Active Club Forum: What are the Pro's & Con's of Single Svc Providers

Dear Club Guru,

It's difficult to decide between a single solution and integrated solutions.
No one can tell you which is best for you. There is no one correct answer.

Single service providers usually start by being experts in a particular area. One solution on the market today started as an accounting solution and grew to add a club solutions and so forth. The downside is that the features, usability and ultimately the customers are suffering. The Benefits of a single solution provider: When you purchase a business-wide solution for your company from a Single Service Provider the benefits are:

#1 - You get a one-stop-shop and that may be able to provide you with convenience of one place to go for service and support.

#2 – Pricing may also be competitive

#3 – Integration between multiple departments should be an easy given.

There are 4 immediate downside of purchasing a business-wide solution for your company:

#1 - All your eggs are in one basket and if the service or features are not what you expected and you want to discontinue service, it can be a major expense to transition off the Single Service Provider’s solution.

#2 – Because it is difficult to move from a single service provider to other solutions any cost benefits that you hoped to and may see may not last. Upgrades in service, new product releases, etc. are difficult to negotiate when the Single Service Provider knows the cost of you moving away from them is significant.

#3 - It's difficult to be an expert in all areas of business and provide the best features for all departments. Instead of being able to focus and spend development dollars on powerful features in all departments companies are forced to pick a minimum list of features, delivery dates and support. So you may get a one-stop-shop but many times the feature package and upgrades fall short in features.

Benefits of Multiple Service Providers

#1 – The strength of selecting individual service providers is that you can choose from multiple companies and select the features that best meet your business needs. People who specialize in one area usually become experts in their field. Accounting, Club programs, Shopping carts, websites, POS, Inventory, etc. all have their quirks. Hiring people who are experts in each area (or a few areas) can provide you with the strongest feature set. These features can be big time savers in the long run and are worth considering.

#2 - As the providers know it is easy for you to discontinue service you can often leverage that if you have any service difficulties.

#3 – Pricing negotiations can be leveraged for purchases and service when you have competitive offers on the table. This can be significant as the general rule for software is 80:20. The 80:20 rule is that the purchase price of software is 20 percent of revenue the provider generates from the sale. That leaves 80 percent of the revenue to be generated after the sale with upgrades, service, and price increases.

#4 – If you become unhappy with a provider and need to change providers, switching out a single service is much easier that changing an entire company-wide solution.

Downsides of using Multiple Service Providers

#1 – The largest concern is service. Coordinating service between multiple venders can be a challenge. If you have a vender who is not open to integrate solutions this may cost you some time. However, if you have a provider that is not willing to cooperate, then you can easily discontinue their service and choose someone who will.

It's a tough call as to which option is best for you. One thing I look at is the required length of the contract. If someone wants to lock me in, that concerns me.

Theresa Dorr
Active Club Management - Powerful and Affordable Solutions for Clubs
925-447-CLUB (2582)
www.activeclubmanagement.com
www.acmwineclubsoftware.com
www.wineclubsoftware.net

Edited by Theresa (Wed Sep 12 2007 09:59 AM)