13th September, 2017
Changing PMS: everything you need to know
With 84.1 percent of Australian accommodation establishments using property management systems as part of their business operation in 2015-6, according to data collected by Australian Bureau of Statistics, many of you are bound to be thinking about switching it up.
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A lot can happen in a couple of years, particularly when it comes to technology. Heck, 2015 was before Apple decided to remove headphone jacks from iPhones, before the exploding Samsung Galaxy Note7 had its moment in the sun, before Facebook Live existed and before wireless charging was a thing. This just goes to show how quickly our tech-centred world progresses.
According to that data-set from ABS, Queensland scored the highest percentage of accommodation establishments using property management systems of any Australian state at 89.6 percent, aside from ACT (93.9 percent). New South Wales marked an even 82 percent, while Victoria came in at 82.6 percent.
There are a myriad of reasons why managers and owner-operators look at changing their PMS. The main one is, of course, the need to keep up with advancing technology. In Australia, a lot of this has come down to internet access and bandwidth capability; as NBN finally starts connecting more regional areas, more and more managers are deciding the time is right to upgrade their tech capabilities, starting with their back-end and PMS. Having the right PMS onsite is the first step to creating a fully functional tech space for guests, which is the endgame for most managers.
I spoke to a property manager at a recent accommodation industry event about what is most important to them when it comes to PMS. I was expecting an answer along the lines of ‘cost-effectiveness’ but actually, they told me that the most important thing for them was ease-of-use. They wanted an interface that they could interact with as easily as they interact with their smartphone.
What intrigued me about that comment was the idea that, all of a sudden, smartphones have become the benchmark for ease-of-use. It makes sense though: a toddler is able to pick up a tablet and learn to use it within minutes. This is the ‘intuitive’ type of interface that separates the good apps from the bad, and it’s what 2017-standard software is built on. If you’re having to Google instructions every few days because of a glitch, or find yourself getting lost in the system that’s supposed to keep your daily operations in order; it’s time for a change.
The great data migration
A few years ago, ‘big data’ was all anyone could talk about. Everyone had huge ideas for what could be done with the reams and reams of data we all suddenly had at our fingertips.
Then everyone seemed to realise that harnessing reams and reams of data is actually quite time-consuming and the chatter died down. Now, the technology has finally caught up enough that you can harness guest data in very helpful ways through your PMS and compatible third-party software. Lots of this, if not all, will even be automated; packaged for you in easy-to-read, actionable reports. This is why it’s so important to make sure that whenever you change PMS, you’ll be able to shift all the data you currently have logged, over to the new system. You’ll also want to make sure that the new system will let you migrate data in the future, otherwise you might find yourself stuck. Data is far too valuable to lose, so make sure you talk this one through with various providers before making a decision.
Hosting onsite or cloud?
This is something that Australian accommodation providers must consider especially, given the vastly uneven quality of accessible internet from region to region. Now that NBN is beginning to reach more remote locales, the issue is perhaps less intense; however, the quality of NBN will also vary region to region so there are still pros and cons to discuss.
Cloud-based systems require a good internet service and offer great ease-of-use, with data managed and stored externally but accessible from any number of devices, usually with a clean and enjoyable interface. They tend to be fast and have a lower initial investment.
The main drawback comes down to data security, as it will always be a risk to store all your data externally. Hacking is a very real threat and in recent years, hackers have targeted the accommodation sector. Another drawback might occur if the external servers are located very remotely; there might be lags. Both of these are things that can easily be discussed with different providers, who will be able to answer any questions you might prepare. It’s always a good idea to ask about data security.
With onsite hosting, security is heightened and internal operations are not reliant on an internet connection, although many of these systems can be integrated with online features. The drawbacks with onsite hosting mainly come down to the much larger maintenance responsibilities, energy consumption and higher purchase cost.
Combined systems that act like hybrid solutions are also available at different price-points.
We contacted a variety of expert suppliers to share their thoughts and recommendations. Check out each spotlight to get an even better sense of your PMS options.
Expert view: Robert Garde, Starfleet Business Solutions
Basically these are the options when it comes to onsite hosting versus cloud hosting:
- Software installed onsite and supplied/supported by a PMS vendor. With this option, the property is responsible for computer equipment onsite and backup of data.
- Software in the cloud supplied/supported by a PMS vendor. Here, the property is still responsible for computer equipment onsite; a good internet connection is required and the cloud service quality is dependent on the PMS provider.
- Watch out for vendors claiming that mobile data connection is not internet data and better. It's actually exactly the same.
- Software in the cloud managed by the property (or their IT person), which is supported by the PMS vendor. Here, the property is still responsible for computer equipment onsite.
- Depending on the cloud provider; excellent performance. We would recommend Amazon (AWS) or Google (GCC). Excellent performance for cost.
- Mixture of data onsite, with it being synchronised to the cloud and available onsite or cloud. Again, here the property is still responsible for computer equipment onsite and a good internet connection is required.
- The main concern would be how long it takes to make sure data onsite and in the cloud is synchronised.
Managers need to be aware of exactly what are they getting for the price (so they need to check this). How good is the product and how well is it supported? If things go pear shaped, is the data available for migration to another system? All PMS systems are different, so what can be transferred and at what cost?
The bigger the property the bigger the support bill (unless, of course, the owners only care about using the cheapest PMS).
When it comes to third-party integration for things like revenue, yield, payments, etc., make sure whatever system you choose is compatible and watch the cost versus the benefits.
Expert view: Kylie Keane, SIHOT
Does the manager employ an IT team member or outside company to maintain computer hardware? If so, then onsite hosting might be the best option. If not, cloud hosting might be the most cost-effective option; let the vendor do all the worrying about air conditioning, window updates and virus scanning.
There are pros and cons for both sides. For example: you are in middle of outback Australia and you don’t have access to computer hardware or an IT company; in this case, cloud hosting might be the best option but the con would be that if the internet goes down, you have no PMS until it comes back on. If your hard drive dies and you don’t have a computer hardware store or IT company nearby, you could be down for days or weeks. Both definitely have their place, if the internet is stable and you have great uptime; cloud hosting takes the upfront expense away from purchasing hardware. If your internet is up-and-down, I think the outlay and reliability to have onsite hosting is the way to go.
Where it relates to pricing, managers should look out for options that best suit their budget needs now and into the future. Also, look out for rental terms whether you’re renting by the month, year, or by three-year contract, so that budgeting can take place. Check if the rental options include free software updates and enhancements, one-off software license and also check what monthly maintenance support fees are involved. Renting allows you to budget and also get the software you need without a massive outlay.
Issues to consider when migrating data
The biggest thing to consider is data cleansing prior to migrating. We have clients that want to bring over five years’ worth of booking history only to find out that half of it is stale or not updated. Other issues will include the inability to extract data from existing systems.
As with anything, the more functionality desired, the more support is required. But do you need 24-hour support or just business hours support? These are the questions that managers really need to ask. If the system is down then you want to get it back up and running as fast as possible and won’t want to wait until 9am on Monday. You also don’t want to be paying for something you will never use. I would recommend starting on business hours and if things change, you should always be able to upgrade a level.
In terms of trust accounting, we recommend that you check the system daily.
Our best tip is to test, test and test. Some third-parties don’t have test environments and say, ‘it works, just plug her in’, in a trust environment this is never a good idea; you would really want to see test cases and be able to run things up in a test environment to verify how everything works. Check with PMS providers that the product has been certified before signing on the dotted line.
Expert view: Justin Owen, REI Master
There are two main considerations when deciding whether you should have cloud or locally installed PMS. The first is, of course, the internet.
How fast is it? How reliable is it? Are you prepared to invest in the necessary infrastructure in order to set up and maintain a redundant internet service?
Secondly, consider any locally bound hardware that interacts with your PMS. You don’t want to rush off to the cloud, only to find business-critical hardware can no longer communicate with your PMS.
Also, a word of warning here about hybrid systems: host your PMS locally or host it in the cloud. Choose one or the other. PMS systems offering a hybrid system are inherently flawed as they need to manage the often difficult task of keeping a local and a cloud database in perfect synchronisation.
The world of IT is changing every second and the pace can be very difficult to keep up with. The only way for a PMS suppler to keep up is constant development, and the only way to do that is to have it funded by a reliable revenue stream.
For this reason, look for a PMS vendor with a subscription-based model. These companies will be able to offer the ongoing development and support needed to keep your business running like a well-oiled machine.
When migrating data from existing software to new PMS platforms, the process can differ slightly depending at what stage you are in your business.
If you are buying an existing business, think about your plans for that business. What are the potential improvements to be made both operationally and to the bottom-line? What does that all mean when it comes time for you to sell?
Changing systems at settlement is the best way to implement your strategy from day one. Quality PMS vendors will be able to programmatically migrate your data from the old PMS supplier with little-to-no downtime and a high degree of accuracy.
For existing operators, you may find your business is being held back by your internal systems, at which the PMS is the core. Don’t wait to do something about it! In preparation for your data migration, make sure you have a full and complete back up of your existing system copied to an external device. Secondly, make sure your whole team understands the benefits and is behind you. And finally, make sure you have thought about all of the third-party connections that your business needs in order to ensure a smooth transition.
There are very few systems on the market that allow a manager to be fully compliant when it comes to trust accounting. Operators with trust accounts need to be extremely vigilant in this area as non-compliance can be a costly and stressful experience.
When evaluating your PMS choices, find out how many customers with trust accounts they service. A PMS vendor with a small number of trust account clients may neither fully understand the relevant legislation, nor have the staff with enough expertise to support and resolve complex compliance support requests. Also, find out if trust accounting is an add-on module or if it was built into the PMS for trust accounting from the ground up. Trust account operators would be wise to steer clear of those with trust accounting as an add-on module; for, just as trust accounting is at the core of their business, the same needs to be true of their chosen PMS vendor.
Businesses with staff also need to consider that the actions of their employees can affect their compliance with the legislation. Business owners should look for a PMS vendor that allows staff activities to be controlled, restricted and monitored wherever trust account transactions are concerned.
A final thought is ongoing education. A good trust accounting PMS provider will provide ongoing and detailed education surrounding compliance and the operation of the PMS system, as well as the latest trends in audit and enforcement.
Expert view: Brad Illich, Newbook
It takes courage to make changes to your business and deciding to switch your property management system is no easy task. There are a lot of factors to consider and it takes a lot of time to research and implement a new solution that is going to be the best fit for your business. You’ll want to be confident you’re making the right decision, so that you only have to go through this process once. Do you join millions of other business owners and move to the cloud or do you stick with a desktop solution? There are many advantages when working in the cloud to consider when making the decision to switch:
If you ever work remotely, moving to the cloud will enable you to work anytime, anywhere on any device. This is very beneficial if there’s an emergency and you’re not in the office, or even if you just want to log in and check reports from time to time to see how your business is tracking. Many software companies invest heavily in security, compliance and protection services to ensure your data is safe, secure and available when you need it.
Cost versus efficiency and accuracy
When you’re researching potential systems, it’s important to compare like-for-like products; otherwise you won’t get a true comparison of the costs and benefits each one provides.
Be careful not to disregard a product that may be more expensive than you’re existing system if it offers more benefits in return. Are you currently completing some of your day-to-day tasks manually? If so, it’s a good idea to put a price on this as time is money. Finding a system that can automate some of your work will save you valuable time, which you can spend on other areas of your business. Automating tasks and processes can also reduce the number of administration errors that are made.
Manage your business online
Using an online platform instead of desktop software gives you more flexibility to broaden your services, whether you’re looking to take direct bookings or use third-party integrations to help with other areas of your business, such as accounting or payroll. Having an online booking engine on your website allows your guests to use your website for everything they need; from finding out about your property to making a booking. Integrating a channel manager with your booking system is a great way of reducing administration as your availability and tariffs are always up to date on every site your property is listed. Integrating an online payment gateway will help streamline your administration processes and ensure payment is received when a guest is making a booking with you, rather than finding out later their credit card declined!
Keep up with industry trends
When you’re working in the cloud, it’s much easier to be innovative and keep up with industry trends. You can adapt and make changes much faster than you can with a desktop solution. Have you ever received a CD in the mail so you can install an update? A cloud software company is able to release new features ready for you to use as soon as you log in, no updates required. This allows you to focus on staying ahead of the competition.
Speaking to others in the industry is a great way to learn about what systems are in the market and the pros and cons of each. Consider what you would like to change about your business and what you think is already working well. Once you have your wish list it is much easier to find the best-suited solution.
Expert view: Sylvia Johnston, HiRUM
Ideally any solution offered should have the ability to run either onsite or be accessed via an external server. This allows for a full range of options for the property manager, along with some great risk management solutions overall. Ideally, a property should not rely solely on a cloud solution, as dependency on the internet should be mitigated at all times. A solution purely cloud-based generally becomes worthless when the internet falls over. While some areas within Australia have incredible internet, others have almost none. Couple this issue with the unpredictable weather that frequents our shores, and the recipe for disaster increases.
As the average lifetime of management rights ownership falls within the two-to-four-year timeframe, the most affordable short-term option for managers is usually to rent their solution. This generally eliminates large monetary outlays for a solution that may only be required for a relatively short period of time. Renting also often includes ongoing software maintenance and upgrades as part of the overall annual fee, affording the manager opportunity to budget accurately. However, the option of purchasing outright should not be dismissed; as renting does come with a drawback...
Data within software is held in a database and without the relevant program in place to open this database, the data itself can’t be reached. A simple example here is a WORD document. We can create a letter in WORD but if the program is no longer on our PC, then we have no ability to open the document we originally created. When business data is involved, it is generally imperative that ongoing access to this information is available and therefore the option to purchase the solution outright should be available. This outright purchase could be financed through a broker and spread over the envisaged length of ownership, resulting in similar monthly payments to any rental agreement.
In terms of migrating data from existing software to new PMS platforms: first, it needs to be determined why a system is being swapped over… If it is simply due to a perceived reduced cost, then second thought should be given here. Many systems may seem cheaper on the surface, but when you look at the hidden costs such as cost per user, cost per mobile device, etc., most systems on the market are quite comparatively priced. Should you change systems, you will need to consider the true costs that will impact your business.
To ensure that a new system is ready to go, staff will need to be fully trained. This can be considerable depending on what system you are moving too. This point cannot be underestimated and often property managers are led to believe that it will simply happen with the flick of a switch.
Database structures also differ considerably and there is no easy way to export and import between solutions. It should be remembered that the look and feel of the data output will differ. Owners often dislike change and receiving a foreign looking income statement without any warning could be unsettling for them. So always ensure every point of contact within your business is aware that change is coming and make plans accordingly.
Support, and its subsequent pricing, varies between systems. From online self-help tutorials, videos and work sheets, to person-to-person engagement via phone or internet, there really are many options available across most products.
What is more important to consider, however, is what level of onboarding and training is offered by the new provider. An onboarding process that takes a customer through the product personally and trains them thoroughly will reduce any frustrations down the track.
Managers need to be aware of what they are required to accurately record and show during an audit, as well as the length of time they need to store these records.
By reading the section of the Act that refers to record keeping for Trust Accounting, and cross-checking these requirements with the information produced by their software, they will certainly be able to keep abreast of any concerns surrounding compliance.
If they subscribe to the relevant organisational bodies for their specific industry, they will become aware of any changes coming. This then allows them to contact their software provider to confirm the software will still allow them to be compliant.
Advice on third-party integration
Integrating with third parties always comes with risks. Having two or more products communicating effortlessly together at all times requires all suppliers to be respectful of each other, in addition to their mutual clients. If one provider makes a change to their product that will impact the seamless communication of the other, without sufficient warning, the client can be left in limbo while the inevitable scramble to make the two ends knit again is undertaken.
Channel Management, OTAs and PMS products are a classic example of this, three providers have to work even harder in this arena as technology is forever evolving.
The risk factor for this is dramatically reduced, the more pieces of the puzzle come from the one supplier, as everything is designed to work seamlessly together. This ensures the best outcome for the customer.
The more elements of the solution that come from different suppliers, the more likely integration issues will occur.