Founded on the Spanish island paradise of Palma de Mallorca in the 1950s, Melia Hotels International is one of Spain’s largest resort operators. Though North American travelers may not recognize its name, it’s one of the top 20 largest hotel chains in the world and operates 370+ hotels in 40 countries on four continents.
ASUG News had the opportunity to speak with Christian Palomino, who’s the Vice President of Global IT for Melia Hotels International, at the 2018 SAPPHIRE NOW and ASUG Annual Conference about the company’s recent move to the cloud.
Digital Transformation in Paradise
Palomino led Melia Hotels International through the first-ever implementation of SAP HANA Enterprise Cloud in Spain. Not only does the hotel operator hold that distinction, Palomino and his team planned this successful migration of 14 production on-premise systems during one weekend, requiring no more than 36 hours of downtime.
We wanted to know how Palomino accomplished this feat and what benefits Melia Hotels International is seeing already after the move to SAP’s cloud infrastructure.
Ann Marie: Why did you decide to make a move from your on-premise systems to the SAP HANA Enterprise Cloud?
Christian: Well, the first reason is that we want to focus on our business, and our business is not technology. We don’t want to manage infrastructure or security. Yet we want to have our infrastructure really well managed, and SAP does that for us. The other reason is because of how we want to handle our expenses. Many of our hotels are not owned by us, they are managed by other owners. We want them to use our core systems, including SAP. Now that’s no longer a capital expense. It’s an operational cost for us and is part of the cost of the hotel, which makes it easier for us to implement our standards.
Ann Marie: I was incredibly impressed by your migration story. What were the critical steps you had to take in advance to make that happen? What kind of processes did you use to be as agile as possible?
Christian: It was a six-and-a-half-month project before that.
Ann Marie: That isn’t very long either.
Christian: We did the migration three times: two fake ones and a real one. The first one was manual, and we took a snapshot of our database. Then we implemented it on the cloud and adjusted everything that needed to be adjusted to work the same way as before. We did that a second time, but that time everything was automated. We scripted everything, and it worked 90 percent, so we made some final adjustments. After taking the second snapshot of our database, we stopped implementing new things in the system and froze our production system.
The third migration was the real one. On Friday at 8 p.m., we shut down the system and took a snapshot of it. We moved it to the SAP HANA Enterprise Cloud. We went through the scripts and at 8 a.m. on Monday, people were starting to do their daily work on our production system. Now here’s a little secret—we explained this to our senior executive team, but we didn’t tell the rest of our staff this was happening.
Ann Marie: Oh, interesting.
Christian: We just told them we had a maintenance weekend planned.
Ann Marie: Just the regular monthly maintenance, right?
Christian: When I arrived Monday, I thought, “Let’s see what happens.” I was waiting for someone to come in and explain that they had problems. On Tuesday, I did the same thing. Then mid-morning I went to the coffee shop and someone stopped me and said, “Christian, have you changed anything in SAP?” I thought, “Oh, okay. Here’s the problem.” I told him, “Yes, you know we did maintenance this weekend.” He said to me, “Well, why does it go so fast now?”
Ann Marie: That’s a really interesting psychological approach. If you tell someone things will change, it can create anxieties that lead to perceived errors. Were there processes that you used internally or any IT methodologies to prepare to go that quickly?
Christian: In terms of development, SAP helped us. We formed a small team with my people, people from SAP, and some people from the business side. They were the only ones who knew what was going on because they did all the testing.
Ann Marie: I see.
Christian: What I think was key for the success of the project is that everybody was working as a team. From the beginning, everybody was focused on the same goal. We took some risks, but SAP reassured our CEO that everyone would be on top of the implementation.
Ann Marie: Transitions like these are the hardest for companies because they can’t afford to disrupt their business. How long did the testing phase take before your team was ready to make the full switch?
Christian: Well, we did two testing phases. The first one took three weeks. The second one took one week. By that point, we knew what to test and it was easier.
Ann Marie: What were the biggest things you learned through those first two tests?
Christian: Taking care of batch processes was probably the most critical thing. Also, when you develop, you build very complex data instructions. You need to be sure that these can adapt to be as fast in HANA as they were in the previous database. When we moved, it was not a HANA to HANA shift, but DB2 to HANA.
Ann Marie: When you were selling this to your senior executive team, did you face any internal concerns about security issues in the cloud?
Christian: We had a lot of conversations around security with the teams at SAP. We wanted to be sure that everything was more secure than it was before, and we knew it would happen because SAP is much better suited to address security issues than we are. We did two things to address security concerns. One was to earn all the certifications SAP has. The second was to make sure SAP’s security processes were aligned with our processes. Security is like a chain where you can break it on the weakest link. We wanted to make sure there was no weak link over there. SAP was really open to explaining how its security worked, and we are really comfortable with the way it’s managing our security.
Ann Marie: What benefits have you seen now that you’ve made this move? How does it help you better serve guests worldwide?
Christian: One very obvious change is that the transactional timing it takes to execute most of our processes has been reduced to 20 percent of what it was before. That’s a huge, huge reduction. That means people can focus on other things than executing transactions. The second one is our new operational approach where SAP is managing our technology investments for us. Now we can focus on providing our senior executive team insights to help them make decisions to manage the company and we can provide exceptional support to our customers through technology. That’s what we like to do on the IT team of Melia Hotels International.
Ann Marie: In terms of insights, does the speed of the data enable those more now? Are you getting new insights to share with the executives that you couldn’t have when you had your old system in place?
Christian: In the past, we had to manage some integrations between other systems and SAP to consolidate this information. Now we are able to use the data in SAP directly, so the information is much more detailed. That allows us to have much better business intelligence.
Ann Marie: What best practices could you share with other SAP customers who are planning to make the move to the cloud?
Christian: The first thing is understanding whether the cloud will work for them, because every company is different. The second is testing, testing, testing. We did it in three iterations. Make sure things are working first, then optimize your systems and do the transition.
Ann Marie: Do you have any plans to move any other systems to the cloud next?
Christian: We’re moving everything to the cloud. We didn’t find any system right now that makes sense to keep on-premise for us. What we can’t move into the cloud right now, we are working so we can move it in the future.
Ann Marie: Thanks so much for sharing your story, Christian.
Want to hear more about this story? Watch a video interview with Christian Palomino and SAP from the 2018 SAPPHIRE NOW and ASUG Annual conference.