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Software as a Service Explained - As Only Gary Can

Getting SaaS-y . . . (it’s not what you think!)


In today’s tough economy it’s more important than ever to make it easy for consumers to find you and make a reservation – the way they want, whenever they want - online, telephone, fax or walk-in.  Technology is playing a key role in changing the way businesses manage those consumer interactions.  Some operators are finding that technology can significantly grow their revenue, save them time, or even save their “bacon” as I will describe in an example later in this posting.

As technology evolves, it becomes increasingly important to keep up with the trends or run the risk of becoming disadvantaged from your competition, especially as it relates to how you attract and service your guests.  Increasingly, the hospitality and other travel related industries are looking at the way technology is delivered as an opportunity to free up time, save energy and resources, focus attention on guest satisfaction, and ultimately create a competitive advantage .   It’s really a matter of convenience and making technology work for you, rather than you working for it.

Let me explain the evolution of convenience...
When my mother was growing up, her mother baked birthday cakes for scratch . . . she started with raw ingredients, carefully added just the right amounts of sugar, flour, eggs, butter, flavoring, and mixed them, baked the cake, mixed the frosting, applied the frosting to the cake, and carried out this white blob that tasted really good.  The convenience to her was not having to make the butter or gathering the eggs from the chicken house like her mother had done!  When I was growing up, my mother mixed birthday cakes from Betty Crocker cake mixes, and store bought frosting mixes.!  The convenience to her was not having to measure the flour and sugar before adding milk and eggs and throwing it in the oven.  Thre frosting kits allowed her to be creative and write lovey dovey things on the cake that all young boys roll their eyes at.  The process was faster and more creative.  When my boys were growing up, my wife never baked a cake.  She went to the local grocery store, picked out the perfect cake, and brought the cake came to the party with her!  The convenience to her was not having to get a pan dirty, not having to shop for the mixes and not taking the time to prepare it, cook it or frost it ..... and the cakes were even more creative from professiional bakers.  The only issue she had to deal with was whether the store had a spiderman cake!

Today, there are party services that will custom make your cake and bring the cake to you along with party favors and even entertainment.  The convenience is you pick up the phone and call during business hours, or order online 24 hours a day.  You don’t have to step foot out of your house to plan the party and it is all taken care of for you.  You can even order a spiderman cake!!

The evolution of technology software is not that much different.  Convenience, access and efficiency are influencing how software gets delivered to business owners.  And newer technologies are making it even easier to access the software without making the continued investment in all the parts that make the software run smoothly.  Primarily there are 3 primary models of how software gets delivered to the business owners ; software licensing, application service provider and software as a service.

In the software licensing model, you have to mix all the required ingredients together and manage the outcomes: software, hardware, network connectivity, data, backups, and security are all part of making sure your business is safe and operational.  Oh, and by the way . . .you have to pay annual software maintenance fees if you want to keep your software at the current version so that you can get help if you need it.  In this environment, you pretty much own all the risk of making everything work together harmoniously (like when my grandma baked the cake!).

But why bother with worrying about the cost of managing the hardware and network when you could go to a service provider who takes care of the software for you (or why bother to measure all the ingredients as our mothers did when you can buy the Betty Crocker cake mix!), the Application Service Provider (ASP) houses the software in a data center, but still requires individual management of your copy of the software and configuration (the milk and eggs still have to be added to the cake mix, but you can pay someone else to do it).  And while ASP options provide efficiencies in sharing technical hardware and network resources, they still require individual and customized upgrades.   Additionally, in a multi-property environment, there are still separate installations of software needed for each property.  Many ASP providers are hosting legacy software systems that cannot be easily re-developed without time and expensive resources.  While there are benefits of moving older software to application service providers in order to reduce some of your risk, the opportunity for dramatic software improvement, scalability (or growth) and integration to new systems or opportunities is often limited due to the age of the systems or the technology foundation.

SaaS (Software as a Service) leverages the shared software design, code, database and hardware environments.  SaaS is generally one set of software code and one installation servicing many different customers, each with their controlled access to their piece of data and functionality.  With SaaS there are no installation worries, all upgrades happen automatically with instant access to the latest technology and features.  So, in the “bake the cake” scenario SaaS is similar to ordering the party to come to you  . . . someone else mixed the ingredients AND baked the cake . . . someone else puts on the frosting and designs…… someone else gathers up the party favors and entertainment……and someone else delivers it to you.  All you have to do is pick up the phone or go online and order it!   You don’t have to worry about whether the upgrades will work with your current PC or if you have configured your computing environment to protect your data with virus controls and security access.  All this is done through the total solution provided through the Software as a Service provider!

Additionally, Multi-property operations and management companies are able to manage all their operations through a single sign-on web-based dashboard.  Permissions can be set to access individual properties or groups of properties, and users can be give permission to view just what they need access to, when they need it.  

While some in the industry a using the term “Software as a Service”, they are really offering an ASP.  That means each business is a separate installation on a central server,  and each installation must be managed individually.  Each installation can fall out of date if you don’t pay for upgrades.  Someone has to make sure each installation is protected from a security prospective and each installation is backed up separately.  It’s a lot of work and the opportunity for missed backups, upgrades, security patches and other missed tasks is greater than you think.

On the other hand, Hercules is SaaS, in the true sense of the term.  It is one installation of software that operates each business slightly differently according to system set-ups.  The headache of having to manage multiple software license and service installations is eliminated, and updates to new features are available instantly as they are developed by the software provider.  Also, security management, credit card compliance, data management, and backup management are more reliable because they are handled collectively in one huge installation with redundant copies built in.  Individual operators are give access only to their own set of data and their own software functionality, yet they benefit from the collective advancements of the entire community of users.  Software as a Service has the advantage of embracing web based technologies which, by their nature, create efficiencies in the business.  Business owners can easily access the system from any internet connection in the world, without having to connect to the front office first, or even disconnect the front office while the remote user is granted access.  When one method of internet access becomes unavailable, another access point such as cell phone modem cards or phone dial-up can be used to provide greater availability and redundant connectivity.

Each type software delivery model has unique strengths and weaknesses.  For some operators, the idea of moving to a complete web-based solution is daunting for a variety of reasons, including concerns about internet connectivity and the idea of owning a software license.  For those parks a 2-way integration between locally installed software and Hercules is the ideal solution.  Friend and Campground Master have partnered to offer the industry's first 2-way integration (available this month) – allowing Campground Master customers to keep their locally installed software and synchronize automatically with the Hercules online booking engine and the Friend marketing network.  This makes it easy for campgrounds using locally installed software to increase occupancy by offering 100% of their inventory online to a broader audience, on a first-come first-serve basis, with real-time confirmations, through all booking channels and no concerns about double booking inventory.   

Friend has spent the last two years building the industry’s first web-based hospitality class front office Software as a Service (SaaS) solution - Hercules.  Yet, Friend is also committed to supporting a mixture of solutions such as 2-way integration with front office software providers (such as Campground Master).  Both solutions provide all channels (web, phone, front office) with easily access to the same availability without the fear of double-bookings and unsatisfied guests.  

Utilizing newer technologies to expand access to available inventory (without the risk of double booking) can enhance revenues and free up time from administrative reservation processing.  These benefits have been realized by John and Peggy Croce of Yosemite Pines, who recently made the switch to Hercules, making all reservable inventory available through the front office, their website and web portals, simultaneously. The park reports that year-to-date revenues are up well over $100,000 – largely attributed to a 70% increase year-to-date online bookings.  Whether the consumer books online, calls the front office or arrives without a reservation, all available inventory is now integrated and sold first-come first-serve through all booking channels (front-office, web site and marketplace portals), and the front office staff no longer has to spend time processing and recording online reservations (i.e., significant time savings).  

David Gorin of Holiday Cove RV Resort recently found out just how important Software as a Service can be.  Recently his park experienced a catastrophic computer crash on not 1 but 3 computers, losing everything that wasn’t backed up offsite.  In addition, the off-site backup was not readily available and a local installed software solution would have spelled disaster for the park.  But with the Hercules system (SaaS), a workcamper pulled out their laptop, connected online and the park was back in business – not losing a single reservation or consumer record.  I think David said it best – “Moral of the story:  While you never expect redundant systems to fail simultaneously, they sure can and preparing for the worst case is the best case.  Off site data storage and software makes all the sense in the world.”

The way software is provided is continually changing and operators should be aware of the trends in order to make informed business decisions.  Operators who make traditional decisions because it's "the way they have always done it" can unnecessarily doom themselves to the task of managing the technology, which in many cases is not their core expertise.  In an increasingly competitive world, smart operators are continually looking for ways to reduce unnecessary administration so they can focus on improving the guest experience.

 

 

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