How Chinese-owned Radisson Hotel Group split US enterprise resource planning

Among the interesting discussions taking place during this year’s annual UKISUG conference was how much SAP customisation is actually needed, and how to move into the SAP cloud. Like many companies, Radisson Hotel Group has been on a journey to migrate from a legacy SAP system to a more modern platform.

But unlike many organisations, the firm has had to deal with significant geopolitical disruption.

The company was forced to sell its US business during Donald Trump’s first term, when the US administration ordered it to cease operations, and in 2022, Choice Hotels International announced it had completed the acquisition of the franchise business, operations and intellectual property of Radisson Hotels Americas from Radisson Hotel Group for approximately $675m.

The company had previously used the time its hotels were closed during the Covid-19 pandemic to refresh its enterprise IT. “During the pandemic, Radisson had closed all its properties,” said Carlos Violero, head of SAP platforms at Radisson. “But it was investing as much as it could to be ready post-pandemic.”

He said everyone was working remotely to update the company’s legacy SAP system.

Then, there was a major setback with the US presidential mandate, which forced Radisson Hotel Group to offload its US operations. However, unlike the sharing of information through a due diligence process, which is required during normal mergers and acquisitions, the US was not allowed to divulge any information with the Chinese-owned hotel business unless it had been approved by the US National Security Agency (NSA).

“One of the main challenges for us was the separation from the US business,” said Violero, adding that the process involved understanding the US setup to build out the Radisson SAP-based enterprise system. 

But access to the US setup was effectively off-limits. “There was a guy in every single meeting from the NSA, who basically listened to us and told the US IT team what they could and could not tell us,” said Violero. “It was like being in a movie. It was a really exciting moment because you were working with someone in the room who is not allowing you to say anything because you work for a Chinese company, and it’s part of the NSA agreement.”

This meant the Radisson team was unable to access the IT environment to discover how it was built, the way it worked and its configuration. These things would have helped the company be better prepared as it separated its US operations. “There was no documentation and no proper information for the discovery phase of the project,” he said, adding that at the start, the IT team was not allowed to run a discovery process at all. “We had to do some kind of re-engineering, and needed to hire a company to work in the middle between us and the US IT team, who we guided to manage the system for us,” added Violero.

“You were telling other people to do the job and everyone was working remotely,” said Violero – but these constraints meant the teams started building everything from scratch.

The enterprise IT environment Radisson Hotel Group inherited from its US operations was based on SAP Hana Enterprise Cloud, which was based in the US. Due to challenges with support and software licence fees, Violero said the company took the decision to use Amazon Web Services rather than SAP Cloud. It chose IT provider Lemongrass to build this new SAP installation.

However, Violero said the company could not run a standard SAP installation. “In terms of business processes, there is nothing out-of-the-box for the hospitality market in SAP, so we are having to use an add-on product that you basically put on top of the S/4Hana system,” he said.

Although the company was not able to migrate its non-standard installation onto SAP Rise, Violero said Radisson Hotel Group is making an assessment about using SAP Business Warehouse and moving this onto Rise. “It’s completely isolated; it’s master data and, as everyone knows, it’s going to be a key factor for AI,” he said.

Violero said that migrating SAP Business Warehouse to Rise can be achieved without major business disruption, and doing so means that from an SAP perspective, the company then has some aspect of SAP Rise running. This potentially provides a way to take advantage of the AI features SAP is bringing to the platform.