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Transcript:

Associations Rewired AMS Evolution Conversation

​[00:00:00]

Chris Bonney: hey Dave. Good to see you. Thanks for jumping on a conversation. Today we want to talk about the evolution of the AMS market. You’ve seen a lot over the years and it makes sense. I mean, there’s a time right now where we have the advent of ai. We have this market that’s been changing, and we’ll talk about all the different phases it’s gone through, but just wanted to have a conversation and pick your brain about what your thoughts are.

So do you wanna take a second and just sort of introduce yourself and then sort of jump into. Maybe when you started this, what the AMS market looked like and kinda where it’s gone to now, and we can sort of fill in the gaps from there.

David Schulman: Great. Well thanks Chris. Thanks for having me on this. It’s always exciting to kind of talk about the evolution of the industry because I think associations, they don’t get to see it day in and day out like us consultants do.

And and that’s a problem. Because they’re kind of shopping, [00:01:00] handicapped, they’re blind. And so I’ve always, I had this conversation a lot, but I would, I love this opportunity to get it out there in the larger market. So. I’ve been around in this industry and unlike many of the other consultants, I didn’t come out of the association space.

I came out of technology. Um, I ran before it was even termed on MSP or Microsoft Service or Solution Provider. We did become Microsoft Partners once Microsoft started that program. But in the, we actually started in the late eighties and I built an MSP that was servicing. Hundreds of association clients in the DC metro area and this was back in the day when the things in the computer world were just getting going and it was really exciting.

And we went in and put in all the server racks and. This implemented the software in a large number of associations in the [00:02:00] DC area, and I’ve had a front row seat to watching this market evolve. So I did that for about. 14, 15 years, sold that company, started a.com. Had a great time, raised 2320 $4 million.

And it was basically it was in the healthcare, ambulatory healthcare market and we were providing back office and front office software for ambulatory care physicians. Um, on tablet PCs back in 2000. And so they were running around before the internet was around before before, really before broadband was around, which is kind of the thing that really ended up burning us in the long run.

Uh, and, and then we did all right. We had 1500 physicians US-wide, and got ended that when we sold what was. What was left of the company, we got it up to eight and a half million. But when you’ve acquired 23, 20 4 [00:03:00] million, eight and a half million, doesn’t get anybody excited. Mm-hmm. Um, so I got out of that and then I decided what am I gonna do next?

And I returned to the market that was near and dear to my heart, and that was the association market. And I, I feel for associations because essentially most of them, if not all, are small businesses. And technology was new, it was coming, it was very expensive and they needed guidance. So I basically hung out a shingles started associations rewired, and uh, that’s what brought us to this.

And that was. That’s been for the last 20 years. So I’ve spent more than 30 years. We don’t go into the details, but you can see it on my head. And I, and you’ve been in this industry for almost as long. You’re younger than me, but but, but that’s what happens. Yeah. Yeah. So, so I look forward to this opportunity and, um, yeah, let’s dive in.

Yeah, sounds good. Yeah, appreciate that background. [00:04:00] So. You know, just talk about maybe, like, what did it look like? So you start in the industry, you’re helping folks find their tech and you’re trying to guide them in the a MS world. I mean, what did the a MS world even look like at that point? Oh my God.

Well, well, it was, it was the market, the computer market in general was. You know, in a, in its infant stage. Yeah. And, and like I said, I had an MSP we’re putting in networks and 70% of our clients were associations and they were all starved for, you know, something to put on those computers to help them move forward with their mission.

And there wasn’t much out there. I had some of the early adopters, and I won’t name specific names of the individuals that were also in Washington DC but they basically started with desktop databases like dBase and Fox Pro. And, you know, names like that are gonna be before most people’s. [00:05:00] Oh yeah.

Yes. Um, and they, but, but they built systems and they were people experienced who were having worked at associations. They built database systems to help associations drive their operations. Yeah. Um, and, and increase their efficiency. And you know, for example rob Miller, which everybody probably knows, I will mention names.

Built a Vectra or Blaze it was called, yeah, on Fox Pro. And that eventually became a vectra. Um, which then became NetForm Enterprise, uh, as it graduated and moved off the desktop up into the network and then into the, ultimately into the cloud. And similarly, in about the same timeframe, imus was built also on a desktop database called Omni System seven.

I remember that I remember the shrink wrapped boxes on my shelf of all these products. And, and that eventually evolved to IMS in a full cloud hosted environment. [00:06:00] Yeah. So, it, it was an exciting time. I used to go door to door to all our associations with these tech vendors to show them this technology and, and that’s basically how the market evolved.

So, um. And so from there it went to the cloud basically. I mean, was that the next step? Well, yeah. It, it, it eventually moved. First went, it went from the desktop to the server room. Ah, right. So it serves, so there was a shared database that the everybody on the network could use as opposed to one machine that everybody could use.

Right. And uh, but everything was on premise. So it was, it was kind of like they did, they had had to build up IT shops to support. This functionality and they, they had to it was everything they could do to keep the lights on and I mean. That in many cases, literally, because oftentimes the server is plugged into the same outlet that was shared by a coffee maker, and somebody would come [00:07:00] along and unplug something, thinking it was, you know, a another device in the kitchen or in the storage closet and literally shut off the server and people would come running screaming.

So, um, so it was, it was an interesting time. Yeah, that’s good. And so we move from the desktop to the server room, to the cloud, and the market is growing. There’s more and more opportunities, right? I mean, take us back to maybe 15 years ago. What did it look like about at that point the clouds around? And the market’s starting to mature a little bit.

Some of the heavy hitters are, are there, but there’s newbies coming in. So what did that feel like? You know, so that was, that, that was an intriguing time because everything was changing, kind of like not as fast as things are changing now, but, but, but it was, it was very interesting. Because if you pictured the stuff that moved from the desktop to the server room, the move to the cloud was kind of [00:08:00] like, a lot of those vendors were sort of taking a wait and see attitude.

They weren’t sure, but this whole cloud thing was, was a little. Amorphous and they literally and figuratively and uh, they didn’t really know if that was something they wanted to take on. And at the same time, you had other vendors out there, and these are largely mid-market and, and even early market adopters like your membership, which became YM I think it’s still called your membership.

And a bunch of others that came into the market and they built. To purpose an a MS designed for the cloud. And so you had the desktop folks that were migrating their technology mm-hmm. Up, which was kind of a, a, a haphazard Sure. Step and error and fix and re step. Capability. And then you had those peoples that came out with what we call multi-tenant solutions in the cloud.

That worked. Yeah. And um, they [00:09:00] weren’t as robust as a lot of these desktop solutions that have evolved or on-premise solutions, I should say. Mm-hmm. Um, but, but the simplicity of those systems was intriguing to many of the associations ’cause they, they. It’s not like they were sitting back and waiting for this whole computer fad to pass.

Yeah. But, but it was a very challenging time for them because they didn’t really, they weren’t sold on the promise of technology and what it was gonna do for them. And this, so this was kind of a let’s try this or try that time in, in an, it was an interesting era. Yeah. But, but the early adopters and the mid-market adopters that came in and did that kind of paved.

The plowed the road, if you will mm-hmm. For everybody to realize that the internet was gonna be the big enabler, that that was what was gonna allow them to scale and provide the services that were necessary. Uh, the problem with the mid-market folks is [00:10:00] that. They didn’t want, they wanted to be product companies.

They wanted a cookie cutter product that they could stamp out at a given client, do some minor tweaks to cover that last mile, and then move on to the next client, and thereby truly be scalable, which they were. YM was very successful. In fact, it could be argued that YM was the progenitor to what is today a multi-billion dollar industry in the form of momentive.

Mm-hmm. And or as many of you may know it as community brands. But YM was the pioneer. That was the thing that gave them the money to get together and build that company. But, but again, the, the trade off there was the trade off between how much customization they were willing to do because that would usurp the resources and take them away from focusing on evolving the product.

And many of them smartly focused. Scalability of having a true product, whereas many of the others, especially new [00:11:00] companies, became entranced by the amount of service revenue they were receiving. And that ended up being kind of a model they wanted to pursue, but it didn’t allow ’em to scale very well. So, so it was a unique time. The, the, the cloud folks had limited customization options and the on-premise folks would customize to your, to whatever you’re willing to spend. And did that dictate the budget and the, and the areas, you know, the, the market itself, small to mid-size stayed productized, and it was only the big organizations that could really.

Afford the customizations back then? Is that kind of how it went? We don’t want to, it was, that actually kind of came later. Yeah. That, that kind of came a little bit later. Because, because there were a few forks in the road for those evolving to the cloud, and that was one of the biggies. And, and the focus was.[00:12:00]

Do you wanna be a product company or do you wanna be a service company? Yeah. Um, I had overheard and actually been in the room in several. With several vendors that would have had those arguments in the C-suite, in the boardroom. And the CEOs all wanted to be product companies ’cause they wanted to scale and make a lot of money.

And and that made sense. So that meant we’re not gonna customize this thing to the nth degree because we don’t wanna spend time and effort on services. We want to be able to standardize it and get all the benefits. Come with that in terms of ease of support and maintenance and so on, and have everybody in lockstep on the same system essentially.

Yeah. The problem was that those shops that wanted to go that route, and there’s basically all of what the early enterprise shops were, had that argument in the boardroom about services versus product, and it always ended in [00:13:00] the same way. That was the CFO would come in and show them the balance sheet and show them that half or more of the revenue was coming from services, and that usually killed the argument.

Mm-hmm. And left those firms kind of moving forward in a staggered fashion because they have so much of the resources tied up with doing implementations and customizations and ongoing customizations and the support. Around and, and then having to support all of those. It was basically everybody had a unique product.

Yeah, yeah. You know, they started with the last mile, they started with the last mile, and that literally became more the last 10 miles because customers, once they got onto this thing that, oh, we could modify this, that, and the other thing, ended up drinking the Kool-Aid and, and they usually stopped when they ran outta money, and that’s when the evolution stopped.

It could be argued that many of them [00:14:00] resented having gone down that road having looked back because they ended up building a Frankenstein that something that not only was it only their vendor that could help them solve problems, but it may only be a couple of people at the vendor who know their unique build out that was required.

To get to that last mile and that customization for that customer that could actually interact with it. And that also came back to bite them at upgrade time because upgrades to the software, to the, to the foundational software would come out. And in many cases, we’ve all heard the stories and witnessed it firsthand in many cases of that causing.

Customers to have their customizations broken. Mm-hmm. You know, they go upgrade and all of a sudden a bunch of stuff doesn’t work. And then they’d have to go back and spend a fortune paying these vendors to fix the stuff that they also paid them to build in the first place. [00:15:00] And it became kind of a, a, a, a little more than, a little annoying to say the least.

Yeah, go ahead. That’s, yeah. No, that’s interesting. And then. More recently there’s been an a switch to building on top of an existing platform. So talk about that evolution, the sales forces and all that kind of stuff. Yes. And that was, that was right around 2010. Thereabouts. You know, Salesforce came out, I think in the late nineties as a CRM platform, and it wasn’t really adopted for more wider applications until about 2010.

And later being Microsoft, they always do things a little later. They, they want to see other people test the waters on the market first, and then they come out and throw everything at it. Um, Microsoft came out with dynamic CRM and. The promise of the platform was in. Was intoxicating, people could suddenly [00:16:00] solve all the issues they were having.

If you picture all these, the scenario I just talked about where they customized to a fault, right? Mm-hmm. And, and they got stuck with the system that they were the only customer for, and it evolved to the point the platform gave ’em the promise of the best of both worlds because what was happening with the aging of the enterprise applications is.

They would build features and functions to the heart’s cont to your heart’s contempt because new buyers, new customers were willing to pay for that, but nobody was gonna pay them to modernize the foundation. Mm-hmm. And, and so the foundation would lag considerably and often. Many of the platforms to this day, and I know all of your, there was some pushback on that, but they all tell you, oh yeah, no, we have major updates every quarter and whatever.

But no, that’s feature function. That may be cleaning up some [00:17:00] stuff, but it is not modernizing the foundation. So the platform gave ’em the best of both worlds because now the foundation. Was run and managed and evolved and modernized by big tech. And in fact their very livelihood was predicated on their ability to keep that foundation modern.

And it left the a MS vendors just focused on that last mile, which is what they should be focused on. So that fixed that problem I just mentioned of not modernizing the foundation, and it was beautiful, but the promise was a little different than the reality. I’m not sure where to start with that. Um, but there were a lot of issues that came in to haunt a lot of these vendors.

For one thing, the foundations, the platforms that they were built upon didn’t have all the feature functionality that the a MS vendors needed to be [00:18:00] able to build out their a MS. And as a result, those vendors turn to hard coding bits. That were necessary. And when I say bits, I’m talking about fundamental capabilities such as accounting, form building.

And then of course later things CRM was baked into the platforms, but not necessarily married to the a MS functionality. There. Were there and, and, and the website side of it, the portal. All of them had to have a member portal. That was something they had to build from whole cloth and hard coat. Mm-hmm.

And. That was great. They built all this stuff but then moved forward another 10 years or five years. And what happened was that the foundation builders, the big tech companies, Salesforce and Microsoft would build not necessarily a full accounting capability, but pieces of it. Salesforce came out with things called like the, uh, price book and, and the sub-ledger, and they were bits of [00:19:00] accounting, but.

The big AM Ss that were built on top of Salesforce couldn’t connect to those processes because what they built for those functions was built prior to them to, to the platforms coming out with that functionality and never the twain initial need. There was no way to integrate those capabilities. So what happened is that every day that went by, they were becoming more and more incompatible with the very platforms they were built on.

And that’s okay. If you’re happy with what you got. Mm-hmm. But if you wanna move forward on the platform and you wanna evolve and kinda land and expand, if you will, to, to extend that, perhaps you wanna build an inventory management system on your a MS. That’s all well and good, but somebody, a Salesforce partner or a Microsoft partner who wants to come in and build that inventory system is gonna build it for the platform.

Mm-hmm. Which isn’t gonna work with the a MS product because their underpinnings are different. So, [00:20:00] that was a problem. Uh, the other problem that came about with the platforms, especially in the Salesforce case, is things got somewhat pricey. Prices never went down with Salesforce. And in fact and same thing’s true with Microsoft CRM, which, which had it.

Different issues because they kind of staggered out of the gate and they didn’t wanna, they didn’t readily move to the cloud. It was, they’d moved pieces of CRM to the cloud and that left the vendors that had built AMS in Quagmire because some of the functionality they depended on wasn’t in the cloud.

And so if they wanted to move to the cloud, so they couldn’t, they had to use a hybrid model for a while and that came back to bite them big time. Uh uh, but. So the promise was there, but between the proprietary tech that was stuck in the underlying platform and the problems associated with the costs ever increasing on the platform, it [00:21:00] became.

I’m not gonna say it was priced out of the, out of the association market, but it was getting more and more expensive and the original promise, and I was one of the original evangelists on this because I thought it made sense to be able to go to a whole ecosystem that had thousands of vendors that could help you expand and extend augment capability of your a MS without being handcuffed to the vendor.

Because people were getting tired of that because the bills were getting higher and higher and they were getting less and less in return for those payments. So the promise of the platform is still there. Yeah. There are some new platforms out there. That are much more modern. Remember I said Salesforce started in the late nineties and Microsoft didn’t really get going until the late Auts.

These newer platforms were evolved in the, in the this, in this decade, and, and it shows. Because 20 years in [00:22:00] the digital world is primordial. Oo. It’s a long, that’s a long, well, so let’s just keep, there’s a lot going in the Amos going on in the a MS market, just in general. We know that in a lot of different ways, but let’s just extend talking about the product specifically.

Into today. So, you know, where are we at right now? And wh when you’re talking to your clients that are saying, what’s happening in the world right now and what do I need to do to get the right a MS or should I keep my a MS? Like, what’s happening just right this minute? So somebody listening, saying, you know, I, I, I’m not sure what to do right now.

You know, what’s your answer to that? So it, it, it’s a mixed bag as it always is. But, but the fact of the matter is the market is evolving and it’s maturing, and that’s a good thing for customers. ’cause when markets mature, you generally get more for less. And with technology, that’s always [00:23:00] true. So the, the legacy industry, the enterprise vendors.

Have gotten more and more expensive. And there’s a couple of pieces to that too that I want to throw in there. For one thing, private equity discovered our little association market, and that was not a good thing. Whatever you may feel about private equity they they generally do not improve the quality of the products and service because they don’t buy the key they buy to sell.

And, and they wanna squeeze money out of something that, where the money isn’t there. So in the old days, the enterprise vendors used to, they were willing to absorb costs and implementation because they knew they would have the long ongoing subscription revenue from the client. So they could, they could afford to do that.

Private equity came in and said, oh no, we’re not doing that anymore. And, and they would come in and they would [00:24:00] get rid of a lot of the expensive, a lot of the higher costs that the a MS vendor had and do everything to maximize revenue and profits. That was their sole focus. They didn’t really care that much, and I know I’ll get a lot of pushback on this, but they didn’t care about.

What the product was or what it did, they didn’t care that much about the market per se. They wanted to be able to take this, package it up, maybe acquire a few other technology companies, and within a two year timeframe, sell it at a profit and then walk away and, and that’s turned into a churn that has taken over the industry.

Really eroded the quality of the, of the products and the services that people got in the enterprise market because part of the cost that they jettisoned happened to contain a lot of the institutional knowledge of how the products were built. And that left the vendors [00:25:00] in a difficult position to service and maintain those products because they lost a lot of that knowledge of how to do that.

You will see that a lot of the enterprise vendors who started out in that, between the rock and hard place I talked about before that is between are we a product company and we a service company. They, they finally being pushed by private equity have offloaded the implementations to a partner channel.

And the problem with that. Is that, that little trade off that I talked about a minute ago where they were willing to absorb some of the cost of the implementation in order to get, keep and, and make the client happy. Those days are more or less over because now it’s two separate entities and the vendor isn’t responsible for the cost of the implementation and the cost of the implementations are considerably higher than they were just five years ago.

Because of this. And private [00:26:00] equity’s coming in because they, subscription revenue is like catnip to these guys. Mm-hmm. They want something where you get a customer and you’ve got a customer, if not for life, for a long time because you’re, and you’re getting monthly revenue when you just build that base.

And it’s a wonderful thing. They also bought, most of them, if not all of them, bought prior to buying, acquiring the a MS companies, they acquired payment gateways. That allowed them not only to get the front end revenue from the subscription, but they could get a cha-ching on the back end of every transaction that goes through the am MS, whether that’s membership dues or event registrations, or education classes, what have you.

And, and they love that model. But long story short, what it means to the customer is they were getting, they were paying a lot more for a lot less. Now fast forward. There is an end of the [00:27:00] market that we didn’t really talk about. I guess we were segueing into it, and that’s the product end of the market.

And YM is really kind of the pioneer of that, where they had a true cookie cutter solution that was scalable. That market scaled up over the years to have much more robust functionality. But better than that, in the last five years alone, that’s the size of that market has doubled. There are a ton of new vendors out there, and they’re building on newer tech tech stacks that allow them to create systems that are far more robust in functionality and far more flexible in their implementations.

And what that means to the customer is that now by looking at the product end of the market, they can actually achieve that goal of getting more for less. So I could tell you that there are a number of E enterprise implementations that we stewarded in the [00:28:00] last, you know, five to 10 years ago that would pale in comparison to what customers are getting today out of the product market.

And they’re paying one 10th of what they would in that older. Mm, build that last 10 miles from scratch because these modern tech stacks allow ’em to do it. So the customer’s in a much better place than, than they had anytime if the last time they shopped for an a MS was five or more years ago. It’s a totally different landscape now, and anybody shopping in the enterprise market should be looking at the product market.

So what I mean what, so that being a piece of advice, what. Is a your, you know, your full spectrum sort of, if you’re looking for an a MS today, here’s the steps you should take. Here’s the things you should be looking at. Here’s the considerations for the future. I mean, what are you telling your clients that come to you to help you, you [00:29:00] know, help find a new a MS?

A couple of things. First of all, the last time you did this was five or more years ago, jettisoned that process. The process that you use to identify the system you’re on today will not work in the new modern market, or you’ll just wind up going down a lot of rabbit holes and spending a lot of money and wasting a lot of time.

You know, in the, in, in the past when we would go into a client, we would do a full blown requirements gathering process that would, that would. It was kind of a blue sky opportunity for the staff to set, to put together their ideal system based on their perception of their needs. And that was fine and the consultants could translate that into tech speak so they could relate it to the enterprise vendors and, and kind of steward that.

But what pic [00:30:00] picture this. If I were to describe a a football player making a touchdown and doing that little celebratory thing where they throw the ball down into the ground and raise their fist in the air, think of two images of that. One is a photograph, full color photograph, and you’re seeing the football player go through this little celebration dance.

And the other is a stick figure drawing. Very basic. They both. Tell this exact same story. Anybody could look in either image and tell you exactly what that was. The difference is that the photograph is what’s in the mind’s eye of the association. Hiring the vendor and the stick figure is the version that’s in the vendor’s mind’s eye of what they’re building and never the twain shall meet.

So the so, so the role of the consultants was kind of straddling that line and trying to get the [00:31:00] vendor to provide a much more richer, detailed image. Of what their needs and requirements are more in the minds eye of the customer, and at the same time, we’d have to go to the customer and save them from themselves, from, you know, because 80% of the cost got bare, got.

Eaten away in that last mile of getting the perfection of that page. Yeah, I like blue, but not that blue. And, and this would go on and just chew up dollars to the point where systems were easily exceeding six digits. And, and I have seen many implementations exceed seven digits. And again, 80% of that is, is fleshing out stuff that.

It’s probably likely to change in the first six months to a year of having the system because what they envisioned that they wanted mm-hmm. Versus the reality of having it wasn’t all that important in the first place. Yeah. And, and they just didn’t get it. And that’s [00:32:00] definitely what the role of consultant is.

But again, those days have changed. So now people looking at systems should start with their strategy first, broad based strategy, not the details down in the weeds of how it has to look and how it needs to behave. And, and forget about trying to mirror the process that you use today because you developed that process.

Not in a vacuum, but it evolved over time with the tools that were available at the time. And if you use that to spec a new, more modern system, you’re kind of holding yourself back. So, so forget about that level of detail. You know, there’s how many stories about, uh, but you know, be careful what you wish for.

And, and, and so my rule is stay at the high level. Look at the products, you can find something that will be 10% of the cost and provide 80 to 90% of the functionality you need if and, and don’t invest [00:33:00] in that last 10%. Because if you do, it’s likely to change in the coming years. And now with AI and everything changing as rapidly as it is, stop cl to things.

Mm-hmm. Because it’s all gonna change quickly. Go with the, go with the path of least resistance. Pick products that are large cover, like I said, most of your needs, but have, but have the ability to evolve and allow you to evolve without spending an arm and a leg in years trying to implement these things.

That’s great. Does that make sense? It does. Trying. So we it because what, where we ended up with the a MS market a little bit is a checkbox war. We need to be able to say, we do this because everyone asked for it. And then the list just got longer and longer and longer. Right. And it just, it’s unsustainable for, for everybody.

So it’s great to see that we’re backing out a little bit, but we, you know, you [00:34:00] mentioned a guy, so like, you know, I don’t know that any of us have a perfect crystal ball on what that’s going to do, but. What should people be thinking about? I mean, as they’re selecting an a MS today, are there questions they should be asking of the vendor to say, what are you doing with ai?

Or what matters there? Well, AI’s important and it, I expect in the next. Two to three years, this market’s gonna change dramatically as far as how much penetration AI has, it’s just taking hold today. But to give you a wonderful example, there are a couple products out there that basically use AI to monitor all of the KPIs in the system without having a structure to go after it, and they can identify what makes a given member more likely to attribute or not renew.

Than others. And they, they, so they’re using AI to identify insights that you don’t know. [00:35:00] Mm-hmm. And then capitalize on those insights by presenting it to you and show you where you can head this off at the past so that you can prevent losing these members. Um, so that’s just one example of some of the others are out there and they’re just sort of toying with it and providing front end basically.

Help desk assistance to the staff for how to better use the system by letting AI answer the questions. But the, but the, to me, the more intriguing part is the first example I gave you where they can look at your member’s activity and start identifying patterns in those behaviors and help you discover where do your members want to go and where do they not want to go?

Yeah, allow you to provide much greater engagement and much less attrition than previously thought possible. So keep it simple. Don’t use the lens that you used five years or more ago [00:36:00] and be open to looking as solutions that five years ago you wouldn’t have considered, because it cost too little. I know that sounds ridiculous, but that’s an argument I have day in and day out today.

That’s a great insight. Yeah, and good to know. ’cause I think people just want to know what their move should be. Right now they’re not happy with their a MS or they don’t want to just make do anymore, but. Is it a time to sit back and, you know, see what happens? Or is it a time to move forward? And, uh, I mean, I know this is gonna sound self-serving, but in my opinion, everybody should be, who hasn’t bought a system in five or more years should be looking at it because instead, because they could reduce their costs and increase their productivity for a fraction of that, of what they’re paying today.

And yes. There’s always pain going through an a MS migration, but again, if you move to the product segment of the market, you’re, you’re missing a lot of that pain because they’re engineered [00:37:00] around getting you up and running within. Three months as opposed to one to two years. And, and that means that, that you can be up and running much faster and a lot less paying a lot less money and moving forward your bills are gonna be considerably lower.

And it’s fair to say the EMS uh, vendors are, are understanding where AI is going to fit in. They want it to fit in as much as any of us do to enhance the product and the experience. As well. So, you know, you’re, there’s gonna be evolution with whatever direction you go, but it feels like AI has to be a part of the conversation.

And the a MS providers, it’s key for them to be able to answer the questions. Right. And I, that’s probably a red flag if they can’t. Right, right. And so a AI is existential. So the a MS vendors that adopted early and integrated deeply into their, into their platforms are gonna [00:38:00] succeed. And those that are laggards and left behind are gonna pay for it in a big way.

Um, so I, I think it’s very important to ask vendors today don’t have high expectations. Because these things, AI came out in two years time, but, but massive tech firms were behind that. The a MS vendors are essentially small businesses. They just like the associations that they serve, they don’t change that quickly and readily, so they’re just kind of sticking their toes in the water now.

And some of the newer products are, are built. Leveraging AI for everything they do. And so you should look at that. You should, you should talk to vendors about what is the, what does their revenue look like, what percentage of it is service, and what percentage of it is product. ‘Cause that tells you a lot about, you know, how complex and costly the implementation of the maintenance and the service support’s gonna be.

And, and like I said, be [00:39:00] open to evolving with the maturing of the market because it’s there to serve you and to take advantage of that means better, faster, cheaper. Don’t sit back and wait because in the meantime you’re falling behind and you’re spending a fortune just to maintain the as is state, which obviously if you’re thinking about if, if you purchased five or more years ago.

I guarantee you, you’re thinking about should we be looking at a new a MS and I’m here to tell you. Absolutely. That’s great. And that’s a great, uh, way to sort of close out what we’re talking about today. Any parting words? I mean, what did, what is anything you want to say before we sort of sign off? No, I’m just very excited about the opportunities ahead.

I, I think the, the, the cadence of change that we’ve witnessed in the last 30 years that I’ve experienced is gonna be so compressed. It’s gonna be unrecognizable moving forward. It’s gonna be a [00:40:00] blur and yes, we’re gonna all get whiplash from just trying to keep up, but the more of that that you can do.

The more you are gonna stand because your competition is gonna be doing it. And if you’re not doing it, just like the a MS vendors, if they’re not doing it, they’re gonna get left behind and you don’t want to get left behind. And the fact that you can do it for pennies on the dollar of what it used to cost means, by all means.

It’s not, don’t look at it as being the solution that’s gonna hold us for the next decade because. Nobody knows. Nobody. Nobody. You know, we used to have two year, one year, three year, five year plans in our business model. Those are all out the window. Sure, nobody can do that anymore. So find something that fits you for today and has the flexibility to evolve to tomorrow.

And don’t spend an arm and a leg getting. That’s great. Alright, cool. Well, I mean, I think, uh, we [00:41:00] covered a lot of ground and it was, I, I love the perspective and the insights that you, that you’ve provided there. So appreciate you spending some time today having a conversation with the a MS market and the evolution and where we are today.

Great. And I, you know, I love talking, obviously I love talking about this stuff, but, but associations, rewired is open. If anybody wants to call and just have a conversation, I’m happy to discuss it with them. We have, I can show them the lay of the land in the a MS vendor market and kind of show how the different segments bear out and see what some of the newer vendors are and what they’re doing, and happy to have that conversation if you’re, if you’re on the fence and trying to make some decisions.

Perhaps a conversation would be helpful. Yeah, please call. Yeah. Yeah, that sounds good. And that’s associations rewired.com. Thank you. That’s the place. Wonderful. Thanks Chris. I enjoyed this. Me too. Thank you. Okay, bye.

​[00:42:00]

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Transcript:

Associations Rewired AMS Evolution Conversation

​[00:00:00]

Chris Bonney: hey Dave. Good to see you. Thanks for jumping on a conversation. Today we want to talk about the evolution of the AMS market. You’ve seen a lot over the years and it makes sense. I mean, there’s a time right now where we have the advent of ai. We have this market that’s been changing, and we’ll talk about all the different phases it’s gone through, but just wanted to have a conversation and pick your brain about what your thoughts are.

So do you wanna take a second and just sort of introduce yourself and then sort of jump into. Maybe when you started this, what the AMS market looked like and kinda where it’s gone to now, and we can sort of fill in the gaps from there.

David Schulman: Great. Well thanks Chris. Thanks for having me on this. It’s always exciting to kind of talk about the evolution of the industry because I think associations, they don’t get to see it day in and day out like us consultants do.

And and that’s a problem. Because they’re kind of shopping, [00:01:00] handicapped, they’re blind. And so I’ve always, I had this conversation a lot, but I would, I love this opportunity to get it out there in the larger market. So. I’ve been around in this industry and unlike many of the other consultants, I didn’t come out of the association space.

I came out of technology. Um, I ran before it was even termed on MSP or Microsoft Service or Solution Provider. We did become Microsoft Partners once Microsoft started that program. But in the, we actually started in the late eighties and I built an MSP that was servicing. Hundreds of association clients in the DC metro area and this was back in the day when the things in the computer world were just getting going and it was really exciting.

And we went in and put in all the server racks and. This implemented the software in a large number of associations in the [00:02:00] DC area, and I’ve had a front row seat to watching this market evolve. So I did that for about. 14, 15 years, sold that company, started a.com. Had a great time, raised 2320 $4 million.

And it was basically it was in the healthcare, ambulatory healthcare market and we were providing back office and front office software for ambulatory care physicians. Um, on tablet PCs back in 2000. And so they were running around before the internet was around before before, really before broadband was around, which is kind of the thing that really ended up burning us in the long run.

Uh, and, and then we did all right. We had 1500 physicians US-wide, and got ended that when we sold what was. What was left of the company, we got it up to eight and a half million. But when you’ve acquired 23, 20 4 [00:03:00] million, eight and a half million, doesn’t get anybody excited. Mm-hmm. Um, so I got out of that and then I decided what am I gonna do next?

And I returned to the market that was near and dear to my heart, and that was the association market. And I, I feel for associations because essentially most of them, if not all, are small businesses. And technology was new, it was coming, it was very expensive and they needed guidance. So I basically hung out a shingles started associations rewired, and uh, that’s what brought us to this.

And that was. That’s been for the last 20 years. So I’ve spent more than 30 years. We don’t go into the details, but you can see it on my head. And I, and you’ve been in this industry for almost as long. You’re younger than me, but but, but that’s what happens. Yeah. Yeah. So, so I look forward to this opportunity and, um, yeah, let’s dive in.

Yeah, sounds good. Yeah, appreciate that background. [00:04:00] So. You know, just talk about maybe, like, what did it look like? So you start in the industry, you’re helping folks find their tech and you’re trying to guide them in the a MS world. I mean, what did the a MS world even look like at that point? Oh my God.

Well, well, it was, it was the market, the computer market in general was. You know, in a, in its infant stage. Yeah. And, and like I said, I had an MSP we’re putting in networks and 70% of our clients were associations and they were all starved for, you know, something to put on those computers to help them move forward with their mission.

And there wasn’t much out there. I had some of the early adopters, and I won’t name specific names of the individuals that were also in Washington DC but they basically started with desktop databases like dBase and Fox Pro. And, you know, names like that are gonna be before most people’s. [00:05:00] Oh yeah.

Yes. Um, and they, but, but they built systems and they were people experienced who were having worked at associations. They built database systems to help associations drive their operations. Yeah. Um, and, and increase their efficiency. And you know, for example rob Miller, which everybody probably knows, I will mention names.

Built a Vectra or Blaze it was called, yeah, on Fox Pro. And that eventually became a vectra. Um, which then became NetForm Enterprise, uh, as it graduated and moved off the desktop up into the network and then into the, ultimately into the cloud. And similarly, in about the same timeframe, imus was built also on a desktop database called Omni System seven.

I remember that I remember the shrink wrapped boxes on my shelf of all these products. And, and that eventually evolved to IMS in a full cloud hosted environment. [00:06:00] Yeah. So, it, it was an exciting time. I used to go door to door to all our associations with these tech vendors to show them this technology and, and that’s basically how the market evolved.

So, um. And so from there it went to the cloud basically. I mean, was that the next step? Well, yeah. It, it, it eventually moved. First went, it went from the desktop to the server room. Ah, right. So it serves, so there was a shared database that the everybody on the network could use as opposed to one machine that everybody could use.

Right. And uh, but everything was on premise. So it was, it was kind of like they did, they had had to build up IT shops to support. This functionality and they, they had to it was everything they could do to keep the lights on and I mean. That in many cases, literally, because oftentimes the server is plugged into the same outlet that was shared by a coffee maker, and somebody would come [00:07:00] along and unplug something, thinking it was, you know, a another device in the kitchen or in the storage closet and literally shut off the server and people would come running screaming.

So, um, so it was, it was an interesting time. Yeah, that’s good. And so we move from the desktop to the server room, to the cloud, and the market is growing. There’s more and more opportunities, right? I mean, take us back to maybe 15 years ago. What did it look like about at that point the clouds around? And the market’s starting to mature a little bit.

Some of the heavy hitters are, are there, but there’s newbies coming in. So what did that feel like? You know, so that was, that, that was an intriguing time because everything was changing, kind of like not as fast as things are changing now, but, but, but it was, it was very interesting. Because if you pictured the stuff that moved from the desktop to the server room, the move to the cloud was kind of [00:08:00] like, a lot of those vendors were sort of taking a wait and see attitude.

They weren’t sure, but this whole cloud thing was, was a little. Amorphous and they literally and figuratively and uh, they didn’t really know if that was something they wanted to take on. And at the same time, you had other vendors out there, and these are largely mid-market and, and even early market adopters like your membership, which became YM I think it’s still called your membership.

And a bunch of others that came into the market and they built. To purpose an a MS designed for the cloud. And so you had the desktop folks that were migrating their technology mm-hmm. Up, which was kind of a, a, a haphazard Sure. Step and error and fix and re step. Capability. And then you had those peoples that came out with what we call multi-tenant solutions in the cloud.

That worked. Yeah. And um, they [00:09:00] weren’t as robust as a lot of these desktop solutions that have evolved or on-premise solutions, I should say. Mm-hmm. Um, but, but the simplicity of those systems was intriguing to many of the associations ’cause they, they. It’s not like they were sitting back and waiting for this whole computer fad to pass.

Yeah. But, but it was a very challenging time for them because they didn’t really, they weren’t sold on the promise of technology and what it was gonna do for them. And this, so this was kind of a let’s try this or try that time in, in an, it was an interesting era. Yeah. But, but the early adopters and the mid-market adopters that came in and did that kind of paved.

The plowed the road, if you will mm-hmm. For everybody to realize that the internet was gonna be the big enabler, that that was what was gonna allow them to scale and provide the services that were necessary. Uh, the problem with the mid-market folks is [00:10:00] that. They didn’t want, they wanted to be product companies.

They wanted a cookie cutter product that they could stamp out at a given client, do some minor tweaks to cover that last mile, and then move on to the next client, and thereby truly be scalable, which they were. YM was very successful. In fact, it could be argued that YM was the progenitor to what is today a multi-billion dollar industry in the form of momentive.

Mm-hmm. And or as many of you may know it as community brands. But YM was the pioneer. That was the thing that gave them the money to get together and build that company. But, but again, the, the trade off there was the trade off between how much customization they were willing to do because that would usurp the resources and take them away from focusing on evolving the product.

And many of them smartly focused. Scalability of having a true product, whereas many of the others, especially new [00:11:00] companies, became entranced by the amount of service revenue they were receiving. And that ended up being kind of a model they wanted to pursue, but it didn’t allow ’em to scale very well. So, so it was a unique time. The, the, the cloud folks had limited customization options and the on-premise folks would customize to your, to whatever you’re willing to spend. And did that dictate the budget and the, and the areas, you know, the, the market itself, small to mid-size stayed productized, and it was only the big organizations that could really.

Afford the customizations back then? Is that kind of how it went? We don’t want to, it was, that actually kind of came later. Yeah. That, that kind of came a little bit later. Because, because there were a few forks in the road for those evolving to the cloud, and that was one of the biggies. And, and the focus was.[00:12:00]

Do you wanna be a product company or do you wanna be a service company? Yeah. Um, I had overheard and actually been in the room in several. With several vendors that would have had those arguments in the C-suite, in the boardroom. And the CEOs all wanted to be product companies ’cause they wanted to scale and make a lot of money.

And and that made sense. So that meant we’re not gonna customize this thing to the nth degree because we don’t wanna spend time and effort on services. We want to be able to standardize it and get all the benefits. Come with that in terms of ease of support and maintenance and so on, and have everybody in lockstep on the same system essentially.

Yeah. The problem was that those shops that wanted to go that route, and there’s basically all of what the early enterprise shops were, had that argument in the boardroom about services versus product, and it always ended in [00:13:00] the same way. That was the CFO would come in and show them the balance sheet and show them that half or more of the revenue was coming from services, and that usually killed the argument.

Mm-hmm. And left those firms kind of moving forward in a staggered fashion because they have so much of the resources tied up with doing implementations and customizations and ongoing customizations and the support. Around and, and then having to support all of those. It was basically everybody had a unique product.

Yeah, yeah. You know, they started with the last mile, they started with the last mile, and that literally became more the last 10 miles because customers, once they got onto this thing that, oh, we could modify this, that, and the other thing, ended up drinking the Kool-Aid and, and they usually stopped when they ran outta money, and that’s when the evolution stopped.

It could be argued that many of them [00:14:00] resented having gone down that road having looked back because they ended up building a Frankenstein that something that not only was it only their vendor that could help them solve problems, but it may only be a couple of people at the vendor who know their unique build out that was required.

To get to that last mile and that customization for that customer that could actually interact with it. And that also came back to bite them at upgrade time because upgrades to the software, to the, to the foundational software would come out. And in many cases, we’ve all heard the stories and witnessed it firsthand in many cases of that causing.

Customers to have their customizations broken. Mm-hmm. You know, they go upgrade and all of a sudden a bunch of stuff doesn’t work. And then they’d have to go back and spend a fortune paying these vendors to fix the stuff that they also paid them to build in the first place. [00:15:00] And it became kind of a, a, a, a little more than, a little annoying to say the least.

Yeah, go ahead. That’s, yeah. No, that’s interesting. And then. More recently there’s been an a switch to building on top of an existing platform. So talk about that evolution, the sales forces and all that kind of stuff. Yes. And that was, that was right around 2010. Thereabouts. You know, Salesforce came out, I think in the late nineties as a CRM platform, and it wasn’t really adopted for more wider applications until about 2010.

And later being Microsoft, they always do things a little later. They, they want to see other people test the waters on the market first, and then they come out and throw everything at it. Um, Microsoft came out with dynamic CRM and. The promise of the platform was in. Was intoxicating, people could suddenly [00:16:00] solve all the issues they were having.

If you picture all these, the scenario I just talked about where they customized to a fault, right? Mm-hmm. And, and they got stuck with the system that they were the only customer for, and it evolved to the point the platform gave ’em the promise of the best of both worlds because what was happening with the aging of the enterprise applications is.

They would build features and functions to the heart’s cont to your heart’s contempt because new buyers, new customers were willing to pay for that, but nobody was gonna pay them to modernize the foundation. Mm-hmm. And, and so the foundation would lag considerably and often. Many of the platforms to this day, and I know all of your, there was some pushback on that, but they all tell you, oh yeah, no, we have major updates every quarter and whatever.

But no, that’s feature function. That may be cleaning up some [00:17:00] stuff, but it is not modernizing the foundation. So the platform gave ’em the best of both worlds because now the foundation. Was run and managed and evolved and modernized by big tech. And in fact their very livelihood was predicated on their ability to keep that foundation modern.

And it left the a MS vendors just focused on that last mile, which is what they should be focused on. So that fixed that problem I just mentioned of not modernizing the foundation, and it was beautiful, but the promise was a little different than the reality. I’m not sure where to start with that. Um, but there were a lot of issues that came in to haunt a lot of these vendors.

For one thing, the foundations, the platforms that they were built upon didn’t have all the feature functionality that the a MS vendors needed to be [00:18:00] able to build out their a MS. And as a result, those vendors turn to hard coding bits. That were necessary. And when I say bits, I’m talking about fundamental capabilities such as accounting, form building.

And then of course later things CRM was baked into the platforms, but not necessarily married to the a MS functionality. There. Were there and, and, and the website side of it, the portal. All of them had to have a member portal. That was something they had to build from whole cloth and hard coat. Mm-hmm.

And. That was great. They built all this stuff but then moved forward another 10 years or five years. And what happened was that the foundation builders, the big tech companies, Salesforce and Microsoft would build not necessarily a full accounting capability, but pieces of it. Salesforce came out with things called like the, uh, price book and, and the sub-ledger, and they were bits of [00:19:00] accounting, but.

The big AM Ss that were built on top of Salesforce couldn’t connect to those processes because what they built for those functions was built prior to them to, to the platforms coming out with that functionality and never the twain initial need. There was no way to integrate those capabilities. So what happened is that every day that went by, they were becoming more and more incompatible with the very platforms they were built on.

And that’s okay. If you’re happy with what you got. Mm-hmm. But if you wanna move forward on the platform and you wanna evolve and kinda land and expand, if you will, to, to extend that, perhaps you wanna build an inventory management system on your a MS. That’s all well and good, but somebody, a Salesforce partner or a Microsoft partner who wants to come in and build that inventory system is gonna build it for the platform.

Mm-hmm. Which isn’t gonna work with the a MS product because their underpinnings are different. So, [00:20:00] that was a problem. Uh, the other problem that came about with the platforms, especially in the Salesforce case, is things got somewhat pricey. Prices never went down with Salesforce. And in fact and same thing’s true with Microsoft CRM, which, which had it.

Different issues because they kind of staggered out of the gate and they didn’t wanna, they didn’t readily move to the cloud. It was, they’d moved pieces of CRM to the cloud and that left the vendors that had built AMS in Quagmire because some of the functionality they depended on wasn’t in the cloud.

And so if they wanted to move to the cloud, so they couldn’t, they had to use a hybrid model for a while and that came back to bite them big time. Uh uh, but. So the promise was there, but between the proprietary tech that was stuck in the underlying platform and the problems associated with the costs ever increasing on the platform, it [00:21:00] became.

I’m not gonna say it was priced out of the, out of the association market, but it was getting more and more expensive and the original promise, and I was one of the original evangelists on this because I thought it made sense to be able to go to a whole ecosystem that had thousands of vendors that could help you expand and extend augment capability of your a MS without being handcuffed to the vendor.

Because people were getting tired of that because the bills were getting higher and higher and they were getting less and less in return for those payments. So the promise of the platform is still there. Yeah. There are some new platforms out there. That are much more modern. Remember I said Salesforce started in the late nineties and Microsoft didn’t really get going until the late Auts.

These newer platforms were evolved in the, in the this, in this decade, and, and it shows. Because 20 years in [00:22:00] the digital world is primordial. Oo. It’s a long, that’s a long, well, so let’s just keep, there’s a lot going in the Amos going on in the a MS market, just in general. We know that in a lot of different ways, but let’s just extend talking about the product specifically.

Into today. So, you know, where are we at right now? And wh when you’re talking to your clients that are saying, what’s happening in the world right now and what do I need to do to get the right a MS or should I keep my a MS? Like, what’s happening just right this minute? So somebody listening, saying, you know, I, I, I’m not sure what to do right now.

You know, what’s your answer to that? So it, it, it’s a mixed bag as it always is. But, but the fact of the matter is the market is evolving and it’s maturing, and that’s a good thing for customers. ’cause when markets mature, you generally get more for less. And with technology, that’s always [00:23:00] true. So the, the legacy industry, the enterprise vendors.

Have gotten more and more expensive. And there’s a couple of pieces to that too that I want to throw in there. For one thing, private equity discovered our little association market, and that was not a good thing. Whatever you may feel about private equity they they generally do not improve the quality of the products and service because they don’t buy the key they buy to sell.

And, and they wanna squeeze money out of something that, where the money isn’t there. So in the old days, the enterprise vendors used to, they were willing to absorb costs and implementation because they knew they would have the long ongoing subscription revenue from the client. So they could, they could afford to do that.

Private equity came in and said, oh no, we’re not doing that anymore. And, and they would come in and they would [00:24:00] get rid of a lot of the expensive, a lot of the higher costs that the a MS vendor had and do everything to maximize revenue and profits. That was their sole focus. They didn’t really care that much, and I know I’ll get a lot of pushback on this, but they didn’t care about.

What the product was or what it did, they didn’t care that much about the market per se. They wanted to be able to take this, package it up, maybe acquire a few other technology companies, and within a two year timeframe, sell it at a profit and then walk away and, and that’s turned into a churn that has taken over the industry.

Really eroded the quality of the, of the products and the services that people got in the enterprise market because part of the cost that they jettisoned happened to contain a lot of the institutional knowledge of how the products were built. And that left the vendors [00:25:00] in a difficult position to service and maintain those products because they lost a lot of that knowledge of how to do that.

You will see that a lot of the enterprise vendors who started out in that, between the rock and hard place I talked about before that is between are we a product company and we a service company. They, they finally being pushed by private equity have offloaded the implementations to a partner channel.

And the problem with that. Is that, that little trade off that I talked about a minute ago where they were willing to absorb some of the cost of the implementation in order to get, keep and, and make the client happy. Those days are more or less over because now it’s two separate entities and the vendor isn’t responsible for the cost of the implementation and the cost of the implementations are considerably higher than they were just five years ago.

Because of this. And private [00:26:00] equity’s coming in because they, subscription revenue is like catnip to these guys. Mm-hmm. They want something where you get a customer and you’ve got a customer, if not for life, for a long time because you’re, and you’re getting monthly revenue when you just build that base.

And it’s a wonderful thing. They also bought, most of them, if not all of them, bought prior to buying, acquiring the a MS companies, they acquired payment gateways. That allowed them not only to get the front end revenue from the subscription, but they could get a cha-ching on the back end of every transaction that goes through the am MS, whether that’s membership dues or event registrations, or education classes, what have you.

And, and they love that model. But long story short, what it means to the customer is they were getting, they were paying a lot more for a lot less. Now fast forward. There is an end of the [00:27:00] market that we didn’t really talk about. I guess we were segueing into it, and that’s the product end of the market.

And YM is really kind of the pioneer of that, where they had a true cookie cutter solution that was scalable. That market scaled up over the years to have much more robust functionality. But better than that, in the last five years alone, that’s the size of that market has doubled. There are a ton of new vendors out there, and they’re building on newer tech tech stacks that allow them to create systems that are far more robust in functionality and far more flexible in their implementations.

And what that means to the customer is that now by looking at the product end of the market, they can actually achieve that goal of getting more for less. So I could tell you that there are a number of E enterprise implementations that we stewarded in the [00:28:00] last, you know, five to 10 years ago that would pale in comparison to what customers are getting today out of the product market.

And they’re paying one 10th of what they would in that older. Mm, build that last 10 miles from scratch because these modern tech stacks allow ’em to do it. So the customer’s in a much better place than, than they had anytime if the last time they shopped for an a MS was five or more years ago. It’s a totally different landscape now, and anybody shopping in the enterprise market should be looking at the product market.

So what I mean what, so that being a piece of advice, what. Is a your, you know, your full spectrum sort of, if you’re looking for an a MS today, here’s the steps you should take. Here’s the things you should be looking at. Here’s the considerations for the future. I mean, what are you telling your clients that come to you to help you, you [00:29:00] know, help find a new a MS?

A couple of things. First of all, the last time you did this was five or more years ago, jettisoned that process. The process that you use to identify the system you’re on today will not work in the new modern market, or you’ll just wind up going down a lot of rabbit holes and spending a lot of money and wasting a lot of time.

You know, in the, in, in the past when we would go into a client, we would do a full blown requirements gathering process that would, that would. It was kind of a blue sky opportunity for the staff to set, to put together their ideal system based on their perception of their needs. And that was fine and the consultants could translate that into tech speak so they could relate it to the enterprise vendors and, and kind of steward that.

But what pic [00:30:00] picture this. If I were to describe a a football player making a touchdown and doing that little celebratory thing where they throw the ball down into the ground and raise their fist in the air, think of two images of that. One is a photograph, full color photograph, and you’re seeing the football player go through this little celebration dance.

And the other is a stick figure drawing. Very basic. They both. Tell this exact same story. Anybody could look in either image and tell you exactly what that was. The difference is that the photograph is what’s in the mind’s eye of the association. Hiring the vendor and the stick figure is the version that’s in the vendor’s mind’s eye of what they’re building and never the twain shall meet.

So the so, so the role of the consultants was kind of straddling that line and trying to get the [00:31:00] vendor to provide a much more richer, detailed image. Of what their needs and requirements are more in the minds eye of the customer, and at the same time, we’d have to go to the customer and save them from themselves, from, you know, because 80% of the cost got bare, got.

Eaten away in that last mile of getting the perfection of that page. Yeah, I like blue, but not that blue. And, and this would go on and just chew up dollars to the point where systems were easily exceeding six digits. And, and I have seen many implementations exceed seven digits. And again, 80% of that is, is fleshing out stuff that.

It’s probably likely to change in the first six months to a year of having the system because what they envisioned that they wanted mm-hmm. Versus the reality of having it wasn’t all that important in the first place. Yeah. And, and they just didn’t get it. And that’s [00:32:00] definitely what the role of consultant is.

But again, those days have changed. So now people looking at systems should start with their strategy first, broad based strategy, not the details down in the weeds of how it has to look and how it needs to behave. And, and forget about trying to mirror the process that you use today because you developed that process.

Not in a vacuum, but it evolved over time with the tools that were available at the time. And if you use that to spec a new, more modern system, you’re kind of holding yourself back. So, so forget about that level of detail. You know, there’s how many stories about, uh, but you know, be careful what you wish for.

And, and, and so my rule is stay at the high level. Look at the products, you can find something that will be 10% of the cost and provide 80 to 90% of the functionality you need if and, and don’t invest [00:33:00] in that last 10%. Because if you do, it’s likely to change in the coming years. And now with AI and everything changing as rapidly as it is, stop cl to things.

Mm-hmm. Because it’s all gonna change quickly. Go with the, go with the path of least resistance. Pick products that are large cover, like I said, most of your needs, but have, but have the ability to evolve and allow you to evolve without spending an arm and a leg in years trying to implement these things.

That’s great. Does that make sense? It does. Trying. So we it because what, where we ended up with the a MS market a little bit is a checkbox war. We need to be able to say, we do this because everyone asked for it. And then the list just got longer and longer and longer. Right. And it just, it’s unsustainable for, for everybody.

So it’s great to see that we’re backing out a little bit, but we, you know, you [00:34:00] mentioned a guy, so like, you know, I don’t know that any of us have a perfect crystal ball on what that’s going to do, but. What should people be thinking about? I mean, as they’re selecting an a MS today, are there questions they should be asking of the vendor to say, what are you doing with ai?

Or what matters there? Well, AI’s important and it, I expect in the next. Two to three years, this market’s gonna change dramatically as far as how much penetration AI has, it’s just taking hold today. But to give you a wonderful example, there are a couple products out there that basically use AI to monitor all of the KPIs in the system without having a structure to go after it, and they can identify what makes a given member more likely to attribute or not renew.

Than others. And they, they, so they’re using AI to identify insights that you don’t know. [00:35:00] Mm-hmm. And then capitalize on those insights by presenting it to you and show you where you can head this off at the past so that you can prevent losing these members. Um, so that’s just one example of some of the others are out there and they’re just sort of toying with it and providing front end basically.

Help desk assistance to the staff for how to better use the system by letting AI answer the questions. But the, but the, to me, the more intriguing part is the first example I gave you where they can look at your member’s activity and start identifying patterns in those behaviors and help you discover where do your members want to go and where do they not want to go?

Yeah, allow you to provide much greater engagement and much less attrition than previously thought possible. So keep it simple. Don’t use the lens that you used five years or more ago [00:36:00] and be open to looking as solutions that five years ago you wouldn’t have considered, because it cost too little. I know that sounds ridiculous, but that’s an argument I have day in and day out today.

That’s a great insight. Yeah, and good to know. ’cause I think people just want to know what their move should be. Right now they’re not happy with their a MS or they don’t want to just make do anymore, but. Is it a time to sit back and, you know, see what happens? Or is it a time to move forward? And, uh, I mean, I know this is gonna sound self-serving, but in my opinion, everybody should be, who hasn’t bought a system in five or more years should be looking at it because instead, because they could reduce their costs and increase their productivity for a fraction of that, of what they’re paying today.

And yes. There’s always pain going through an a MS migration, but again, if you move to the product segment of the market, you’re, you’re missing a lot of that pain because they’re engineered [00:37:00] around getting you up and running within. Three months as opposed to one to two years. And, and that means that, that you can be up and running much faster and a lot less paying a lot less money and moving forward your bills are gonna be considerably lower.

And it’s fair to say the EMS uh, vendors are, are understanding where AI is going to fit in. They want it to fit in as much as any of us do to enhance the product and the experience. As well. So, you know, you’re, there’s gonna be evolution with whatever direction you go, but it feels like AI has to be a part of the conversation.

And the a MS providers, it’s key for them to be able to answer the questions. Right. And I, that’s probably a red flag if they can’t. Right, right. And so a AI is existential. So the a MS vendors that adopted early and integrated deeply into their, into their platforms are gonna [00:38:00] succeed. And those that are laggards and left behind are gonna pay for it in a big way.

Um, so I, I think it’s very important to ask vendors today don’t have high expectations. Because these things, AI came out in two years time, but, but massive tech firms were behind that. The a MS vendors are essentially small businesses. They just like the associations that they serve, they don’t change that quickly and readily, so they’re just kind of sticking their toes in the water now.

And some of the newer products are, are built. Leveraging AI for everything they do. And so you should look at that. You should, you should talk to vendors about what is the, what does their revenue look like, what percentage of it is service, and what percentage of it is product. ‘Cause that tells you a lot about, you know, how complex and costly the implementation of the maintenance and the service support’s gonna be.

And, and like I said, be [00:39:00] open to evolving with the maturing of the market because it’s there to serve you and to take advantage of that means better, faster, cheaper. Don’t sit back and wait because in the meantime you’re falling behind and you’re spending a fortune just to maintain the as is state, which obviously if you’re thinking about if, if you purchased five or more years ago.

I guarantee you, you’re thinking about should we be looking at a new a MS and I’m here to tell you. Absolutely. That’s great. And that’s a great, uh, way to sort of close out what we’re talking about today. Any parting words? I mean, what did, what is anything you want to say before we sort of sign off? No, I’m just very excited about the opportunities ahead.

I, I think the, the, the cadence of change that we’ve witnessed in the last 30 years that I’ve experienced is gonna be so compressed. It’s gonna be unrecognizable moving forward. It’s gonna be a [00:40:00] blur and yes, we’re gonna all get whiplash from just trying to keep up, but the more of that that you can do.

The more you are gonna stand because your competition is gonna be doing it. And if you’re not doing it, just like the a MS vendors, if they’re not doing it, they’re gonna get left behind and you don’t want to get left behind. And the fact that you can do it for pennies on the dollar of what it used to cost means, by all means.

It’s not, don’t look at it as being the solution that’s gonna hold us for the next decade because. Nobody knows. Nobody. Nobody. You know, we used to have two year, one year, three year, five year plans in our business model. Those are all out the window. Sure, nobody can do that anymore. So find something that fits you for today and has the flexibility to evolve to tomorrow.

And don’t spend an arm and a leg getting. That’s great. Alright, cool. Well, I mean, I think, uh, we [00:41:00] covered a lot of ground and it was, I, I love the perspective and the insights that you, that you’ve provided there. So appreciate you spending some time today having a conversation with the a MS market and the evolution and where we are today.

Great. And I, you know, I love talking, obviously I love talking about this stuff, but, but associations, rewired is open. If anybody wants to call and just have a conversation, I’m happy to discuss it with them. We have, I can show them the lay of the land in the a MS vendor market and kind of show how the different segments bear out and see what some of the newer vendors are and what they’re doing, and happy to have that conversation if you’re, if you’re on the fence and trying to make some decisions.

Perhaps a conversation would be helpful. Yeah, please call. Yeah. Yeah, that sounds good. And that’s associations rewired.com. Thank you. That’s the place. Wonderful. Thanks Chris. I enjoyed this. Me too. Thank you. Okay, bye.

​[00:42:00]

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