Wednesday, 30 January 2008

10 questions to ask a tour operator reservation system supplier

A guest post from Alex Bainbridge of Travel UCD:

Next week in London is the annual Travel Technology Show… Now for us travel technology geeks this is high pressure stuff. Not only do we get to pretend we know something about Sales and marketing (!) - but we have to expose to our friends and competitors what we have been up to for the last 12 months.

I am going to be both exhibiting (Stand A49 TourCMS - don’t miss it!) and talking at a seminar on the Wednesday. (Please come - I might be in a seminar about legacy systems - but I will be talking about the future!)

For me in the last 12 months I have been busy busy busy. The “consulting” side of what I do is undisclosed…. I like remaining a “back room boy” for some of the larger UK travel companies.

Being a “back room boy” I have been involved (indeed project managed!) a number of tour operator reservation system change projects. From experience, these tend to be hell. This is because not only do you have to manage expectations (both positive that the new system will be amazing, but negative because some people’s jobs are no longer necessary) but also get projects delivered on time and on budget.

So if you are going to the show next week and are looking for a new system - here are my top 10 questions to ask a potential system supplier:
  • Are developments to the core system possible to be undertaken by customer request? If you have a need for a particular development - can you request a development?
  • What proportion of your developments are instigated by customers vs the system supplier? - I like to see a share of, say, 50%/50% between developments that the customers want vs those that the system supplier wants. (Remember that the system supplier will want developments that increase potential sales whilst existing customers want developments that help fix their existing business challenges)
  • If you pay for a core system development - how long do you retain competitive advantage? Some suppliers say that if you pay 100% for a development you can “lock out” competitors for 18 months. If you pay 50% of a development cost - you can lock out competitors on the same system for 12 months (Often enough to push a competitor to using a specific development the season behind you)
  • How often are new releases “released”? - If these are too often (for example every couple of months) - what onus is there on you signing off these new releases - or does the system supplier guarantee that your existing business processes will not be impacted by new releases? If this is too often and you have to sign off before this new release is given to you, will the testing time be too onerous?
  • Is the system supplier based on bubble economics? For some system suppliers, new customers (and all their professional service fees) subsidise many of the exiting staff in a company however these staff supply services to existing customers. If a system supplier has a business model based on bubble economics relying on a constant flow of new customers this can be a problem for the long term validity of a company - especially if the market is stagnant or reducing?
  • Where does the money they invest in Research & Development come from? Some UK system suppliers get many of their developments paid for by very large travel companies - however in the UK these companies are busy merging and standardising on their reservation systems. If the company you are considering has been happy taking money from these companies, what happens if these R&D funds dry up?
  • What is the 5 year plan for the system? Frankly, no one will answer this - however it is fun to ask and watch everyone’s faces
  • What is the DNA of the software? Systems that have come from a travel agency background are often no good for tour operators and vice versa
  • What are you average professional service fee day rates? Some UK system suppliers have “offshore” (Sri Lanka etc) project teams. These can often be great value. Some are based in London. They are not such good value.
  • How is your system better than TourCMS that I can get for £50 GBP per month? Yes. Ask them. I dare you (Obviously many systems have greater functionality than TourCMS…. the question is whether that is worth the price difference).
DISCLOSURE - Yes I own a system supplier. No I am not a journalist. This isn’t always an impartial blog. Never mind. Time to move on.

[Read more from Alex's blog - Musings on travel ecommerce - Ed]

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