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| The impact of technology today is unparalled and whether at work, home or play, we're all affected by technology, and that most certainly includes the private club industry. |
| However, the fact is many private clubs haven't kept pace with new, more technologically advanced systems and it doesn't matter whether it's finance and administration, sales, pro shops or golf courses. Many clubs are working with technological obsolescence. Why don't they change? Why are high tech information systems important and why do private clubs need to consider improving their technology for the future? |
| It's a clear fact many private clubs are behind the times, and in the opinion of many information technology specialists, clubs, in comparison to small businesses in many other industries, are behind by as much as five years or more in technology. It's a wide-ranging continuum with some clubs very advanced in their automated systems and others barely automated. Why? |
| "In years past, private clubs lagged behind simply because they could," says Bill Boothe, director of club/resort technology consulting, for the West Palm Beach, FL-based company, RSM McGladrey, Inc. |
| "That is, club management was not pushed by competition to use technology for strategic purposes. Clubs could use their traditions, amenities and services to attract and retain members, and a club's reputation for excellence was enough to compete. However, as competition has increased with a glut of new public and semi-private golf facilities, club management is feeling the heat to manage operations with better business intelligence, increased customer relationship management, and cost-cutting technology. |
| "In addition, club members have become more computer-savvy over the years, and their expectations for advanced management information and automated procedures is helping to drive clubs forward to new technologies," he added. |
| Club directors, says Mark Lipsett, CEO of the club management consulting firm, Northstar Technologies, "historically have dismissed technology as a necessary evil rather than a key investment in productivity and revenue enhancement. |
| "This, I think, has happened because technology - by design - is behind the scenes, and generally invisible to a club's membership," Lipsett expounded. |
| "If the 17th green is brown, it is clearly visible, but if the accounting or POS system is deficient, the club simply makes up for it with manpower. Clearly, this is a cost to the club, but not as immediately apparent as the brown green. Interestingly, clubs will incur great expense to hire consultants for redecoration, golf course and redesign, all things that they have some measure of expertise already on staff," Lipsett added. |
| "But when it comes to technology, something about which they typically have no expertise, they will employ no additional assistance, relying instead on the controller of the club. This certainly is no slight on controllers, but most will admit that they have little relevant background, and it is indicative of the board mindset," Lipsett suggested. |
| A club membership is a "powerful component in most decision, and rightfully so," says Scott Freyder, regional director of Crescent Systems 700. |
| "Budgeting decisions…focus on the direct impact on the membership and the long term quality of the club. Improvements in technology are often not perceived as having a direct correlation with improvements in services to the membership or the ability of the club to attract new members. |
| "Boards and managers do recognize that technology can have a positive impact on operations, but it can be difficult to quantify," Freyder opined. |
| As seen in so many of these comments, budget considerations affect club decisions. "So when a choice needs to be made between technology and perhaps a more member visible improvement, such as course maintenance or clubhouse renovations, you can imagine which one is often improved," expressed Brenda Gustin, senior vice president of sales and marketing for ClubSystems Group, Inc. |
| Brian Hall of Integrated Business System, Inc. says "our research…indicates that up to 25 percent to 30 percent of private clubs are still operating in a DOS environment. In my opinion, the number one issue here is complacency; clubs just don't realize the benefits of modernizing their system." |
| Not all club general managers are in agreement with the experts and here's one who speaks with a contrarian voice. |
| "I do not think that clubs are behind the times in technology," explained William Harris, CPA, CCM and General manager of The Country Club of Virginia, Incorporated. |
| "I think that it may seem so from time to time as club managers measure the benefits of advancing technology in their clubs against the expectations of their members and the culture of the club. Generally, clubs are fairly sophisticated behind the scenes in accounting, membership and administration, but take care in rolling out too much automation where it directly impacts the member experience," he said. |
| "Clubs are not necessarily behind the times in technology," adds Carla Jones, "but in general, are failing to harness the power of the information inside the database. |
| "The competitive advantage begins with integrated systems, and once you add technology-savvy staff, you can really begin to provide meaningful information intelligence and analysis to management, owners and board members," added Jones, director of sales operations, Gary Jonas Computing Ltd. |
| "One issue that faces many clubs is member retention. As member demographics change and competition for the discretionary dollar increases, it's critical to understand member profiles, spending habits and other "relationship patterns" that can help identify member dissatisfaction before it results in membership attrition," Jonas contends. |
| And there's agreement from Matthew Kovelan of Club Mark Online. "Clubs are facing an increasingly competitive environment when it comes to attracting and retraining members. This is definitely one area where clubs can benefit from recent technological advances." |
| So as the technology over the years moved away from the DOS based system there was a phrase catching the attention of clubs looking at newer technology: Windows-based. So, what does it mean and is it still relevant today? |
| "That's a very good question, and thanks for asking it!" said Hall of IBS. "To me, "Windows-Based" means that Microsoft industry-standard architecture and data bases are used; this is important because it allows for important reporting tools, and close interaction with Microsoft Office products. From what I have seen, "Windows-based" is merely a catch phrase in many cases; neither the program, nor the database is a Microsoft product - they merely run in Windows." |
| There is some differences in opinion because Kovelan suggests, "Windows-based is becoming less significant in the marketplace. More and more applications services are adhering to standards that allow programs, based on different platforms to communicate with each other more easily. It is more important to know that the applications you invest in have open communications standards, which allow it to easily 'talk' to other applications, regardless if they are Windows-based or not." |
| "Today," says Jones, "it's a catch phrase…that implies an integrated Microsoft technology with an open database, access to everything by anyone - data mining - all that stuff. It's really a misnomer because no matter what platform you are running on, many clubs are only touching the surface when determining how to gain maximum advantage from their systems. |
| "The key idea here is not so much the platform (Windows or otherwise) it's about the integration of your club data and how you use it or don't use it," Jones explained. |
| "What club management needs is a combination of member data, POS sales, and spending habits, captured automatically. The first obstacle is having the skill set or the time to manipulate and analyze the data within the club. Can your windows-based supplier do it for you if the data is in different systems, not available in a timely manner, or is difficult to use? I don't think so…" Jones opined. |
| So if newer, more advanced technology is good, how do private clubs deal with what is generally a difficult and costly decision? How can technological firms make the whole process easier and removes some of "the pain" from the decision? |
| "That's our job, initially," says IBS's Hall. "We use a 'consultants' method. We show them just how a new system can save them money with increased staff efficiency while, most importantly, improving service to their members. After this initial approach, we then assume the role of a dedicated partner." |
| "Change is difficult for anyone," Kovelan suggested. "When change presents itself, you need help to make that change." |
| "The decision to upgrade…is huge, however the actual process of upgrading is not," added ClubSystems' Gustin. "We have implemented many systems to reduce the stress, reduce downtime, and minimize the learning cure for a club to move to our Windows-based software." This means helping clubs secure lending facilities, dealing with conversions programs allowing the migration of data to the new software programs, and working on software features requested by clubs. |
| In Freyder's opinion, working with private clubs requires a 'highly consultative approach" to discover the club's needs and his firm's philosophy focuses on "providing fully integrated software so that the flow of information throughout the club is consistent and in real-time. Mistakes or delays in serving a member can be avoided…having a direct impact on a member's or guest's experience at the club." |
| The improved technology also offers insight into "how service can be improved by tracking things like member preferences that are displayed for the staff at the point of contact with the member, anticipating their needs," Freyder explained. |
| "Management's analysis of data such as membership spending (both highest and lowest spending) can provide valuable insight into members' habits and trends. Incorporating email and mail merge capabilities into the mix will vastly improve timely communication with members in areas like club events and services, increasing member participation," he concluded. |
| "Ultimately clubs are in business to make their members happy, comfortable, satisfied," Northstar's Lipsett explained. "We tackle this issue by providing tools that allow the club to speak directly to each member, one-on-one, through the medium of choice. We also leverage the technology to "Push" information to club users so that they can better address member needs. This is a unique approach based upon the idea that member retention is everything, contrary to the more traditional perspective that members never leave (a thought that has significantly changed over the last two to three years)." |
| But "budgets aside, changing software and vendors is a daunting task," suggests Jones. "However the alternative is that without an integrated club management system you might have an accounting tool, a sales tool, a reservation tool (silos of independent information) - rather than an information warehouse. In addition, working with multiple vendors adds cost while making "problem ownership" cloudy. |
| "It all comes back to business intelligence being utilized through today's technology - solving business issues NOT just keeping the sales or books straight!" she stated decisively. |
| But is it so in all aspects of the private club industry. Most likely and including golf shops. Janine Walter, CEO of Golf Shop Solutions, works with an Internet-based program that provides golf shops with the ability to establish their correct inventory levels, and control inventory, subsequently allowing the shop to become more profitable. This control and information is important not only for profitability and managing spending, but also because it's a tool to control theft and fraud. |
| "It's the only inventory and planning program that is capable of integrating with any POS system," Walter says. "It's done with the click of the mouse, and this integration essentially eliminates a time consuming and error-prone data entry process." |
| However, to GM Harris, "a better end result is the only value in making any change. With technological changes everyone should always understand that they never come easy and always require a lot of long hours and hard work," he suggested. |
| "However, the evolution in business thinking must acknowledge that change is the norm with technology and to succeed you must be willing to evolve with the changes. Modern managers must never think that their work is done. |
| "There will always be the need for another upgrade and we must be willing to do what it takes to move to the next level or step aside for those who are willing," he concluded. |
| Publisher's final thoughts |
| In the broadest sense, technology extends manager's and your staff's abilities to change your club: to cut, shape, or put together materials; to move things from one place to another; to reach farther with our hands, voices, and senses. I believe many clubs today that have not updated their club's technology, their software are missing many opportunities. The systematic upgrading also provides the mechanism to lock in incremental savings over time. |
| Often most difficult challenges to overcome in some clubs is complacency…some members just don't care; they ignore the cost of updating and just making a decision to move forward. It is interesting to me that most members of private clubs are successful business people. They all agree that technology one way or another has helped them in running their business, but at the club, some just don't see the benefits of newer technology. How come the double standard? |
| While I agree the cost of upgrading for some clubs may be the challenge, it's also time for technology suppliers to address this issue. They should be able to provide clubs with a way to have newer technology and benefits today. At least, that's the way I see it! |
| What's your opinion. If you wish to respond to the Publisher's Perspective, or other BoardRoom articles, contact Publisher John G. Fornaro by email at johnf@apcd.com. |
| John Fornaro Publisher |