[Hall of Fame] From Consulting to Forming HTNG

Douglas Rice, executive vice president and CEO of HTNG, will be inducted into the International Hospitality Technology Hall of Fame on Tuesday, June 26 at 8:30 a.m. during the HITEC Keynote Session. He is being honored for his hospitality technology industry influence and his leadership with forming Hotel Technology Next Generation (HTNG).

I have been Fascinated with Technology Since I was a Kid

If you had asked me early in my career what I thought I might be doing today, probably the very last thing I would have said was “running a not-for-profit association serving the hotel technology industry,” much less receiving the top industry award for it.

In fact the only word in that phrase that would have seemed right was “technology.”

Even today, while I’ve spent lots of time in hotels, both as a guest and as a consultant, I have never actually worked for one.

But as for technology, I have been fascinated by it ever since writing my first BASIC program in 1963. Check your history books:  BASIC wasn’t even launched until 1964. I was just in grade school, but my older brother was involved in the development of BASIC, and he took me to the computer center and showed me how to write a program that could add two numbers of my choice and print the result. How cool!

I worked my way through college doing machine language programming for the college computer system, which was the first successful large-scale implementation of time-sharing. The mainframe had two processors, neither of which would hold a candle to the one on my iPhone today – serving an entire college campus, and sometimes as many as 250 concurrent users. I was hooked on technology.

So I had learned the bits and bytes, but over the years, I became less interested in them, and more attuned to how they could be applied to generate business value. I particularly liked the challenges in service industries, where even the best technology will fail if you don’t take into account how human beings will adapt to it, use it, embrace it or resist it.

Bringing Airline Technologies to the Hotel Industry

After business school and a few years in the airline industry, I fell into a job with a small consulting group. We started bringing some airline technology ideas into the hotel industry.  It was a great niche, primarily focused on distribution. But the more I learned about hotels, the more I saw how broken their technology was.

With just a few exceptions, hotels were using technologies that had been cobbled together by small entrepreneurs in the sixties and seventies and eighties, and had never really moved beyond that. Information Technology (more often called EDP in those days – remember that?) was a backwater department, and received little strategic direction, respect, investment or executive level interest.

IT concepts that had become commonplace in other industries were still unheard of in hospitality. Things like enterprise architecture, converged networks, shared infrastructure, structured cabling and open standards drew blank stares in discussions with IT leaders in hospitality.

It was the human issue in spades: Hotels weren’t adapting to technology, using it or embracing it; they were simply resisting it.

Now I was a consultant, so this was a good situation.

There were lots of fees to be charged fixing the problems and showing hotels how to be smarter.

I could have happily lived out my career consulting, but life had other surprises in store for me. I have Mac Smith, VP at of IT at Hilton International during the 90s, to thank for that.

How Brainstorming Over Drinks Changed My Career

I was catching up with Mac over a beer in London in February 2002. By 2002, he was a consultant too, and was helping me on a project for Nick Price, CIO of Mandarin Oriental Hotel Group.

Mac was lamenting the lack of acceptable technology choices for another client of his – a major hotel group searching for core systems, which was prepared to spend many, many millions of dollars. I forget his exact words, but it was basically that “the vendors aren’t building what we need, and they won’t work together to allow us to patch together a solution ourselves.”

I couldn’t have said it better.

I ordered another beer.

But Mac wasn’t finished.  He continued, “HITEC is coming up in a few months. A lot of smart people come to HITEC. Maybe we could try to get a few of them together and try to come up with some ideas to fix it.”

Why not, I thought? And who then walks into the bar but Nick Price.

Mac and I shared the idea with him and he immediately said, “great idea, count me in.”

Over the next few months, we carefully expanded that group of three to its ultimate size of nine. We agreed to meet for two full days, the Saturday and Sunday prior to HITEC. Since HITEC was in my hometown of Chicago in 2002, I offered to host the meeting at my house.

We had no idea where it would lead. But we certainly had the right group of people to figure it out: In the years since, five of the nine (Ted Horner, Jon Inge, John Burns, Nick and I) have been selected for the Hall of Fame.

The First Days of HTNG

Those two days started out as a rather candid gripe session, largely around “why won’t the vendors cooperate?”

It evolved to “there are some pretty fundamental causes on both sides of the table (hotels and vendors), which need to be fixed.”

It moved on to the concept of an association dedicated to fostering cooperation and socialization of new technology, and some things the association could to help fix the problem.

And as the last order of business, we made the choice of yet another unpronounceable and confusing acronym.

HTNG was born.

At the Core of HTNG

The concept was simple.

Our industry needed a meeting place where hotels and technology vendors could cooperate in small groups to solve problems.

Not all problems, just those where cooperation made more sense than competition. And only on the basics of the problems, not the bells and whistles.

The time was right: Hotels were starting to hire CIOs from outside the industry. A new breed of technologists was arriving with broader IT experience, who understood “co-opetition.” Frustration levels were high. Existing associations like HFTP, OpenTravel and HEDNA were filling some industry needs admirably, but they were focused on education and standards and processes, not on building modern technology solutions.

We documented our analysis in a 15-page white paper, which we published the very next day.

We talked it up at HITEC that week, and got lots of great feedback, especially from hotels.

More importantly, we got commitments of support from industry leaders like Jim Yoakum (former Marriott and Choice CIO), Gebhard Rainer (then Hyatt International’s IT VP, now EVP at Hyatt) and Monika Nerger (now CIO at Mandarin Oriental).

The following weekend, I received an e-mail from Mark Hedley (Wyndham CIO) saying basically “I read your white paper on the flight home. You guys absolutely nailed it. How can I help?  So it seemed we had struck a chord.

Even then, it never occurred to me that I might end up running HTNG; it simply didn’t seem possible.

HTNG was a tiny, volunteer-led organization at the time, with no staff and no money. I had a successful consulting practice that supported a comfortable lifestyle. While I was eager to help, I wasn’t in a position to work for nothing, which was all that HTNG could afford to pay.

But the idea of HTNG caught the attention of a lot of the right people in the early months, and started to seem like a movement.

HTNG formed its first workgroup. Technical experts from different hotel and vendor companies got together around a specific problem, and started collaborating to fix it. Even direct competitors like MICROS and Par Springer-Miller could work together, it turned out, as long as it was about a problem that both needed to solve and neither could solve on their own.

Vendor participants started implementing and bringing the results to market. Hotels liked what they saw. A few companies started paying membership dues. And two years after HTNG was formed, HTNG-based solutions were demonstrated at two vendor booths (Microsoft and Springer-Miller) at HITEC, with 15 companies cooperating – and interoperating.

And all of this had come out of an organization led entirely by volunteers.

The momentum was as surprising to me as it was impressive.

Companies were willing to pay to participate in this idea of ours. HTNG started collecting dues. The HTNG board (the founders had turned the organization over to a board of senior hotel IT execs in early 2003) began searching for permanent management in mid-2004.

As an advisor, I sat in on those discussions and could see the board struggling to find options that would both work, and be affordable on HTNG’s meager budget. It occurred to me that I had knowledge and relationships and could probably help get HTNG to the next level, but I had to find a way to get paid. So I approached a few of the key board members who I knew well and said, “Would you consider having my consulting company run HTNG on a contract?” If we could structure the compensation as a commission on membership dues, then HTNG could afford it. And as long as I could keep some core consulting clients until HTNG grew large enough, I could make ends meet personally.

The rest is history; the board brought me on, I’ve been running HTNG for eight years now, the last six as a full-time employee.

After explosive growth in the first couple of years, it’s of course slowed down a bit, but has never stopped growing. In the past six years, we’ve grown from just me to a staff of nine. They do a great job of helping our volunteers be much more productive, meaning more of their expertise can be poured back into the community every year in the form of architecture, open standards, design guidelines and best practices.

Apparently, the idea we had in 2002, however imperfect, met a need.

How the Industry Has Been Impacted

It’s been amazing to be able to work with so many talented, dedicated people, and to see hotels and vendors start to embrace modern technology.

To be sure, it happens in fits and starts, but it’s happening.

Hospitality technology, which hardly moved forward for two decades, is now becoming more robust, reliable, adaptable and cost-effective every year.

Serial interfaces, which faded away in other industries in the 1980s, are finally disappearing from new products in hospitality.

Web services are increasingly the de facto form of interface.

More and more vendors are embracing open standards, and recognizing cost savings on common plumbing requirements, which in turn allow them to pour more R&D funding into developing better core products.

Technology is moving above-property, where it can be managed far more cost-effectively.

Vendors still compete vigorously, but many they have also learned to work together when their common customers need them to.

We envisioned all these things in that two-day meeting, we designed an organization to help and today they are happening. Would they have happened anyway? Yes, but it would have certainly taken longer.

To be sure, as an industry we have a long way still to go, and many vendors still don’t get it. But I look back on the last 10 years with some pride.

An organization that arose from a timely meeting of nine industry visionaries has played a significant facilitating role, providing a framework where talented people can solve difficult problems together and commercialize them – through collaboration, best practices, primary research, open standards development and other means.

Over the years, they have produced about three dozen major standards, implementation guides, best practices and buyers’ guides — each one representing hundreds or thousands of hours of effort by some of the best minds in the business.

All are designed to help hotels make smarter technology choices, and to get vendors to build the right products.

Our members, especially the vendors, get (and deserve) the credit for the solutions that drive our industry forward. They’re the ones who take the business risks that define success or failure.

All HTNG really does is to provide a forum to generate ideas, perform reality checks, obtain thoughtful review, identify and exploit common tools and learn best practices. None of these define success; only products brought to market can do that. But by helping our members to do this faster, cheaper, or with less risk, we lubricate the process.

So I hope that’s at least part of the reason I was selected for the Hall of Fame award this year.

It is, I think, recognition not just of my own role, but of the fact that an entire industry can benefit when people can cooperate on areas of common interest and challenge.

It’s been an incredible privilege to have the opportunity to lead an organization that facilitates that cooperation.

I see the results every day in the market – and sometimes even in the hotel rooms I stay in, which is the best reward of all.

Douglas Rice, executive vice president and CEO of HTNG, will be inducted into the International Hospitality Technology Hall of Fame on Tuesday, June 26 at 8:30 a.m. during the HITEC Keynote Session. He is being honored for his hospitality technology industry influence and his leadership with forming Hotel Technology Next Generation (HTNG).

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