In The Big Chair - Kevin King of Shiji

Kevin King, COO

Founded in 1998, Shiji Information Technology Company provides software solutions and services for the hospitality, food service, retail and entertainment industries.

After 17 years at MICROS, Kevin King has worked as the COO of Shiji since June 2015, focusing on the domestic management and growth of Shiji and overseeing the globalization of the company.

2018 was Shiji’s 20th anniversary and in those two decades the company has grown from its start as a network solutions provider for hotels to now serving more than 60,000 hotels as well as 200,000 restaurants and 400,000 retail outlets. Where do you see Shiji going in the next decade?

A few years ago our chairman Mr. Li reviewed the company and its mission, which was to become an IT platform company for the industries we serve.

We’ve only just started that journey so over the next decade we intend to be executing on that vision much more. We see ourselves as facilitators to globally connect these industries and facilitate IT solutions within the industries.

During your remarks a few weeks ago at Shiji’s annual meeting, you said, “in the past three years the world we play in was affected by both corporate and political changes.” Can you explain what you meant by that?

We’re seeing two very different views as a Chinese company growing globally. From a consumer point of view, the image that China might have had a lack of creative innovation has changed.

Today in the technology space we see a huge acceptance that innovative technology is coming from China. This perception has changed a lot over the recent years.

At a political level there are always challenges to overcome and we’re not immune to those. But what counts in our opinion is that at a consumer level there’s a large acceptance for Chinese technology innovation.

Alibaba invested $486 million in Shiji about a year ago. Tell us more about how you are partnering with Alibaba.

Our partnership with Alibaba is on two levels. Our Shiji retail business is working closely with Alibaba on concepts in new retail. Because of our broad user base and integrations at the retail level, we are able to test innovation ideas and create new ways for people to shop.

Paying with facial recognition, optimizing the shopping experience between online and offline are some of those avenues.

Retail is in the midst of a large reinvention process in China and Alibaba is pioneering in this area, we’re fortunate to work with them on these concepts.

On the hospitality front we’ve been working with Alibaba and the larger domestic and international hotel groups and others to pioneer better guest experience, such as the self check-in kiosks, from building the hardware, developing and managing the software and integrations, to making so many systems work together smoothly so the guest doesn’t even notice it takes huge resources.

All it takes is for one of the many integrations to be slow for the guest to arrive in the room and not be able to open their door, and there goes the guest experience.

Again working with Alibaba’s teams on these issues brings this to a whole new level as they see things totally fresh, and it helps the industry re-think processes from scratch.

That investment from Alibaba fueled two acquisitions for Shiji – SnapShot and StayNTouch. What types of companies might be on your radar for future acquisitions?

We don’t comment on future acquisitions. But our mission is to build platforms that integrate vertically across multiple industries and vertically within industries.

When we see there is a need for technology and there are existing experts who are doing a great job and can add value to our platforms, that’s when we consider acquiring the company.

In most cases we work with them for many years before and if it is a right fit and the conditions are good for both parties we look at it.

How do you decide whether to buy a product or build it yourself?

When we find a need according to our strategy we look at what technologies exist on the market.

This is when we decide if we’re going to partner with an existing provider that makes a great product, or if we will acquire a company that has the technology we need or the potential to deliver that technology or if we need to build it ourselves.

However, there are many factors that come into play; it isn’t a simple checklist.

For example, we had acquired Infrasys many years ago and the system has been working great as a premise-based solution. As cloud technology and services grew and our customers requested a move to more advanced platforms, we rebuilt the entire system into what is now known as Infrasys Cloud.

It wasn’t a case of trying to port over existing technology into a cloud-hosted server environment. We defined and designed the whole system from scratch.

With the team’s experience in food and beverage technology, further investing in new knowledge we built an enterprise level system from the start, which was critical for our customers.

This is a good example of acquiring and building. It’s a lot more complicated than just deciding left or right.

We need systems that can keep up with future evolution while serving the needs of existing companies that have processes in place and thousands of employees globally that need to serve their customers.

You also expanded geographically last year, opening offices in Atlanta and Australia. In what parts of the world do you see opportunities for growth in the coming years?

Last year we focused on building out our sales, support and engineering presence in strategic locations where we have clients and hope to have more.

We need to have local hubs to cover every time zone in order to deliver the service levels we promise.

Shiji started as a service company and that’s part of our DNA. In the very beginning we were a Technology Services company and our offices were established with that in mind.

We already have a lot of work to do across the Americas, Europe, Middle East and Africa, Asia Pacific and China. Our focus now is scaling offices to cater for the demand.

What differentiates Shiji from some of its competitors, such as Sabre, Amadeus and Oracle?

All the companies that you list are actually partners of ours on one or many levels. We’re both similar and different. For some, we cooperate, sell and service their solutions and they too cooperate and sell and service our solutions.

What we’re really working to build is a series of open platform environments where hospitality companies can integrate and seamlessly use the various tools that fit their businesses best.

It’s in our customers’ interest that we work with all the major players in the market.

When companies try to close off their ecosystems and hoard everything within their walled gardens the customers are the ones who suffer the most.

Personalization is something we hear a lot of hospitality companies talking about, but what will it take to really get there? Is the guest data still too fragmented?

Currently one of the major issues for personalization is how the data is managed.

As you say, it is very fragmented. Profile data in many cases is stored in parts within a PMS system, which wasn’t designed to manage guest data in the same way as a CRM is.

The other issue is that it is very hard to understand guest preferences based solely on price, location and hotel category.

Today in the technology space we see a huge acceptance that innovative technology is coming from China. This perception has changed a lot over the recent years.

Kevin King - Shiji

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So on a broader level we also need to break down the data and the preferences into smaller parts so systems can understand what guests like and thus propose more of those options.

Then we have the issue that the same person travels for different reasons and has totally different requirements, which is quite hard to predict.

So fragmentation is an issue, but I don’t think we should try to aim for one huge central system that has all the data neatly stored and usable.

It is utopic to aim for that since we don’t know what new systems will exist and what new data they will produce.

Yet having a core system that integrates will multiple systems and connects the dots is a much more realistic view, meaning the data will remain fragmented in parts, but it will be connected.

Hence why our aim is to connect businesses both vertically and horizontally.

What other challenges do your hospitality customers have and does it vary from one part of the world to another?

What our customers want are systems that are easier to maintain and deploy centrally. This creates a different problem, which is that locally there are different requirements to comply with local laws.

Take privacy for example. A hotel from the same chain in Europe versus China or Japan should be operating from the same system so corporate teams can assist and maintain standards.

Yet privacy regulations are totally different, and we need to help them achieve local compliance while keeping a system that works internationally and can scale with the hotel chain.

Shiji is a member of HTNG, Hospitality Technology Next Generation, a global not-for-profit trade association. What is that group trying to accomplish?

HTNG fosters the development of next-generation technology and solutions for the hospitality industry.

As a not-for-profit association, HTNG is able to bring together hospitality companies and vendors in a collaborative fashion to ensure easy integration of technology systems through defined and certified industry standards and best practices.

Vendors like us and our subsidiaries benefit by developing against a well-defined requirement set that has broad industry support.

Customers benefit by knowing their systems and data are pre-certified to inter-operate which ultimately leads to less bespoke development and support.

With IT becoming more and more important for the industry we want to contribute to having global standards to accelerate the speed at which we can integrate with systems across the industry.

Last last year Marriott announced it had discovered a major breach of Starwood’s guest database. What can hospitality companies do to prevent something like this from happening?

While I will not comment specifically on this one issue, I can say there is no 100% protection today. Hotel companies can, however, limit the risks.

We advise our clients to shift to modern cloud-based systems, because such systems benefit from centralized security teams that focus on keeping the integrity of the system safe.

The differences between China and other markets are substantial, therefore it’s very important that foreign companies not try to force their existing processes of their home countries.

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Many of the older systems were designed at a time when the data was hosted locally on a computer or server within the hotel, then updated to work from remote servers, which in many cases helped.

However, all it takes is someone to forget one machine somewhere and it eventually gets attacked and from there they have access to the whole system.

These legacy systems were designed at a time when the internet didn’t exist, and attacks weren’t as common as they are now.

Today modern systems are designed with that in mind and have multiple security layers in place. So even if one part is compromised it doesn’t give access to all the data and more sensitive data can be secured separately.

Today’s advanced security technologies also need to be employed to further reduce threats.

You’ve been developing biometric check-in kiosks at some hotels in China. Do you see that being deployed more widely in years to come? And what other emerging technologies is Shiji exploring?

According to a recent survey by a large point-of-sale company in the United States, two out of three U.S. shoppers want the option to self-checkout.

Airline customers are already implementing such systems. We believe this will grow and become more integrated cross-industry, provided privacy data is kept secure.

Our pilot programs with Fliggy and Marriott are working well, and we believe such technology can greatly benefit guest experience in hotels as part of an overall guest journey.

Guests will always want faster service, and technology can help achieve that. What we need to ensure is, while we add technology, hotels can use that extra time to take care of guests and increase service on parts that can’t be managed by computers.

Such personal interactions become an opportunity for a true hospitality service engagement.

In retail we’re working on many new technology solutions specifically in China that will help hospitality and travel.

We will introduce these concepts as these move from research to fully formed offerings. In hospitality we’re working on multiple areas from improving distribution systems to facilitating data transfers between systems.

Shiji now owns more than 50 subsidiaries with over 3,000 employees around world. What are the main challenges of leading a company that is so spread out and diverse?

Actually the numbers are slightly more now, we have 70 subsidiaries and 4,000 employees around the world. We’ve grown extremely fast in the last few years, and this poses a lot of challenges.

Some of them are how to best integrate various company cultures and technology without losing what made those companies the success that they became.

It is a long process, and we try to leave as much freedom and responsibility with our subsidiaries as they know their jobs well.

Then it is our job to find the similarities between the subsidiaries and cultures and help them come close together.

What advice do you have for a B2B travel tech brand trying to enter the Chinese market?

My biggest advice would be to work as closely as possible with local partners in a true partnership who can help and where both parties add value.

The differences between China and other markets are substantial, therefore it’s very important that foreign companies not try to force their existing processes of their home countries.

It won’t work. I’ve been working in China for over 30 years and seen many failures, where I have seen successes, success comes from respect and partnership based on a win/win formula.

Shiji adopts this principle with our international subsidiaries by learning rather than dictating.