Introduction
The purpose of this paper is to analyse Opera Fidelio, which is a software package (system) that facilitates the effective and efficient management of firms in the hospitality industry (Micros Systems, 2015). The system was developed by Micros Systems Incorporated. It is used by over five hundred thousand companies in the world. The success of Opera is attributed to its unique and effective features. In this respect, the analysis will begin with an overview of Micros Systems.
This will include the history, purpose, and market share of the company. The second part of the analysis will focus on Opera Fidelio. It will shed light on the features, benefits, strengths, and weaknesses of the system. The main customers who use the system will also be discussed. Recommendations will also be made to improve the effectiveness of the system.
Micros Systems
History
Micros Systems “was founded in the US by Louis Brown” (Funding Universe, 2015). In 1977, Brown established a firm known as IDEAS, which specialised in designing computers. In the same year, Brown saw an opportunity in manufacturing point-of-sale (POS) terminals. He established a new company referred to as PICOS to manufacture POS terminals for restaurants (Funding Universe, 2015).
The name of the company was changed to Micros Systems in 1978. Micros realised a loss of USD 88,000 and USD 109,000 in 1978 and 1979 respectively. In 1981, the company raised USD 7 million through an initial public offer (IPO). As a result, Brown retained only a 35% stake in Micros through a new firm called IDA (Funding Universe, 2015).
From 1981 to 1990, Micros focused on expanding by joining new foreign markets. It also introduced new software and computer hardware for hotels and restaurants (Micros Systems, 2015). By 1990, Westinghouse Electric was the largest shareholder of Micros since it owned 58% of its shares. Moreover, Micros had established operations in over 40 countries.
Micros entered the property management system (PMS) market in 1993 after acquiring a 15% stake in Fidelio Software, which specialised in developing software for the hospitality industry (Micros Systems, 2015). The company also began to serve casinos in 1993. In 1995, Westinghouse sold all its shares. Consequently, Micros acquired an additional 70% stake in Fidelio. Micros focused on improving its PMS and expanding through acquisitions between 2000 and 2010. However, in 2014, it was acquired by Oracle (Oracle, 2015).
Purpose
The vision of Micros is to be “the world-leading IT company in the hospitality and retail sectors” (Micros Systems, 2015). Its mission is to establish long-term partnerships with customers in order to help them to develop and implement IT strategies that facilitate innovation.
In this respect, the purpose of Micros is to provide IT solutions that improve the competitiveness of their users. The company uses its vast market knowledge and expertise to deliver cloud-based and on-premise property management solutions to its clients. The solutions are designed to streamline operations and enable hotels and restaurants to provide excellent customer service.
Apart from providing PMS, Micros also develops and sells applications that are meant for specific functions. These include business intelligence, customer relationship management (CRM), and inventory management. The applications are usually incorporated in the PMS to enable hotels to use a comprehensive information management system (Micros Systems, 2015). Micros also provides services such as platform implementation, hosting, and interactive marketing.
Micros has embarked on incremental innovation to provide effective solutions. The company has an organisational culture that promotes “innovation by creating a challenging and motivating working environment” (Micros Systems, 2015). It also promotes fairness and openness, which, in turn, encourage ideation and innovation.
Market Share
Micros has the largest market share in the global PMS industry. In particular, it controls nearly 35% of the market in terms of sales (Info-Tech, 2012). This success is attributed to the fact that the company serves most of the large hotel and restaurant chains in the world. Currently, the company serves over 28,000 hotels, whereas its main rival (Agilysys) serves only 16,000 hotels (Info-Tech, 2012). Overall, Opera PMS is used by over 567,000 firms in the global hospitality industry.
The main competitors of Micros include Agilysys, Cenium, Infor, and PAR Springer-Miller. Micros has outperformed these companies in sales due to the superiority of its PMS. Figure 1 shows that Opera Fidelio has all the key features that hotels and restaurants expect in a PMS. However, its competitors lack some of the key features (Info-Tech, 2012).
Opera is also successful because using it is associated with low operating costs. It was designed to satisfy the needs of large and midsize hotels that are interested in scaling up their operations. Thus, Opera reduces both expansion and operating costs.
Competition is expected to intensify in the next decade as more companies join the market. IT companies that specialise in providing enterprise resource planning (ERP) solutions have had to introduce new products such as PMS to increase their revenue (Pucciani & Murphy, 2011). This means that consolidation through acquisitions and mergers is likely to increase as large firms such as SAP join the market. This is likely to reduce the market share of Micros.
Opera Fidelio PMS
Features
Opera Fidelio is a premium PMS that facilitates access to all the tools that employees in a hotel or restaurant need to perform their day-to-day duties. The PMS helps employees to perform tasks such as managing reservations, billing and assigning rooms. Opera PMS is often integrated with several applications in the Opera ERP system to facilitate effective property management (Micros Systems, 2015).
Specifically, it is integrated with “sales and catering; gaming and accounting; and vacation ownership and quality management system” (Micros Systems, 2015). Opera can be used in a single property or several properties that share a common database.
The features of Opera can be classified into four categories, namely, operations, management information system, financial management, and customer relationship management. The operations module include features such as hospitality system interface, Opera express, back-office interface, rooms management, reservations, and front desk (Micros Systems, 2015). Hospitality system interface manages restaurant POS, schedules activities, and monitors electronics such as telephones and entertainment equipment.
Back office interface “collects and transfers data concerning revenue and market statistics among others to a central management system” (Micros Systems, 2015). Room supervision and maintenance activities are handled by the room management system, whereas the reservations feature manages room-booking activities such as tracking deposits, confirmations, and cancellations. The front desk feature allows staff to serve new and in-house guests. It manages guest messages and inter-department advisories.
The financial management module includes cashiering, accounts receivable, commissions, and rate management applications. The activities handled by the “cashiering application include managing advance deposits, bill settlement, and posting guest charges” (Micros Systems, 2015).
It also allows guests to use a variety of payment options, such as credit cards, cash, and cheque (Micros Systems, 2015). Accounts receivable application manages direct billing, bill payments, and invoicing. The commissions paid to partners such as travel agents are calculated and managed by the commissions’ application. Rates management application is responsible for setting room rates, forecasting revenue, and financial analysis.
The management information system produces over 360 reports, which inform key decisions. It also allows managers to configure the PMS by authenticating access to various features and information. Moreover, the application supports global operations through automatic currency conversion and the use of country-specific languages.
The CRM module manages the profiles of guests. It facilitates efficient storage and retrieval of demographic information and transaction records. The records are used to suggest appropriate products to customers to increase sales.
Customers
Opera PMS was designed for the following categories of customers. First, it is used by hotels and restaurants in 180 countries to manage facilities. Some of the main hotel chains that use the system include the RAF Club, Star Lodge Hotel, and Protea Hospitality Group (Micros Systems, 2015). Second, the PMS is used by leisure and entertainment customers. These include stadiums, arenas, theme parks, and concert halls. Opera enables customers in this market segment to manage point-of-sale and reservation activities.
It also facilitates near real-time reporting and inventory management. This enables customers to ensure that they have adequate inventory to satisfy the needs of their customers (Haley, 2012). The PMS also collects data concerning event attendance. The data helps event organisers to forecast sales and understand the needs of their customers. Stadiums and concert halls prefer Opera because it can handle reservations for as many as 100,000 fans effectively. Donbas Arena and RICOH Arena are some of the customers that use Opera.
Benefits
Companies that use Opera PMS enjoy several benefits. To begin with, the system can be configured to suit the operational needs of every hotel. The features of the PMS can be modified to allow the end-user to achieve the desired performance outcomes (Micros Systems, 2015). Moreover, it can accommodate planned and ad-hoc technological changes. This means that the customer is not required to invest in new expensive hardware regularly to use the system.
Opera also allows hotels to achieve their expansion plans in a seamless and cost-effective manner. The system can be scaled up or down to suit hotels of different sizes. Opera provides applications that are suitable for small, midsize, and large hotels. In this respect, small hotels that have limited budgets can acquire and use the system profitably.
Midsize hotels, on the other hand, benefit from the system’s ability to accommodate rapid expansion (Info-Tech, 2012). In this case, scalability eliminates the costs associated with acquiring a new PMS to manage newly established subsidiaries or operating units.
Opera enables its users to improve their professionalism, productivity, and profitability. The system streamlines operations by automating routine activities such as reserving rooms. This eliminates the cost of employing a large number of workers. Using the system is also cost-effective since it reduces training needs and expensive software updates. Cost reductions enable hotels to increase their profit margins.
Users of the PMS also benefit from accurate management information that can be accessed in near real-time. The reports generated by the system allow managers to identify the strengths and weaknesses of their companies in time (Haley, 2012). As a result, managers are able to take timely measures to improve the competitiveness of their hotels.
Strengths
First, Opera has a strong brand image in the hospitality industry. Hotels often choose property management systems by considering what their competitors use (Pucciani & Murphy, 2011). Thus, Opera has always been the choice of incumbents and new entrants because of its popularity.
Second, “Opera allows customers to create user groups to determine unique feature access for different end-users” (Info-Tech, 2012). This ensures customer satisfaction by enabling users to learn about the features of the PMS easily.
Third, Opera was developed using advanced technologies to ensure its effectiveness. Partnerships with companies such as Oracle have helped Micros to improve Opera tremendously. Finally, using Opera is easy due to its low complexity. Moreover, Micros has established service hubs in various markets where customers can access technical support.
Weaknesses
One of the main weaknesses of Opera is the difficulty of integrating it with third-party applications. Customers find it difficult to use the PMS with third-party analytics software due to incompatibility (Info-Tech, 2012). This reduces the attractiveness of the system. The initial cost of acquiring the PMS is also very high. Thus, only companies that are ready to make a significant investment in IT can afford Opera.
Opera PMS also faces technical challenges. This includes system overload, which often delays activities such as booking rooms and billing (Pucciani & Murphy, 2011). Customers have also complained about the system’s poor data security features.
Recommendation
Micros can improve the competitiveness of Opera by considering the following recommendations. First, it should focus on improving the features of the system using advanced software technologies. Specifically, it should enhance the compatibility of the PMS with third-party software packages.
For instance, users should be able to export data from Opera to third-party analytics software easily. Moreover, data security features should be improved to secure users’ information (Haley, 2012). These improvements will enable Opera to overcome competition from substitutes.
Second, Micros should focus on reducing the cost of developing PMS. This will reduce the cost of acquiring the system. As more companies join the market, the price will be one of the important factors that users will consider when purchasing a PMS (Info-Tech, 2012). A low-cost PMS is likely to have high demand since hotels and restaurants are always interested in reducing their operating costs.
Third, new features should be added to the PMS continuously to address emerging market needs. For instance, features that can facilitate effective management of properties in industries such as real estate and retail can be included in the system. Introducing new features will increase the number of customers who can use the system. This will increase sales and profits.
Conclusion
Opera Fidelio is one of the best property management systems in the world. Its features are tailor-made for the hospitality industry. The system has features that can effectively perform routine activities such as reserving rooms, bookkeeping, customer relationship management, and inventory management. It also generates management reports that managers use to evaluate the performance of their hotels.
Opera allows its users to reduce their operating costs by streamlining operations. It also enables hotels to improve the quality of their services. Nevertheless, acquiring the system is expensive. Moreover, integrating it with third-party software is difficult. Micros should address these challenges to improve the competitiveness of Opera
Appendix
References
Funding Universe. 2015. Micros Systems history. Web.
Haley, M. (2012). Property management systems for the entire hotel company. Boston, MA: Prism Partnership.
Info-Tech. (2012). Vendor landscape: Hotel property management systems. London, England: Info-Tech Research Group.
Micros Systems. (2015). Opera property management system. Web.
Oracle. 2014. Oracle buys Micros Systems. Web.
Pucciani, K., & Murphy, H. (2011). An investigation of data management and property management systems in hotels. Tourism and Hospitality Management, 17(1), 101-114.