ITC HOTELS MANAGEMENT CONTROL SYSTEMS

Roll Number 11215, 11222, 11236,11245,11267

Agenda

Introduction to ITC ITC Hotels

STRATEGIC BUSINESS UNIT ITC FIVE BRANDS OF HOTELS Organizational Structure Communication Performance Management Six sigma control systems Key performance indicators CPM model Balanced Score Card Responsibility centres

Conclusion

Introduction to ITC

ITC is one of India's Indias leading company Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine The ancient Imperial Tobacco Company of India Limited is ITC Limited today ITC posted its face as sector leader in its traditional businesses and spread over more than 60 locations across India

Introduction to ITC

(contd)

Segments
Cigarettes Hotels Paperboards & Specialty Papers Packaging, Agri-Business Packaged Foods & Confectionery Information Technology Branded Apparel Personal Care Stationery Safety Matches and Other FMCG products.

ITC Hotels

STRATEGIC BUSINESS UNIT ITC FIVE BRANDS OF HOTELS

ITC Hotels - Luxury Collection are super deluxe and premium hotels, located at strategic business and leisure locations. ITC-Welcomgroup Sheraton Hotels offer warm, comforting services to the global traveller and a chance to connect. WelcomHotels offer five-star hospitality for the discerning business and leisure traveller. Fortune Hotels offer full service properties all over India, including smaller towns and cities, ideal for the budget traveller. WelcomHeritage brings together a chain of palaces, forts, havelis and resorts that offer a unique experience.

ITC Hotels

ITC Hotels follows a functional organizational structure. This type of structure involves a manager who brings specialized knowledge to bear on decisions related to a specific function, as contrasted with the general-purpose manager who lacks that specialized knowledge. A skilled marketing manager and a skilled production manager are likely to make better decisions in their fields than would a manager responsible for both functions

Organizational Structure

GENERAL MANAGER

F&B MANAGER

EXECUTIVE CHEF

FRONT OFFICE MANAGER

EXECUTIVE HOUSEKEEPER

CHIEF ENGINEER

SALES MANAGER

UNIT FINANACIAL CONTROLLER

HUMAN RESOURCE MANAGER

ASSISTANT F&B MANAGER

SENIOR SOUS CHEF

ASSISTAN FRONT OFFICE MANAGER

ASSISTANT HOUSEKEEPER

ASSISTANT CHIEF ENGINEER

ASSISTANT SALES MANAGER

ASSISTANT FINANCIAL CONTROLLER

ASSISTANT HR MANAGER

F&B EXECUTIVE

JUNIOR SOUS CHEF

FRONT OFFICE EXECUTIVE

HOUSEKEEPING EXECUTIVE

SALES EXECUTIVE

HHR EXECUTIVE

ASSISTANT MASTER CHEF

MANAGER LEARNING SERVICES

Performance Management

Mechanism that improves the likelihood that the organization will implement the strategies successfully Each professional is a cost to company so ROI should be calculated wisely

Time to time Performance appraisal Follows yearly appraisal system JOB KNOWLEDGE SKILLS CO-OPERATION RESPONSIBILITY ATTITUDE TOWARDS WORK INITIATIVE EFFICIENCY ATTENDANCE PUNCTUALITY DISCIPLINE

The various attributes on which they are rated are:

Performance Management(Contd.)

The employee is scored on a likert scale of 1 to 5 Score for each attribute : weight of attribute * score on likert scale Actions are taken and ratings are provided to the concerned employee. It is known as FACTOR RATING METHOD

Six sigma control systems

A separate department has been set up in each of its hotels called the six Sigma Assurance Department. The department comprises of 2 to 3 people and focuses on streamlining hotel processes. Ensure performance by
WOW

ratios Model Areas Process Line Charts

Key performance indicators

Figures are compared with the previous period and analysed

Hotel/rooms

in operation Hotels/rooms under development (pipeline) Occupancy RevPAR(Revenue Per Available Room) Service cost per room

Planning and Budgeting

The following business metrics drive the budget process at ITC:

Revenue Quotas Planned head count company wide Planned headcount by group/dept. Marketing spend Overhead rates Cost budget per dept. Fixed compensation plans Variable compensation plans Research and development investments Bottom Up Top Down

Two Approaches

CPM model

Balanced Score Card

ITC hotels use a three year balanced score card there are five perspectives
Customer

Perspective Internal Processes Perspective Financial Perspective Employee Perspective Social perspective

Responsibility centres

Cost (Expense centers)

Engineered Cost Centres
Housekeeping Laundry Engineering & Maintenance Human Resources, Legal Training, Accounting

Discretionary Cost Centres

Revenue Centre
Rooms department/division Sales/Marketing departments Reservation department

Profit centers
General

Manager /Head of ITC hotels Food and Beverages (F & B) department/manager restaurant kitchen (food production department)

Investment Centre (example)

if

the General Manager of an existing ITC Maurya Sheraton hotel in Delhi oversees the investment decision for expanding the existing hotel or opening a new hotel, and then he becomes an investment center.

Advantages & Problems of Responsibility Centers

Adverse performance identified Morale is high Greater job satisfaction and motivation

Quick reporting of performance

Chance to gain management expertise

Problems Controllability Involvement of Management Loss of ethical behavior

Conclusion

New KPIs

Apart from the existing KPIs, following can be used by ITC Hotels for a better performance management:
F&B Revenue per night Revenue per staff member Expenditure per staff member Debts per room Energy expenditure per night

In addition, the company can give special focus to guest satisfaction, staff efficiency and quality leisure services. Budgeting Improvements

Zero-base budgeting