How Outrigger Bounced Back With New IT Systems, Business Processes

How an island-based hotelier caught up with the industry, drove out cost and continues to expand globally with IT.

Last year Alan White came back from a run to discover that the digital clock in his house near Honolulu was blinking. An earthquake had hit the island. White, the CIO at

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Outrigger Enterprises Group, hadn't felt a thing. But the city certainly did when the electrical system suffered a 12-hour grid failure.

Outrigger, the largest local hotel operator in the state, had planned for short power failures and full-blown disasters, but the company still found itself unprepared. Its corporate office and 11 local hotels -- totaling some 7,600 rooms -- had generators and plenty of fuel; but Outrigger's vendors, especially datacom carriers, didn't have adequate fuel reserves. Three hours into the blackout, Outrigger's voice and data network failed.

Now the company houses its own mission-critical systems, in addition to using SunGard facilities in Philadelphia and Scottsdale, Ariz., for business continuity operations. Outrigger's central reservations office in Denver boasts a redundant Global Distribution System (GDS) and voice agent systems. And a new enterprise storage area network (SAN) in Hawaii will be mirrored to a facility on the mainland next year.

"We plan a whole lot better now," White says. "What a painful experience."

Outrigger is a company in transition. Long a Hawaiian institution, the company hit the skids after 9/11 when tourism collapsed in the islands. During that slump, Outrigger's IT systems and business processes grew almost as outdated as its namesake canoe. But recently, Outrigger has managed to catch another wave. Today the company is a fast-growing midmarket firm that does 35% of its business outside of the U.S., running 195 companies under its corporate umbrella. IT has been crucial to that turnaround. For Outrigger, technology is part of everything, from managing condo rentals in Thailand to hosting services for business partners.

"Technology is driving hotels," says Henry Harteveldt, an analyst at Forrester Research Inc. "But that means that the IT department is faced with an ever-growing number of challenges. It's probably never been more difficult to be a CIO at a hotel."

Especially in paradise.

"We're a relatively small company in a land of giants," says CEO David Carey. "We've tried to use technology to keep us in the game and even give us an advantage."

And Outrigger has been able to do that, spending only about 2% to 3% of revenue -- about half the industry standard -- on IT. "We run circles around other hotel companies," White says. "IT used to be a pure overhead service. Now we're active business partners. We're a profit center."

This was first published in September 2007

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