Intercontinental Hotel Group has been using SupplierSelect since 2007 to manage RFPs across all the procurement categories that luxury hotels require. In this article, Richard Tan, Director of Procurement Asia Pacific, describes how SupplierSelect helps not only with managing with RFPs and tenders efficiently, but also with achieving the brand consistency that is central to the group's success.
Intercontinental Hotel Group (IHG) is the world's largest Hotel group by number of rooms. It manages over 4,500 hotels and over 650,000 beds. These hotels are grouped by brand - Crowne Plaza, Holiday Inn, Holiday Inn Express and Intercontinental itself. Interestingly, IHG does not own the majority of these hotels - rather they provide a management service. Their strategy is to define strong and compelling brands, and then to ensure that the standards for each brand are adhered by the hotels under management. Central to this strategy is a consistent purchasing policy. This affects every part of a hotel's functioning and goes to a very fine level of detail. Bedlinen, food and beverages, bathroom products - all the things that contribute to a guest's experience must be to the same standard. So when a customer books Crowne Plaza hotels in China, Japan and Australia on an Asia Pacific business trip, the standards encountered in each country must be the same.
To achieve this, IHG publishes detailed buying guidelines for every single product purchased by a hotel. These guidelines are for the benefit of the hotel managers, and describe the standards expected for each product.
IHG's Procurement division is responsible for ensuring both that generic procurement best practises are followed, and that purchasing policies work to enforce brand consistency. Part of best practise means that contracts are put out to tender and are assessed in a fair and unbiased manner via RFPs.
In 2007, Richard Tan, Director of Procurement Asia Pacific, began to wonder whether procurement might not be able to do more to help the broader goals of IHG in reinforcing the groups branding strategy.
"Most purchasing in IHG is done by procurement managers in individual hotels. The role of the central procurement is in large part to support these managers and find ways to help them with their jobs. With the emergence of web based sourcing software and RFP tools, we began to see an opportunity to kill two birds with one stone. Firstly, we could provide the managers with an efficient web based tool for managing RFPs and tenders. Secondly, we could help to reinforce the brand standards by providing RFP templates that had those standards baked in. So in early 2007 we began searching the market for a web based RFP software product that could help us achieve this."
IHG had clear cut requirements for the software solution they needed. To support such a large number of geographically dispersed hotels with no centralized IT function, it was essential that the software was wholly web based, with undemanding client hardware requirements. Since IHG operates globally, the software had to be internationalized, with unicode support for Chinese and Japanese characters. The dissemination (and continual update) of RFP templates was a central objective, so it was important that the solution provided for a library of reusable and re-combinable questionnaire templates. Lastly, given the large number of users in so many countries, the software had to be usable without training.
- Fully web based
- Fully internationalized
- Flexible support for template libraries
"We've used a number of the big eProcurement systems over the years, and many of these had some support for RFx management. But generally the RFx support was a minor feature tucked away in the back of the product, and was generally geared for a price orientated manufacturing RFP. SupplierSelect looked the right solution for us from very early on. It was focused on making RFP management as efficient as possible, and had the flexibility for our unusual business model."
Within a few weeks of contacting SupplierSelect a custom, branded portal was built for IHG, and a Chinese translation was implemented.
"SupplierSelect has been very easy to work with. Managers using it for running their own RFPs need no training, and come to value the system as great way to structure their work. We've now run RFPs for millions of dollars of spend across an unusually wide range of categories - financial RFPs for pension funds, food and beverage RFPs for drinks suppliers, printing services, and even a dedicated Smoked Salmon RFP! One the benefits of the system is that we can now disseminate updates to our procurement guidelines in one click. When the standards for given brand/product combination are changed, we just update the relevant template and we know that these changes will be pushed through in the next purchase."