Editor's note: This article is by Paul Richer, founding partner of Genesys Digital Transformation and industry expert. We first came into contact with Paul when he cited our research report, Making Experiences the Cornerstone of Destination Marketing, in his article "Destination Management Organisations vs. Tour Operators" for the World Travel Market blog in March 2017.
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I have been running my management consultancy, Genesys Digital Transformation, for over 20 years. In that time, I have helped many travel and tourism businesses get new systems. We are all so used to buying technology nowadays - whether it is a new mobile phone, laptop or TV - that we tend to take for granted that making the purchase will give us just what we want.
However, buying a new software system for your business is anything but straightforward.
Booking systems are, by their very nature, complex. The way in which they work is not immediately apparent. When seeing a demonstration of a system, it may appear that it is doing just what you need but until you start using the system in your business, you won’t necessarily find out.
The consequences of buying the wrong system are quite serious. The amount of money you will have paid out to make the purchase is almost by the by. The real concern of implementing the wrong system is actually the business disruption it causes - the inability to process bookings and the effect a poor system has on staff morale.
Let me mention two examples:
A tour operator purchased a system on the basis that the supplier’s salesperson confirmed that the system could handle double-drop charter flights. An example of a double drop flight might be one that departs London, drops some passengers in Paris and then flies onto its final destination, say Milan, to disembark the rest of the passengers. The system cost the tour operator £75,000. It did not do double-drop flights the way the tour operator had imagined. Six months later the system sat in the corner of the office unused.
Another travel company purchased a system that, unfortunately, did not print customer invoices correctly. This created an administrative nightmare, not to mention the cash flow issues that arose from customers not properly paying for their holidays. Such was the high level of business disruption that the Managing Director thought he was having a nervous breakdown as his vision started going very fuzzy. (He found out later that he had actually put his contact lenses in the wrong eyes.)
But that’s not how it has to be. The key is to tackle the project professionally, putting everything you need from a system in writing and asking suppliers to respond in writing as well. Everything is on paper and so there can be no arguments if something is not as requested.
We take our clients through an eight stage process that significantly lowers the risk of a system purchase project going wrong. You can follow this methodology yourself or, if you don’t have the available manpower, ask a consultant to help.
1. You need to understand what the requirements are for a new booking system.
Interview your team members who will be using the system and note everything down. The information gathered allows you to document all the business requirements that the new system needs to handle.
2. Put together a short-list of potential suppliers. Three is a good number.
Based on our experience in the market, we hear good and bad stories about different suppliers so we have excellent market intelligence. If you're doing this by yourself, a good approach is to talk with businesses similar to yours and ask them about their experiences with their software providers.
3. Prepare a written business requirement specification.
In the case of the purchase of a ready-built system, this should stress those requirements that are unusual or important, ensuring there is enough written detail to allow suppliers to properly assess the requirement.
4. Create a formal Request for Proposals document (RFP) based on your business requirement specification.
With our experience, we are able to write into the RFP all the clauses necessary to ensure a thorough and controlled written response from suppliers. If you are doing on your own, think about all the aspects of the project that need to be covered: the supplier’s financial position, how they handle software training, project management and so on.
5. Schedule a demo with your top options.
An important aspect of buying a system is to meet the suppliers and receive demonstrations of their systems. Now that the suppliers have had the chance to read the RFP and understand your business, it is a good time to go and see their systems in action.
6. Develop a scoring system.
Over the years, we have developed a sophisticated multi-level, hierarchical, weighted scoring system. A scoring system allows you to manage your priorities in detail. Buying a new system is inevitably a compromise between various factors, for example, price, usability, meeting business requirements. Using a scoring system is a great way to comparatively assess different systems and choose the one that offers the best set of virtues.
7. Analyse your options.
Once you have scored the suppliers’ RFP responses you may well have a candidate that stands out from the others. If not, further investigation may be required to assess which is the best system for you.
8. Negotiate for a contract that ensures a win-win.
The final stage is to look over your preferred supplier’s contracts, discuss any terms that make you uncomfortable and see whether there is potential for lowering the quoted price.
It is always good to bear in mind that on the one hand, you are buying software which has a low cost of sale. The supplier is not going to have to buy in any raw materials or do any manufacturing. On the other hand, you want a supplier that will be in business for many years to come, so you don’t want one that can be coerced to sell systems at a price that makes it difficult for them to sustain their business.
What I have described above is really the safest way to buy a new online booking system. I have so often been called in as an arbitrator when a system purchase went wrong and the travel company and system supplier are at loggerheads. To avoid this from happening to you, you need to first understand your business’ needs, do your research, contact suppliers, assess your options and make rational decisions.
There really are no shortcuts. Good luck!
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If you're looking for a booking system, it's a great time to request a demo with the TrekkSoft team to talk it through.