Franchising has come to embrace cloud software – perhaps more than any other sector. But what are the benefits of shifting to the cloud for franchises?
Cloud software has revolutionised businesses of all shapes and sizes in recent years – and franchises are also getting in on the action. But what makes it such an important tool for franchising?
One of the first factors is simply down to the realities of the modern business landscape. Mark Woodhams, managing director of EMEA at NetSuite, the cloud business software suite, makes reference to some research conducted by Frost & Sullivan. It revealed that in 1953 the average life expectancy for a business was 63 years. Now companies only tend to last 18 years; in five years time, it will be just ten. “You’ve got new entrants to market all of the time, therefore you need to be able to move your business quickly,” he says. “Cloud software gives you the ability to be agile.”
There’s certainly no disputing that cloud software can afford franchises certain flexibilities that other forms of software can’t. “If you don’t have to physically have your own PC, your own server or your own software and somebody else maintaining all of those bits and pieces for you, then it’s got to be easier,” says Woodhams. He explains that if a franchisee has to focus less time and energy on maintaining systems and dealing with hardware, it frees them up to be creative, enter new markets, win new customers and serve existing ones. “It just takes away an enormous amount of pain for a franchisee,” he adds.
But it’s not just time that a franchise can save; adopting cloud software can also have a very real impact on its bottom line. Not only does switching to a cloud provider save on outlays for server space and staffing but pricing for cloud software often doesn’t involve the same long contractual terms that come with purchasing other software. This makes it easy to roll out as needed without making hefty financial commitments. “Because the model is subscription-based and centred on usage, they can make the investment in areas they need it, as opposed to taking on a monolithic capital expenditure,” says Bernard Ellis, VP of industry strategy hospitality at Infor, the enterprise software solution provider.
Inevitably, one of the most important benefits of cloud software to franchises will be mobility, particularly given franchisees may be spread out across potentially quite diffuse locations. “Clearly they’re not all based in an office,” says Karen Kelly, founder and managing director of Cleanhome, the cleaning franchise. “People are out and about; they need to have access to data whilst they’re travelling or meeting their clients and suppliers.” Being able to access everything on the go can be hugely beneficial to franchisees; Kelly even gives the example of one franchisee who caught up on their work while sitting in a field at Glastonbury.
Another huge benefit of cloud software is that, rather than sitting behind a wall, a franchise’s data can far more easily be put to work. “We don’t sit there and hold data on people,” says Kelly. “We utilise the internet, email and SMS messaging directly from our system.” For example, when Cleanhome allocates a new cleaner to a client, it can send the cleaner a text with all the details on the customer and appointment with the single press of a button. “That saves ten minutes of talking to the cleaner on the phone whilst she scrabbles around with a piece of paper,” she says.
And this goes both ways; the real-time data provided by Genesys, Cleanhome’s bespoke cloud system, allows on the spot insight. “We can log on and we can see all of our franchisees by month, by income, by client, see who’s growing and see who’s not,” says Kelly. This means that if one franchisee is outperforming their neighbours, Cleanhome can reach out and find out if there is any competitive insight that can be shared with the network. Similarly, if one franchise seems to be under-performing, it can reach out and offer additional support. “That’s a direct result of having cloud-based data,” she adds.
Clearly there’s a strong case for franchises adopting cloud solutions. But, historically, not everybody was sold on their benefits, with questions of security being a sticking point. Fortunately this has shifted in recent times. “With the majority of customers, we explain to them the protections that we put in place and most of them are blown away by how secure it is,” Woodhams says. In fact, it has become commonly accepted that your data is probably more secure in the hands of a large-scale cloud company than it is in your own. “We’ve come an enormous way in the last three years,” he says. “People are actually far less concerned about it now.”
Before franchises take the plunge with cloud software, it is worth considering whether they are going to go with an off-the-shelf solution or something bespoke. Ellis says that proprietary solutions have rarely been able to keep up with the pace of development set by off-the-shelf solutions. “This means franchisees have started to question their real value,” he says. “More and more franchisors are happy to take off-the-shelf cloud solutions, even if it’s the same solution that their direct competitors are using.”
Conversely, Kelly feels using off-the-shelf can be tough for franchises with a long heritage because it will mean adapting their existing processes, something long-standing franchisees might resist. “They’re not only going to be trying to introduce new technology into that network but a whole different way of running their business,” she says. A franchise developing its own solution means it can create something tailored perfectly to its processes.
However, it may not be a case of either / or. Many off-the-shelf solutions can be tailored to a franchise’s needs without having to start coding from scratch; Ellis explains that the front end can easily be redressed and altered whilst leaving a lot of the fundamental, behind-the-scenes architecture in place. “It’s the best of both worlds,” he says. “They can customise the customer-facing pieces that reinforce their brand but not be bothered by the tasks behind the scenes.”
But regardless of whether you go bespoke or off the shelf, cloud software is definitely not something franchises can afford to ignore. “Rather than saying ‘why cloud?’, people are almost taking a ‘why not cloud?’ approach now,” Woodhams says. “The opportunity there is enormous.”