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New Article Posted – No AMS Ever Failed on Selection
16 June 2011, by , in Data Management, 34 comments

I’ve posted a new article on my website.

There is a classic management aphorism that no strategy ever failed on design; it’s the implementation that counts. The same is very true for selecting a new association management system. No database ever failed on selection; if it fails, it usually fails because of poor implementation.

During the implementation process, there are five key areas where the project can come off the rails. Click here to read the rest of the article.

Of course, if you’re already on my announcements list, you would have received notice of this new article right in your email box. Not signed up yet? Click here to sign up.

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34 Comments on "New Article Posted – No AMS Ever Failed on Selection"

Mark Streger - 16 June 2011 Reply

I disagree. Too many AMS selections are driven by consultants using boiler plate questions. They should be focused on asking the vendor to demonstrate essential business scenarios rather then asking about features and tweaks.

Wes Trochlil - 16 June 2011 Reply

Mark, you're right. But I don't think that makes my original contention incorrect. As I noted in the article, it's possible to select the wrong system, but far more often, a decent system is selected but the implementation is executed poorly.

Steve Lavin - 2 July 2011 Reply

Our association is using salesforce and we couldn't be happier. Give it three years and Salesforce will own the market. Salesforce will not tolerate consultants. They also will force a lot of junior varsity AMS companies out of business, which most of them are, if not all.

Wes Trochlil - 3 July 2011 Reply

Steve, there are four sentences in your comment, and three of them are incorrect. Salesforce will NOT own this market in three years. Salesforce DOES tolerate consultants (as demonstrated by their own website). And most of the vendors in the AMS space are NOT junior varsity companies (unless you consider companies with tens of millions of dollars in annual revenue to be junior varsity). But other than that, your post is great. Thanks for commenting.

Steve Lavin - 3 July 2011 Reply

Wes, it appears you dread and fear Salesforce? I guess you doubt they are capable?

Wes Trochlil - 3 July 2011 Reply

Fear and dread? To the contrary, I welcome SF to this market. The more the merrier. As an example, NimbleUser is developing AMS parts for Salesforce and from what I've seen they look pretty slick. But you're simply wrong about them dominating the market and claiming the other AMS vendors are junior varsity players. There is nothing SF (or any other of the AMS vendors, for that matter) is doing that will cause them to dominate this market. Will they gain more share? Quite likely. But dominate? I doubt it.

Steve Lavin - 3 July 2011 Reply

Wes, we all realize consulants want more vendors in the market. Unfortunately, the last time we hired a consultant, we ended up upgrading (paying more) for a less improved version of what we already had. I find it interesting how you don't list Salesforce as one of your AMS vendors?http://effectivedatabase.com/AMS-vendors

Wes Trochlil - 3 July 2011 Reply

Steve, more vendors means more competition, and more competition means better products for my clients. I welcome Salesforce because their product will push the other vendors to improve. That's what a free market does. As for SF not being listed on my AMS list, that's simple. SF, like Microsoft CRM, Zoho, Infusion, and many, many other CRM products, is NOT an AMS. SF comes with no inherent membership management capability; that has to be added. The same goes for committee management, events, exhibits, and so on. Several vendors have built AMS functionality on top of MSCRM and SF, but out of the box, these products are NOT association management systems. As for your consultant, what can I tell you? My clients love me: http://effectivedatabase.com/success-stories

Steve Lavin - 3 July 2011 Reply

Not necessarily. There are too many vendors because nobody puts anybody out business in this space. There is little, if any at all VC money, so no AMS company does anything revolutionary. Not one AMS company has proven they can get to 50 mil in revenue. CDC does more but that has nothing to do with gomembers. Saleforce is the medicine we patients need.

Wes Trochlil - 3 July 2011 Reply

Steve, I'm no longer following your point. What evidence do you have that a larger company would be more "revolutionary"? What would be revolutionary for this market? For that matter, what evidence do you have that this market can support companies as large as Salesforce? How does getting to 50 million in revenue prove anything?

Steve Lavin - 3 July 2011 Reply

Well, Wes, you are convinced most AMS vendors are not junior varsity companies. Let me ask you, how come no AMS vendor is relevant in the fundraising space? It's because of a company called Blackbaud! Revolutionary for the association market would be a vendor that understands and has the infrastructure to offer a SaaS (Software as as Service) product that can compete with a custom solution. There are way too many AMS SaaS vendors that either don't understand Saas or don'thave the wherewithal to enhance their product. Trust me, our association evaluated them and it was potato versus potatoe. Have your clients put them through a rigorous evaluation before moving forward. If not, they will not be happy. Not of them can do what they claim they can do.

Wes Trochlil - 3 July 2011 Reply

Steve, I don't see how Blackbaud's alleged dominance of the fundraising space proves anything about the success of AMS companies. In fact, if the AMS space is as ripe for domination as you suggest, why hasn't Blackbaud taken over? As for evaluating AMS vendors, I'm not sure when you last evaluated or who you evaluated, but I can state categorically that my clients have been quite happy with the selections they made. One should always be careful about generalizing from a specific.

Steve Lavin - 4 July 2011 Reply

So Wes, just to be clear, are you saying every client listed on your website is happy with their current AMS ? Are you just implying every association that hired you for AMS selection is happy? I'd like to hear your response.

Wes Trochlil - 4 July 2011 Reply

My clients are very happy with my help. Most often they are very happy with their choice of AMSes, as well. Nothing's perfect in this world, so I'm sure some are less happy than others. Steve, my sense is that you had a particularly bad experience with a consultant and your old AMS, and now that you've found happiness with Salesforce, you believe it's the answer to all associations' problems. I disagree. There are no perfect solutions for all associations (and if there were, I'd own that company).

Steve Lavin - 4 July 2011 Reply

Actually an association would be remiss if they didn't evaluatue Salesforce and Sharepoint as their next application. Saleforce gives 501C3's 10 free licenses and is a robust application. Not to mention, gets better each and every month. Sharepoint can do whatever you need it to do. Most powerful front-end, application, and back-end on the market. Name one association that has left salesforce and sharepoint for an AMS company? You will not find one.

Kevin Hallihan - 8 July 2011 Reply

Wes, I have to disagree with you. You have to remember a company by the name of ARC Solutions?

Wes Trochlil - 8 July 2011 Reply

Ha! Good point, Kevin. Perhaps I should rename the article "No AMS ever failed on selection (although you AMS company might!" ARC was the first AMS company in over 20 years to go bankrupt, so in the broad scheme of things, bankruptcy is far less likely to cause an AMS implementation to fail than poor execution.

Lee - 13 August 2011 Reply

Wes, you also don't list Community Force ? They are gaining traction and do have inherent membership capabilities.

Wes Trochlil - 13 August 2011 Reply

Lee, not sure how this comment is relevant here, but I'm looking into CommunityForce. When I checked them out a couple of years ago there wasn't much there.

Andrew Ryan - 13 August 2011 Reply

Steve, The problem with SalesForce is that at it's core, they are a CRM platform. And at the end of the day, an AMS is an Order Processing System. It's terribly difficult to try and turn a CRM - even one as powerful as SalesForce - into an Order Processing System. If any outside company was positioned to enter this space it would be NetSuite - the reason why they've been a SalesForce alternative for some time now is that they address the ideas of order processing and financials. The second reason why SalesForce won't dominate ( or really enter) this market is that this market is too small, and too idiosyncratic. Do you know what SalesForce would have to do to its software in order to match the functionality of any major AMS player? It would be a drastic software change. And what would the payoff be? 100-seat deals? 150 seat, max? (they’d partner with someone to do implementation, like they do now). Ask yourself – why would SFDC twist themselves into a pretzel to service the association market, where the largest deal size is in the 150-seat territory, when they regularly sell into businesses with 5,000 seats? And to your point – MemberSuite is a 100% SaaS AMS that has advanced enterprise features and the ability to customize!

    Sigmund VanDamme - 15 August 2011 Reply

    Andrew, I think you are correct that Salesforce.com itself will never enter the AMS market place. Neither will Microsoft, Netsute or Oracle. The market is too small; the top AMS company has gross revenue of 36M. Salesforce spent 99M on R&D last year alone and has a market cap of 18B+. That being said, AMS specialists like NimbleUser are using the Salesforce platform tools (Force.com, APEX, Visual force, etc) provided by Salesforce to add AMS functionality to Salesforce. The organization then gets all of the power of Salesforce (Workflow, chatter, mobile, force.com, etc) and the backing of a billion dollar company that is pouring dollars and resources into the product / platform. Similarly Protech and Cobalt are successfully doing the same thing with Microsoft CRM. I highly respect what you did at Polaris and now with MemberSuite but as powerhouse, industrial strength players like Salesforce, Microsoft and Netsuite open up their platforms, each of the traditional AMS systems will face a competitive feature set that will be hard to match. I think there is a little secret that nobody really talks about but everybody knows and that is that all of the major players (TMA, Avectra, Aptify, etc.), mid tier players (Membersuite, YourMembership.com, etc) and even some of the smaller vendors (Wild Apricot, i4a, etc) do a great job as an AMS. Each of these systems will bill dues, register people for events, create reports, etc. While these firms sometimes use very different approaches (say cloud vs on-premise) the end result is the same (I.e. dues are billed, people are registered). I would love to tell you that NimbleUser's event registration is better than the other players out there but it is likely similar in features/functionality. I see Salesforce as offering true differentiation that others cannot match. For example Salesforce has an App store with thousands of applications, full mobile support, Chatter, Integrated financials with Financial Force, 2 million users, Dashboards and even a 'Salesforce for Dummies Book'. I could go on but the point is by using a established CRM with AMS features it really opens up the possibilities for an organization to do so much more than just the traditional AMS chores. Great article Wes - regardless of the software the really key is the quality of the implementation. Also - great comments from all above. -Sig

Dan - 14 August 2011 Reply

Andrew they have over 10,000 not for profits clients. Can all these people be wrong? Are they just selecting Saleforce for the 10 free licenses?

Krysta Harden - 18 August 2011 Reply

Andrew, if this market so "idiosyncratic" then why are investing so much time with an off the shelf solution? Why didn't Avectra just stick with their enetrprise product ?

Randy Johnson - 22 August 2011 Reply

Andrew, Salesforce average size deal is 21k. They are not going to try to emulate Aptify, TMA, or Avectra Enterprise. They are going to chase the market that is most underserved: 11-50 staff size. These associations have been paying for custom solutions by default. If any company can instill confidence with an association of this size it will be Salesforce. This link confirms the deal their deal size: http://techcrunch.com/2011/08/18/salesforce-posts-record-quarterly-revenue-of-546m-raises-guidance/

Andrew Ryan - 24 August 2011 Reply

OK,to each of your points: Sig: I agree with you on principle. But what you're arguing is that ALL THINGS BEING EQUAL, that there are features of the SalesForce offering that will be hard to compete with. The problem is that all things will never be equal - SalesForce will never be able to address someone with the needs that iMIS/TMA/Avectra etc address. And not because they can’t modify their platform, but because the cost to do it doesn’t make sense for them. They’d rather follow an ecosystem strategy, and let other vendors target niche markets with their platform. For a lot of reasons, I don’t believe this works, but that’s another post. I'll also say this - I said it to you when we spoke, and I said it to Jason Schnur @ Protech last year - I don't believe in building your IP on top of someone else’s. When you do this, you lose control of your ability to deliver value to your customers. When we spoke, you described problems and challenges negotiating with the SFDC "governor" - and constantly having to work around the limits that SFDC places on your applications. Jason described frustration on Microsoft CRM's repeatedly delayed releases, and it affecting their ability to move in the direction that they know they need to go. I think you'll find that when you're depending completely, on someone else’s platform to deliver your solution, it will be difficult to keep up with players that own their own IP stack. My opinion only. That's why we never built our SaaS app on SFDC (though our investors wanted it). It's one of those ideas that sound great at 10,000 feet but, as you know, when you start to implement it, has its technical challenges. Sig you have the unusual advantage of being both a domain expert and a skilled software engineer, and so I know you know what I'm referring to here. Dan: Don't mix up non-profits with membership associations. There are around 100,000 membership associations in the U.S. (Forrester), but literally MILLIONS of non-profits. I'm quite sure that SFDC can handle non-profits, but they have a different problem set than membership associations. I've actually spoken w/ people from SFDC who admit that they've struggled to serve associations, and realize it's really too small a market to go after in a meaningful way. Let me say something else: always be suspect of software companies that give their software away from free. There is a step function in customer adoption from free to even the most minimal cost; people would use something that’s free that they wouldn’t use if it cost $100. When a software company is delivering free software it’s because they haven’t proved the value proposition; they haven’t honed the features/offering with a price point that a customer will actually find valuable in the face of competition. I think this is true for SFDC in the association space; I suspect if SFDC started charging sticker price for association seats, a lot of their customers would migrate to association-specific solutions like WIldApricot. So YES, don't underestimate the persuasiveness of FREE!! The cost-value analysis gets really interesting when you start dividing by zero (I think it ends up to be infinity :-)) Krysta: Not sure I understand your question because I missed the word between "why" and "are". Is it why are "you?" Or it is "Avectra"? I think I can answer either way. Here goes… A small market for SFDC is a huge market for a small privately held firm like any of the AMS players. But here's the kicker - the idiosyncratic nature of this market has spawned an entire class of software companies that are really consulting firms. I say this because in order to address each association's unique requirements, organically grown companies spend an inordinate amount of time customizing the solution; and inevitably, most of their revenue comes from professional services. Thus they have the margins of a consulting firm, rather than a true software firm. But the vision, the Holy Grail, is to be able to offer a piece of software that can "scale..." in other words, that can work for 1 user, and can work for 100 - that can be afforded by a 1 staff association, and can be afforded by a 100. The reason why Avectra didn’t stick with enterprise is that they saw the revenue potential of this Holy Grail. Really: THEY SAW THE OPPORTUNITY TO RUN A HIGH-MARGIN BUSINESS. Credit to them for the vision. People get caught up with the revenues of these large AMS companies, but no one asks about MARGINS. How much of that revenue get’s taken home?? If you dig deeper you’ll find that most of these companies P&L look more like Accenture than SFDC. But even if you’re a company like ASI, who have been pretty successful at focusing costs on software and letting partners do the service work, a SaaS business still has efficiencies over a traditional software business; namely, ASI has to concern themselves with managing releases, patches, service packs; their support organization must contemplate supporting multiple versions, doing onsite maintenance for locally deployed software instances, etc. All of this overhead gets passed to the customer; and, because releases create such overhead, they are infrequent. A SaaS company has none of this overhead; they simply run a service. All customers are on the same version. There are no “behind the firewall deployments,” and only one database to maintain (eh-hem: this is why simply hosting a system and charging monthly is NOT the same as SaaS!!) And, because of this, they can release often. From these facts, I (and the tech community) come to these conclusions: 1) Non-SaaS products will never be able to price compete with equivalent SaaS products 2) SaaS products will always be able to innovate more quickly than non-SaaS products 3) SaaS companies will always operate with higher operating margins than non-SaaS products (note I said operating margins) This is why the world is moving to the Cloud. It’s how SFDC killed Seibel. It’s why Office just came out with Office 365. It’s why Microsoft Azure exists. It’s why Vocus was a hit. And – it’s what Avectra was after. Quite simply, Sterling Partners (the investors in Avectra) were sold on the notion that AVECTRA COULD BECOME THE SALESFORCE.COM OF THE ASSOCIATION SPACE. Just one problem though: IN ORDER TO DO THIS, YOU NEED AN SAAS PLATFORM THAT IS CUSTOMIZABLE. Period. If not, you will not be able to serve associations above a certain size. And if you do, they’ll be contorting themselves into an economic solution, they won’t be happy, and they’ll run as soon as a better solution comes around. Note that I said “platform.” A platform is different than the features built on top of a platform. You can always add features – a platform must be built right the first time or must be scrapped and restarted (read: Product Strategy for High Tech Companies by Michael McGrath). Which brings me right back around, 360, to Sig: there are features, and then there’s a platform. The problem in the space is a platform problem; each vendor has platform limitations that restrict them to a specific segment of the association market. Example: TMA Resources has a platform that can address almost every need, and is user friendly, but the implementation effort makes it unsuitable for small associations. That’s a platform problem; not a feature problem. Avectra has an extremely affordable platform, very easy to implement, but cannot be customized; and thus is unsuitable for the associations TMA Resources can serve; again, that’s a platform problem, not a feature problem. Platform problems are EXPENSIVE; feature problems are cheap. Sig – SalesForce.Com has no native concept of order management/processing; that’s a platform problem, not a feature problem. That’s why SFDC can’t enter this market. And thus (shameless plug) is the vision of MemberSuite; a platform that can serve a larger addressable market than any other vendor. A cloud-based AMS that has the affordability to serve small associations but the flexibility to service a large ones. This is what we do.

Patrick M - 26 August 2011 Reply

Andrew, it seems to me you are spending inordinate amount of time on Salesforce. Good companies focus on their customers and don't give a tinker's damn about what their competitors are doing.

Andrew Ryan - 28 August 2011 Reply

Patrick, That's really not true. In fact, it couldn't be less true; no company can survive without an understanding of it's Position in the market, which is defined by it's value proposition as it relates to it's competitors. Secondly, I'm sure you understand by now that the "first mover advantage" is a myth; market's are won by "fast followers," who pay close attention to their competitors strengths/weaknesses and mistakes in order to deliver value to their customers. Also - not sure why you think I'm spending an "inordinate amount of time on SalesForce?"

Patrick M - 28 August 2011 Reply

Andrew, this is your 3rd AMS company in less than 8 years. Your latest was built on the premise "we have to do something different than Avectra and go up market faster". What you don't understand is nobody buys features/ benefits (platforms). First they buy the salesperson then they buy the company. The last thing they buy is the product. There is a reason why the company that acquired your last product (Polaris) was initially able to sell a failed product. If the association was buying the product first they would have not sold one deal. When it comes to Salesforce, you are harping on what they don't have or can't do. You are remiss in not realizing they have good sales people that are backed by a great company and even beter technology. Simply put, there is nothing native in your product that Avectra or Salesforce can't have in 6 months.

Dennis M - 30 August 2011 Reply

Salesforce seems to be garnering attention. It is hard to beat free. I think they will stop any new mom and pop AMS companie from enetring the space? An AMS provider will need to do something different and compelling to warrant the recurring license costs.

Andrew Ryan - 3 September 2011 Reply

Patrick, You're wrong on several fronts. First, let me correct you - this is not my third AMS company, I think you might have mixed up with someone else. Second, I'm not quite sure you're qualified to speak on what the premise of my company is. If you'd like to know what it is, I can tell you; it's got nothing to do with Avectra. The premise is: Cloud-based software will always be able to deliver higher scalability, greater reliability, and a lower TCO than on-premise counterparts. Third, people buy solutions. The buy benefits. Even the greatest salesperson can't sell something that won't solve the problem. By essentially commoditizing AMS and reducing the decision points to the "best salesperson," I think you're simultaneously insulting the intelligence of AMS buyers and consultants who spend countless hours ensuring that a software is the right "fit," and you're oversimplifying market behavior. Fourth - you don't quite know what's in my product, so how can you say Avectra/SalesForce can't have it in six months? :-) Actually, you're quite wrong here - see my last post where I explained the difference between features and platforms. The MemberSuite platform is SaaS, is an open API, and is customizable; it's also an order processing system. That's unique, and not easily replicable. My point is the SFDC has the money to replicate it, but the cost-benefit out of wack for them. Andrew

Patrick M - 5 September 2011 Reply

Andrew, please tell me what involvement you had with ARC Solutions? What you don't understand is Salesforce will gain momemntum in this space by taking care of their clients. When you take care of your clients, clients will take care of you. That said, I wish you the best of luck. I'd just forewarn any AMS buyer about your past history. Usually the past predicts the future hence why Salesforce is gaining market share.

Dan Smyth - 6 September 2011 Reply

Andrew, are you saying your clients have the ability to access the back-end of your application? What do you mean by customizable? Your Membership even has custom reports and let's the association customize their own portal.

Diane Whitehead - 7 September 2011 Reply

Steve, I am not sure about Salesforce dominating the AMS space? Your Membership seems to have the prevailing winds. With their price point, I don't see associations jettisoning them for Salesforce. They will have to be a compelling reason. It will take more than just saving 6k in licensing costs.

Randy - 1 October 2011 Reply

Andrew, I qoute "I think you’re simultaneously insulting the intelligence of AMS buyers and consultants who spend countless hours ensuring that a software is the right “fit,” and you’re oversimplifying market behavior". My question is did any consultant recommend Polaris to an association? Did any association elect Polaris? If so, will you concede they made a terrible and costly mistake?

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Testimonials

“Wes was able to come in and offer tangible, relevant advice that made us more productive immediately. I value his understanding of databases but more so, his understanding of how nonprofits work. There was no lost time educating him about how membership organizations are “different.” Wes recommended changes in processes as well as tips and tricks that were easy to implement made an immediate positive impact.”

Mary Pat Paris, Executive Director
International Registration Plan

“We came to Wes because we were very frustrated with our existing AMS and we wanted to improve our capabilities as soon as practicable. Wes very quickly helped us through a process of identifying our needs, identifying potential vendors, and selecting a new system that we’ll be able to move into very quickly. I especially appreciated Wes’s candor about our processes as well as the systems we were looking at. He was a great resource to have in a period of high anxiety for our organization. I would highly recommend Wes for any similar project.”

Jack Chiasson, CMP Executive Director
National Association of Life Brokerage Agencies

“Wes was able to come in and offer tangible, relevant advice that made us more productive immediately. I value his understanding of databases but more so, his understanding of how nonprofits work. There was no lost time educating him about how membership organizations are “different.” Wes recommended changes in processes as well as tips and tricks that were easy to implement made an immediate positive impact.”

Mary Pat Paris, Executive Director
International Registration Plan

Mary Pat Paris
International Registration Plan

“This is the second database implementation we’ve done since I have been at Western Arts Alliance (WAA). The first I did on my own. This time we engaged Wes Trochlil as our database planning consultant. Let me tell you, this process is a whole lot easier having Wes on your team! For a small association like WAA, it’s tempting for board and EDs to question the justification and expense of a database planning consultant. But it’s the small associations that need Effective Database Management the most. Wes strengthened our planning process, clarified our needs requirements, helped us steer around solutions that couldn’t meet our objectives, and saved us money in the long haul.”

Tim Wilson, Executive Director
Western Arts Alliance

Tim Wilson
Western Arts Alliance
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