully adopt a best-of-breed approach.
Among the must-have solutions, a cloud-native, open property management platform takes center stage for seamless hotel operations and adaptability. Combining it with an API-first approach ensures applications are designed around APIs for smooth data synchronisation between technologies. For instance, hotels can offer contactless check-ins by integrating their reservation system's API with a mobile app's API, enabling guests to check-in remotely and access their rooms without visiting the front desk.
The implementation of both must-have and nice-to-have technologies depend on factors such as the overall hotel concept, resources, budget, and guest preferences. So, while these technologies are valuable, their inclusion ultimately depends on how they fit into the overall vision and strategy of hotel operations. Must-have technologies play a crucial role in managing day-to-day operations and ensuring guest satisfaction, such as a channel manager, an internet booking engine (IBE), a revenue management system or a POS system for F&B operations. On the other hand, nice-to-have technologies can be seen as optional enhancements that hotel businesses can consider based on their unique concept and needs (eg. a CRM, an upselling solution, a contactless technology, and a guest feedback & review management system). The definition of must-have applications obviously evolves over time as macro and micro trends influence technology needs, enough to mention the need for self-service check-ins following the pandemic.
As an example, some of the traditional operators began with must-have apps, such as a channel manager, an IBE, a transactional emailing system, a guest app for self-check-in, and door locks. As they progress and embrace the benefits of specialised solutions, they expand their tech stack to include an average of 8 apps after a year. The additional apps often include revenue management systems, instant guest messaging, and housekeeping tools, demonstrating the seamless integration of diverse technologies to optimise operations and enhance the overall guest experience.
“While it would have been great to build our own tech solutions from the start, we decided to de-risk in Hiisi’s early days and put off investing in proprietary technology. We figured that since there are so many hotel tech providers who work on these solutions full-time, we should rely on their expertise for now.” Markus Veikkolainen, Chief Technology and Marketing Officer, Hiisi Homes & Hotels
The best-of-breed approach offers the advantage of adopting a sequenced, test-and-learn strategy when integrating technologies. Unlike the need to connect everything at once, hotel operators can implement specialised solutions one at a time and gradually identify enhancement opportunities as they go. This incremental approach allows for smoother transitions, minimised disruptions, and the ability to fine-tune the technology ecosystem based on real-time feedback and evolving business needs. As an example, the best-of-breed approach made it possible for the Berlin-based LINDEMANN HOTELS to easily set up and trial new solutions, such as customice for MICE management or GiftUp for gift vouchers. All this took just a couple of hours or days because it was no longer necessary to wait weeks for a new integration, an experience that you most often encounter with traditional hotel PMSs, not built with connectivity at heart or APIs as “first-level” citizens of the system.
There are several indicators that suggest a best-of-breed approach might be the perfect fit for your business. Firstly, if your business is experiencing rapid growth and has ambitious goals for future expansion, the scalability offered by this approach can be a game-changer. Secondly, if your business has diverse needs across different departments and functions, adopting the best technology for each area can help you support your teams.
To make the best-of-breed approach truly successful in your organisation, having a product champion for your third-party applications, or ideally for each product category such as revenue-related or guest-facing tools, is vital. These tech-savvy advocates will be the driving force behind embracing the innovative approach, ensuring that the proper training and adoption of each tool takes place. Let’s take the Swiss brand, Tailor Made Hotels as an example: their implementation manager is someone who has basic IT skills and an affinity for new digital topics, but there’s no no need for them to hire a digital expert. Dominik Grossenbacher, co-owner of Tailor Made Hotels believes in cross-departmental transparency and constant information exchange:
"The processes require a different way of thinking. So we got to know our operations all over again and also developed further. The reactions of the team and the hoteliers were characterised by curiosity right from the start. Some were enthusiastic about the modern system, while others needed a somewhat longer period to get used to it because the old processes were still so present. We attach great importance to the hotels and, their owners and directors, exchanging ideas or sharing newly acquired knowledge with each other. We encourage this exchange wherever possible, and after a steep learning curve, everyone was quickly on the same level and gaining new experience every day that helps them further improve their properties."
Ultimately, the decision to embrace a best-of-breed approach should align with your business goals, requirements, and available resources. Conducting a thorough evaluation is essential for a successful implementation that maximises the benefits of this approach.
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