Technology has become an integral part of almost every aspect of hospitality, including accounting and professional services. M3, a software-as-a-service company that helps drive financial performance for hotel owners, operators and managers, has been at the forefront of the industry's push to advance technology into the cloud.
The company’s top service for hoteliers is its accounting software, which gives hoteliers a general ledger, an inventory module and accounts-payable system that, M3 President Allen Read said, also can produce a profit-and-loss statement.
M3 Professional Services, meanwhile, handles everything from a la carte bank reconciliation to invoicing, full accountancy with profit-and-loss statements, working papers and tax filings. Insight, its business intelligence tool, offers analytics and big data services, while the time-management system helps team members maximize efficiencies.
Early Days
The company first took shape in the mid-1980s as the accounting arm of McKibbon Hotel Management. “They did accounting for themselves,” said Read, who joined the company in 1990. But as the millennium approached, the company faced a challenge: “Things weren't going to work. DOS programs weren't going to work,” Read recalled. “We knew we had to redesign our product to work past Y2K.”
In the late 1990s, the team opted to rewrite the program—and to then market it to other hotels. About halfway through designing the new program, a designer alerted company chairman John McKibbon to the potential of the internet and suggested that businesses could be run online in the future. “So we actually stopped development and redesigned everything to work in the internet world,” Read said. “We set up our own private cloud.” The team decided to become a software-as-a-service company, but this proved challenging in different ways. “When it first came out, my biggest challenge was going around and convincing people that the internet wasn't just a passing fad,” Read said, highlighting the dot-com bust of the early aughts.
Convincing hoteliers that storing their data outside of their four walls was another hurdle Read had to overcome. The team would bring potential clients back to the office to demonstrate the data center they ran. “[We showed them] how we were backing it up, how it was more secure in our data center than it was at their office [where] they might be backing up to a floppy drive,” Read said. “We had a very solid data center and a well-designed system, and usually when most people came, when they saw what we were doing, then they understood.” Once hoteliers understood that they could access their data from anywhere, he added, the decision became a “no-brainer,” although it did take years to convince some clients to sign.
M3 stands for Third Millennium, Read said—but people regularly misspelled Millennium. The team decided to go with M3 as a name and change it later. “And it just stuck the whole time.”
Software as a Service
As the company evolved beyond accounting, M3 developed Insight, a business-intelligence tool that works as a dashboard system in data mining. “It presents all their relevant information, whether it be a budget forecast to how they're doing on a web page. They can log in [and] they can see what they're doing.” To help hoteliers manage labor more effectively, the company also has a system for time management. “We created a time management product that allows them to benchmark their labor,” Read said. The program can calculate how long it takes a housekeeper to do his or her job and knows the difference between refreshing a room during a stay-over and a complete clean.
Earlier this year, M3 launched its DataOps and Business Intelligence corporate divisions in a bid to focus on new technologies. Read expects one of the company’s biggest growth areas to be in professional services, with accounting as a service gaining ground. The company also has a presence in Canada, Central America, the Caribbean and Europe, and Read expects further international expansion coming up.
Today, M3 serves nearly 950 individual customers with more than 6,700 active hotels, including Sage Hospitality Group, Stonebridge Companies and Hostmark Hospitality.
Perhaps most notably, the company has not increased its service prices in almost two decades. Rather than raise rates, Read said, “I go out and get new customers. That's where I get my new money from.”
Clicking with Clients
M3 has been a cloud company since its inception, Read said. As such, it’s “in our DNA to be able to talk to people remotely. We're constantly in communication with our employees and our customers.” The company also has customer success managers who go out and talk to customers and ensure that M3 is meeting their needs. If we're not, [they] connect those people to the right person at the company to help them and to give them best practices [and] ideas.” M3 also hosts monthly webinars with customers that allow them to talk to each other and share best practices.
Logic in Logistics
M3 has maintained regular communications with employees, Read said. “We have an all-hands meeting once a month for our employees where we communicate via GoToMeeting and we let them know what's going on, what's coming up and how the company is doing. We open it up for an answering questions session. It'll be myself, John Mckibbon, all my executives will be on the call so they can answer those [questions].”