Is the AMS dead? (Part Two)

Association Management Software (AMS) has been around as a specific genre since the 70’s.  In fact, my original company, Resources, Inc., in Chicago, created some of the first commercial software for associations first as something accessible through our service bureau and later as software to be installed on-site in the association’s offices – a new thing given the cost of computers.  They were “mini-computers” defined as something about the size of a refrigerator requiring enough air conditioning to prevent Chernobyl with about the power of a modern-day watch!   The American Academy of Orthopedic Surgeons was one of the first organizations to install this commercial “generic” association management system – though totally generic lasted only until the second client.

Over the years, the technology has changed and has gotten more and more flexible to deal with the many variations in the association world.  These variations are what currently prevents, or at least postpones, the death of the AMS (association management software).   The real question is whether or not the variations and complexity are worth the cost.

Association software is very expensive to purchase, install, and maintain.  If you understand the association software industry you can understand why this absolutely has to be so.  This is a small niche market where customized capability is the norm.  Given how small the market is and how fast the technology is evolving, the cost of creating the software in the first place can barely be made back in software sales.  This is why most association software companies are really services companies rather than software companies.  They make their money on providing the staff to implement, modify, and maintain the software – and that’s expensive.

This is not to say that association software has so specific to the association world.  In fact, if associations really calculated the cost of what they are doing, I suspect more and more of them could move in the direction of a best-of-breed approach unified by a company providing just the integration strategy, software, and support.  Were I to start a new company – and no, this isn’t my current intention – this is the approach I would take.  I would look for the best software to deal with accounting, meeting management, product sales, transcripts, etc. and simply create ways to integrate it all into a unified view centered on the member.  What current vendors call “partner programs” becomes the primary source of software functionality for associations.

What would it take for this to be successful?  The most important thing is that the associations need to be less complex in terms of pricing and discounts.  They will never get away from the idea of member versus non-member pricing and perhaps will never get away from inventive bundles of memberships with meeting registrations and other products.  Then again, perhaps rebates of the member benefit may be a cheaper way to accomplish discounts through pricing and accomplish it outside of the order system itself.  There are lots of possible options to all of the complexity issues if you only think about it and are open to change.

What associations need to do is rethink what a “product” is.  Essentially, a product can be anything with a name, description and price.  Beyond that, why not handle the contents of that product externally to the product sales system itself.  If a customer buys a membership that includes a meeting registration, the integration would be created to interface with the membership system and registration system but the sales system would be simple and independent of the rest.  Yes, there are still issues to be resolved, e.g. restrictions on the number of spaces available at the meeting, but these can be worked around if you think carefully about it.

Much of the complexity – and slowness – of association management order systems results from having to check everything at the time of placing the order.  For instance, the system may have to see if the customer is a member and if so, what kind of member.  Is the product a defined bundle and if so is everything in the bundle available?  Is the product involved in some discount structure whereby if you buy this widget and that widget you get 50% off each?  Should the system optimize price in favor of the customer or in favor of the association.  (I’ve seen both – even in the same association!) If there is a meeting registration involved, the system needs to check to see if there is space in the meeting and potentially space just for a specific type of member.  If there are problems, then the system needs to notify the customer immediately.  There is simply too much complexity just to purchase a “product” and even then, it may not work.

In reality, modern systems are “disconnected” meaning that requests are sent to the database and answers are returned to the customer’s browser and in between requests, one really doesn’t know about the other.  This provides the most efficiency for the central system but also provides a catch-22 in terms of accurately telling the customer whether or not there is space in the meeting.   In truth, between the time the system tells the customer that there is space, someone else may commit that space and the original customer will still be told on committing the order that there isn’t space and their order will fail.  Note that to do this, the system first has to calculate everything to see if there is space and then has to do it all again to commit the order and even then may not succeed in placing the order.

So, let’s go back to the complexity issue.  If the association could simplify the process, it could eliminate the need for the complexity in the software and eventually get to where the “best-of-breed” approach would be well worth while.  Instead of checking for everything real-time, an asynchronous process could make response time almost instantaneous.  Then, for those few situations where a problem exists, the customer can be notified that there was an issue.  Rather than checking for real-time inventory or meeting registration space every time, the assumption could be made that space was available until it wasn’t at which time the product itself would be flagged as unavailable so future checking wouldn’t be necessary.

This has gotten a little long-winded but perhaps you get the point.  A few things to think about:

  1. Association management software is expensive since it has to be to cover all the exceptions and pricing schemes.  Is the complexity necessary?
  2. Association management software is slow because of the complexity.  Should we really inflict that slowness on our valued members?
  3. A generic order system could handle almost anything assuming there was good integration between the order system and the “best-of-breed” components.  Designers just have to think differently.
  4. An asynchronous approach would eliminate time-consuming repetitive and still inaccurate processing and make the integration approach possible.
  5. Simplification of pricing structures would allow “best-of-breed” order systems work.  Being creative could even get past the issue of member versus non-member.

Sounds like an interesting approach to a new company…

Think about it.  What do you think?

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