SaaS in Spa Management, Gaming and Leisure Magazine, Fall 2010


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Software as a Service (SaaS) in Spa Management
Gaming & Leisure Magazine
Fall 2010

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SaaS in Spa Management, Gaming and Leisure Magazine, Fall 2010

  2. 2. G A M I N G & L E I S U R E F A L L 2 0 1 0 7 0 2 . 5 4 7 . 4 5 4 558 Two years back, in the Spring 2008 issue, I addressed the topic of achieving a positive return on investment in Spa Technology. The article started: Setting one of the hottest hospitality trends of recent years,spasarebeingdesignedintoalmosteverynew four and five star resort. To maintain competitive positioning and retains market share, established resorts are also adding spas to existing facilities. For most resort properties however, the spa is not expect- ed to be a significant contributor to the bottom line. Rather, the spa is added to compliment their core business of selling rooms or real estate – not as a device to drive new business. Knowing the spa may well be a marginal financial contributor to overall resort operations, considerations must be given to how much they invest in spa technology. As if considerations that a spa’s marginal finan- cial contributions weren’t enough to make an investment difficult to justify, the 2008-9 glob- al recession had magnified the spa owner’s con- cerns about a significant tech investment. Traditional spa IT implementations required a significant investment in hardware, software, databases, implementation assistance, training and additional IT staff. For a typical resort, the up-front investment could range from US$ 25,000 to US$ 50,000 or more. This would provide the resort’s spa with a Spa Booking System, Reception, POS, Inventory, and inte- gration to the PMS. For multi-property, multi-national groups, this would be the expected investment at each spa site whether it be in New York, Hong Kong, Zurich, etc. The cumulative effect would be a rather hefty and prohibitive investment for any multi-property group. In recent years however, SaaS (Software-as-a- Service) has been making its way into various industries. SaaS is a software distribution model in which applications are hosted by a service provider and are available to end-users over a network, typically the Internet. Since the SaaS model provides a hosted solution, the up-front investment is minimal. Typically the only required investments would be inter- net-capable workstation(s) and a small initial payment. Gone is the need to invest in a Server, software, DB engine, backup facilities, etc. “In terms of ROI,” Joel Friedman, Director of Sales and Marketing at Priverus Software states, “we are able to quantify an ROI on Gross Sales of between 10-20% via a specifically targeted client interview process in which the client assigns a value to our various benefits and we calculate the ROI on the cumulative results of this benefits analysis. Upon completion of the analysis we provide the client with a formal report that identifies the benefits, the relative value assigned by the client and the final ROI. “Given that the client provides all their own input and valuations, even we have been sur- prised to see results indicative of an annual return of over $200k on annual sales of $1.5 million with a cost of our software at only about $15k/yr. Its therefore a relatively easy decision for the client to accept spending $15k/yr for our software and add $200k/yr to their bottom line based on the unique benefits our system provides to increase revenue and reduce costs,” Freidman concludes. As many SaaS models charge based on transac- tions fees, it’s a pay-as-you-go investment. Slow periods will result in small IT payments, while busier times will require a higher payment. However, based on a small transactions fee, investment matches ability to pay. Some of the benefits of SaaS: No Investment in a Server. A significant savings alone. The data resides securely on a remote server accessible through the internet. Roger Sholanki, CEO at Book4Time mentions that “there’s a strong ROI for Spas to deploy a SaaS solution compared to traditional software. When our clients implement Book4Time they don’t have to purchase expensive servers, operat- ing systems or hire IT consultants to help deploy the system.” Web-based, accessible from anywhere at any time. In recent months I’ve met with several corporate Spa Directors responsible for spas spanning the globe. Over a late dinner with one near my home in Seminyak, Bali, she pointed out that it’d be ideal if she could call up spa sta- tistics from her iPhone using the restaurant’s WiFi. She’s an American Spa Director based in New Delhi and wanted to access all their spa data wherever she was travelling. In two week timeframe she had plans to be in Bali, Lombok, Bangkok, Katmandu and in New Delhi. Immediately accessible data would be ideal, which a SaaS model provides. Bill Healey SPA WEB-BASED SOFTWARE-AS-A SERVICE MATCHING TECHNOLOGY
  3. 3. 59S U B S C R I B E F R E E A N D Y O U C O U L D W I N $ 1 0 0 0 ! S E E W E B S I T E F O R D E T A I L S . WEB-BASED SOFTWARE-AS-A SERVICE MATCHING TECHNOLOGY Designed to add a new site within minutes. There’s no more need to receive and implement a full DB from a remote site. Log into the SaaS provider, and the new location is soon ready to go. No hardware compatibility issues. Yet anoth- er global spa director had been discussing soft- ware options and how that’d impact current hardware she used. Whereas their corporate directive was for MS-Windows compatible hard- ware throughout, she preferred to use an Apple MacBook. Through a SaaS model, hardware compatibility is no longer an issue. Most hard- ware with internet capability should be compat- ible, whether it be Windows, Linix, Apple Mac, iPhone, Blackberry, etc. Free software updates. No longer a need to take delivery of patches and updates. All soft- ware fixes and upgrades are at the vendor’s site. Traditional upgrade methods have typically become a major event, trying to coordinate upgrades on multiple sites around the world. With SaaS, all updates are immediately useable by each and every site around the world. Reduced cost of support (in many cases it’s built into the transactions fee). Free trial. As there’s no need to invest in hardware or DBs, some SaaS providers will allow a trial period to ensure the technology is a good fit for the spa. Additional IT staff will likely not be required. No long-term commitment. Since a traditional software purchase is often a significant invest- ment, most sites would be committed to it long- term regardless of the benefit achieved. With many SaaS solutions, there are no long-term com- mitments, often with easy termination clauses. I have been familiar with CRM systems using the SaaS model for quite a long time (SalesForce, Zoho, etc). At first I hesitated to put my contact database on a remote site, preferring to maintain it on my notebook computer. I am into my fourth year using a web-based CRM sys- tem.MyrelationshipwiththeSaaSvendorhasoutlasted several notebook computers. I’ve been able to access my data from mobile phones, various internet café’s, restau- rants, clubs, etc. I’ve also accessed my web-based CRM from airport lounges in Bangkok, Singapore, Tokyo, Houston,Detroitandadozenorsootherairportclubs. SaaSisalower-costbusinesstoolprovidingglobalaccess to vital business data. Based in Bali, Bill has been consulting, installing and supporting solutions in the global golf and leisure industry since 1982. He has been involved withover1000systemsinstallationsin40+countries from North America to Africa to Asia & Australia.