Management software for marine businesses - part 1

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How to find the right management software for your business.

How is your cash flow looking right now? What was the margin on your last big sale or last month’s billings? How much profit will you make next month?

If your answers are guesstimates or a rough calculation on the back of an envelope then the chances are you’re not currently using any management software in your business. If you are and you still don’t know then maybe it’s time to think about an upgrade.

Today’s management systems are all about giving business operators the most up-to-date and accurate information about what’s going on in their businesses in a way that is easily accessible and understood.

Software to suit all tastes

There are as many flavours of business software as there are types of business. Some programs are designed to fulfil a very specific function and they aim to do it as simply and intuitively as possible. Other programs are more wide-ranging and seek to integrate a number of different tasks.

In that regard, the marine industry is no different to any other. There are programs to help you measure and make templates for boat building as well as tools to assist with designing sails and rigging. There are very powerful CAD tools such as Rhino3D and AutoCAD which are pretty much standard throughout boat design and building. There are programs to manage the manufacturing process and production scheduling. Others help with job estimating and service scheduling. Chances are if there is a job you need doing, there is a piece of code out there waiting to help.

Then there are the business management systems designed to integrate and automate as many back office functions as possible – sales, invoicing, accounts, payroll and rostering, marketing, communications, CRM, parts and inventory… and so on. In the marine industry, there are management systems for different sectors, such as dealers and marinas, which in some cases are adapted from other industries to suit the particularities of the marine industry.

All-conquering Kiwis

Locally there are three main developers for marina management software (MMS) – Pacsoft, Micropower/Marina Focus and StorMan. Interestingly, two of them hail from New Zealand and have grown to become international players. Clever folk those Kiwis.

One of those is Pacsoft, formed in 1989 and based in Auckland where its software is still developed although it now has installations in 20 countries around the world including the USA, Caribbean, UK, Asia and Australia.

Another is StorMan which started in 1992 and, as the name suggests, was originally developed for the self-storage industry before moving into marina management about three years ago.

Ben Williams, international sales manager for StorMan, explained that the software can be adapted for any enterprise that involves renting out something for a period of time for an amount of money – whether it’s a storage facility or a bank safety deposit box or even a marina berth which, at its most basic, is just a storage space for a boat.

The system can be used for a wide range of administration tasks such as reception and front-of-house, utility metering, online reservations, berth rentals and shop sales. It offers the ability for employees to do a dock walk and still stay connected via a mobile platform. Mobile payments via finger sign are also being added. Another new function is sub-letting of marina berths, helping customers to streamline the process and automatically calculate commissions.

Williams says there may be several drivers behind a marina investing in management software but, typically, over the past couple of years marinas have seen tighter financial constraints and are looking to collect payments more easily. For example, they may have arrears of about 14% which they can reduce to 4% by using the software tools such as easy direct debits or customer communication via email and SMS.

“It evens out the cash-flow from month to month,” he commented. “Manually they might be good for a month and then it slackens off even though the bills still have to be paid. Typically they need somebody to focus on an arrears problem.”

Other drivers may be a change of management, new ownership or somebody with specific knowledge of the business leaves and that sparks a need for a change.

“Or they may just wake up one morning and ask themselves ‘How can I do this better?’”

In terms of costs, StorMan uses a monthly subscription model which covers all support and upgrades so it doesn’t require a major investment upfront. Users don’t own the licence or software outright but they do get to keep their own data, and Williams says that StorMan makes it easy to transfer the data if they decide to switch systems at a later date.

Holding all the clubs

The Marina Focus system from Micropower is another package which has been adapted from another industry, in this instance club management having originally been developed to provide back office functions for sporting and community clubs.

In the marine sector it operates in most of the local yachting clubs as well as about 45 marinas including seven sites with d’Albora Marinas.

Chris Gorry, national business solutions manager at Micropower, said a key aspect of Marina Focus is that it is a fully-integrated system that works in real-time, taking just milliseconds to update all parts of the system and eliminating double-handling of data. Core functionality comprises point-of-sale and financials but the whole package includes eight applications. It also integrates with third-party applications which offer greater functionality such as KeyPay payroll software.

According to Gorry, Marina Focus provides a complete management system for the administration of marina berths. This is driven by various graphical views including a customised map view which provides a quick link to all current agreements. The scheduler view shows the availability of berths over a period of time and allows any scheduled absences to be recorded making them available for casual bookings.

Gorry cites the example of a yacht club which spent $100,000 implementing Marina Focus and achieved an ROI of about 18-24 months due to the incremental increases in revenue and reduced administration costs.

Not every marina will be able to afford or need such a system however. Out of, say, 350 marinas it is estimated that only about a third currently have some form of MMS, the rest making do with QuickBooks/MYOB and spreadsheets.

Ultimately it comes down to how big and how busy the marina is – the greater the number of customers and transactions, the more likely it is that some form of MMS will pay dividends.

From bikes to boats

It is a similar story among boat dealers. Anthony Nadalini at Revolution Software Services estimates that only about 20-30% of dealers run dealer management software (DMS). Typically it is only the larger dealerships which will employ such a system. According to Nadalini, if a dealership has 10-15 users across sales, the finance department, a business manager, workshop, service and parts managers, then all these users need to be integrated - and that means looking at some form of management software.

As with the MMS sector, Revolution came to the marine industry via another industry, namely motorbikes.

“Whilst working on an integration project with Yamaha Motors Australia to develop and implement retail process improvements with dealers, Revolution was approached to consider extending its solutions set to marine dealerships,” explained Nadalini.

“What was not clearly understood at the time when agreeing to extend the solution offering to marine dealerships was the scope of change and costs involved to develop the solution for marine dealers.

“The project undertaken by Revolution at the time took over 18 months and an investment of over $1.2 million worth of Revolution’s own cost to provide what is considered these days as the leading marine retail solution catering for all franchises.”

According to Nadalini, the biggest issue with dealership systems is the lack of integration with the manufacturers. In the automotive industry, for instance, manufacturers supply electronic catalogues that integrate with the dealers’ systems. In the marine industry, each manufacturer – both overseas and locally – tends to run their own systems with no standardisation as to what or how information is presented. This makes it much harder to realise the benefits of automation.

“Currently dealers have to employ knowledgeable staff who know all the details of what motor goes with what boat etc. They have to do that because all builders have different standards and, because of that, it’s not possible to apply any smarts to the system.”

Look to the cloud

An alternative software solution for marine businesses who may not want to invest in a full-blown system is the range of cloud-based products, usually US-based, such as BoatCloud and PierVantage.

The benefit of these systems is that, because they are hosted in the ‘cloud’, they don’t require any additional investment in physical systems or software. Typically the users access them via a web browser and just pay for what they use, when they use it. This may prove to be a more cost-effective, flexible solution for small users although they may lack some of the functionality of installed systems.

The other drawback is that cloud-based software relies on having a fast, reliable internet connection, something which is not always guaranteed in Australia. Plus, as Ashley Madison users can attest, keeping your details online may not be the most secure environment.

No substitute for business nous

Ultimately there are always limits as to what any software system can do or achieve. It doesn’t matter how sophisticated a piece of software may be, it is not a panacea for a badly-run business.

Marine operations are often more complex and varied than other service businesses with many different revenue streams and methods of charging. It takes a lot of specialised knowledge and business acumen to manage all these elements successfully and realise their potential. If those business fundamentals are not in place, the smartest software in the world will not fix the problem.

And whatever system is adopted, the most important element will always be the human one. In order to work effectively, all parts of a business – from the senior management through to the shopfloor - must buy-in to what is trying to be achieved and see it through to completion.

This article first appeared in the October-November issue of Marine Business magazine.

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