Managing Computerized Bureaucracy

For three days in October 2007, the computerized reservations system of the MGM Mirage hotel and casino chain was “radically crashing”, making it impossible to manage their more than 15,400 hotel rooms. No guests could check in or out. When an inspector from the American Automobile Association (AAA) could not check-in at the Bellagio the hotel’s five-diamond AAA rating was put at risk: only 113 hotels of the 31,000 hotels across the United States, Canada, Mexico and the Caribbean have this rating. “Heroic” staff saved the day by working more than 12 hours a day and on days off to check guests in and out manually in order to achieve some level of business continuity.

Hotels and restaurants have become increasingly reliant, indeed dependent on their Property Management Systems (PMS). The logical models of such PMS are designed to be aligned with the idealised business models. This alignment is never perfect, and inevitably staff are forced to improvise, to tweak the categorization of input data so that it fits the form required by the system. Both formal and informal bureaucracies emerge. Normally a computerised bureaucracy is highly efficient and effective, however, we cannot know if a situation is ‘normal’ until after its consequences have all played out. Inappropriate bureaucratic actions can be mitigated, but only by giving staff the discretion to countermand any “sillyness”. Unfortunately, the rigidity bureaucracy usually signals the end of discretion.

In his talk Professor Angell talks about how companies can develop formal metaschema that enable them to allow a form of ‘controlled discretion’, matched with various ‘break the glass’ procedures that keep a record of all non-standard actions. These both ensure staff do not act arbitrarily, and present management with a record of beneficial actions that can be integrated into incentive schemes. The talk is illustrated with numerous examples of both good and bad practice.