We outline the capabilities of a fully featured ERP application suite in our article in the Fall 2023 issue of Hospitality Upgrade (Shine a Light on ERP). You’ll also find another great view on the topic by Ron Strecker in this issue. This article will focus not so much the software itself, but the crucial role of the implementation partner.
ERP is unique compared to other software applications we buy for hotels, in that the software might come from one company and the implementation and support services from another. When you buy a property management system (PMS) or a point-of-sale system (POS), training and implementation will almost always come from the vendor that sold you the software.
With ERP, that may or may not be the case. ERP software vendors are typically industry agnostic. They know a little bit about a lot of industries, but not a lot about any specific industry
This class of accounting application vendor will sometimes perform implementations, but they also rely on a network of implementation service providers and value added resellers who will work with the client to install the product and fully deploy the system.
Find a Knowledgeable Partner
We recommend that for a hotel company, the implementation partner’s hospitality-specific expertise is at least as important as the choice of the software itself. Here are a few reasons why we believe a deep knowledge of hotels and hotel accounting are crucial for a successful ERP —or even basic accounting system —implementation:
- The uniform system of accounts for the lodging industry (USALI ) soon to be in its 12th edition, codifies the classification of revenues, expenses, and reporting formats for hotels and other lodging enterprises. The USALI has been broadly adopted by the industry, as it allows comparisons of financial statements across hotel companies. This standardization is valued not only by hotel companies but also by investors, lenders, asset managers, and other essential stakeholders
If the implementor isn’t fluent with USALI requirements, they’ll need to learn them on the fly —at your expense. This will certainly involve some trial and error. Industry icon Bruce Bensetler, founder of Data Plus Hospitality Solutions, has seen implementations by firms from outside hospitality where, “The client ended up with a chart of accounts that wasn’t USALI compliant and couldn’t support their reporting needs.” - Understanding a hotel’s operational and financial rhythms are also crucial to a successful ERP partner. These include working around resource constraints imposed by budget seasons, for hotels typically August – October. Understanding how the structure of one hotel company might lend itself to a simultaneous ‘big bang’ deployment schedule, but another hotel company may require a phased rollout based on segments the hotel company serves and how it organizes its finance function.
Jill Wilder, president of Aptech Computer Systems said, “Flexibility and scalability are key in the hotel industry. Rollout as properties are ready make for a streamlined and successful user experience.” - A good ERP partner will provide a smooth integration to hotel-specific systems and data sources such as PMS, POS, spa and other hotel systems will minimize manual input and errors. If the implementation partner doesn’t already have deep hotel experience, they’ll be developing each of these integrations from scratch on your time, with extended implementation timelines to build each new interface as a one-off.
Gayle Edwards, vice president managing director of PAS (Professional Accounting Solutions), once took over a client from a provider with little hospitality expertise. “The client was amazed that PAS could estimate and deliver enhancements and integrations in a third of the time and cost of the prior company, and without having to be educated on why they wanted an STR integration or what a RevPAR Index was,” she says.
Firms That Can Help
If you accept the premise that hospitality-specific expertise is essential to an ERP implementation, recognize that one way to access that depth of knowledge is not only to buy the software, but also to get implementation and ongoing support from a dedicated hospitality accounting software firm.
Software companies fitting this description are likely familiar to readers of this publication. They include industry stalwarts such as Aptech, M3, Data Plus Hospitality Solutions and others.
Some organizations might want to buy a horizontal ERP system, perhaps because they’re in other lines of business in addition to hotel management. These companies will be best served by choosing the horizontal ERP software best suited for their needs, with implementation services provided by a partner specializing in hospitality.
These implementation partner specialists generally align with a specific software vendor and focus on delivering that software product to hotel companies. Firms in this category include Professional PAS Accounting Solutions, aligned with Infor SUN Systems; Acumen, partnered with Sage Intacct; and Hotel Investor Apps.
Tips to Find a Good Fit
Obviously, there are other combinations of software developers and implementation service providers with the requisite hospitality accounting skills. Here are some tips on identifying them:
- Quiz them on USALI compliance. For example, ask how they intend to support their current hospitality clients through the adoption of USALI 12th Edition in place of the 11th
- Request lists of PMS, POS, spa, golf, RMS, and data source systems (i.e., STR) they have actual integrations in production with
- Check references with hotel companies like yours
- During the pitch, listen carefully for signs that the vendor really knows hotels and hotel accounting, and that those people will be the ones participating in your implementation
Whether you opt for a dedicated hospitality accounting solution or a horizontal application like those mentioned above or Oracle’s NetSuite, Microsoft’s Business Central, or one of the many others on the market, make sure you fully understand who will be delivering the implementation services and the depth of their expertise in hospitality accounting, especially as regards USALI, integrations and the realities of the hotel industry. Choosing otherwise will drive up the project budget and push out the timelines, as a partner without this experience, will have to learn to do all these things for
your project.
