Each week, we seek out expert advice to help a small or medium-sized company overcome a key issue.
This spring, Toronto-based Book4Time Inc. signed two of its biggest contracts yet.
The deals, with two major hotel chains., will see Book4Time’s cloud-based hotel and spa reservation software used to input and maintain reservations when someone calls or goes on the Web to make a booking. The software also allows clients to send out deals through social media.
The two contracts, coincidentally landed around the same time, will certainly give a big boost to the $3-million in revenue that the 25-employee company generated last year, says Book4Time's founder and chief executive officer, Roger Sholanki. The three- and four-year contracts will bring in several million dollars in revenue over that time, Mr. Sholanki says.
To fulfill the contracts, Book4Time has to provide round-the-clock call-centre technical support to the two chains, and is also required to send an employee, in person, to train hotel staff on the software as new hotels are built.
Mr. Sholanki's firm is committed to provide the support and training as soon as the first new hotels go up – both have locations opening in July.
Right now, Mr. Sholanki’s firm has nine employees on call between 8 a.m. and 8 p.m. ET, Monday to Friday, and between 10 a.m. and 6 p.m. ET on Saturdays to support other clients.
For these two clients, the company must now provide service between 8 a.m. and 8 p.m. – in each hotel's local time. With hotels scattered around the globe, Book4Time will essentially be on call 24 hours a day, seven days a week.
How the company can best provide this service is the big question.
Mr. Sholanki has been seriously thinking about setting up two international offices - one in Europe and one in Asia, likely the Philippines, he says.
A remote office – which would include the call centre and training staff – he says, would make it easier to understand local culture and language. He also thinks the two chains would appreciate the international presence.
However, he figures it would cost about $2-million to set up - and he might not be able to get it all together as fast as he'd like.
The other option is to create a 24-hour technical support centre in Toronto; he'd have training staff travelling from Toronto to hotels abroad.
Expanding the local office would make it easier to manage staff and quality control. He's not sure how the costs would add up – labour is cheaper overseas but he already has existing space here.
Just as important, he thinks it would be tough to find technical staff willing to work midnight-to-morning hours.
“This model works well for pure data-entry but it might be harder to find skilled labour that would want to work this shift.”
He needs to figure out which option makes the most sense, quickly.
The Challenge: Should Book4Time set up its 24-hour support in Canada or overseas?
THE EXPERTS WEIGH IN
Shane Lawrence, Toronto-based associate vice-president of sales and services at Toronto-Dominon Bank
He should either set up an office in Toronto or even consider outsourcing the call-centre work. If all he needs to do is provide 24/7 service, than he can outsource that right now to someone in the Philippines. Good luck setting up a new office [overseas]- it'll take six months to just work your way through the permit process.
As for people he needs to send on location, hire guys globally, train them in Toronto and then have them work remotely, either from home or in a shared office space. He needs to consider what will happen if he loses the contract [eventually]. He needs to scale up as cost-efficiently as possible.
Michael Denham, Toronto-based president of business consulting firm Accenture Canada
I would not recommend spending $2-million on international offices. I say that for two reasons. These hotel chains are spread out all over the world, so it's not like picking a single international location will do much. He won't minimize travel and logistic hassles. Also, for small companies, culture is important and he needs to have people located near the founder and top team so that they become part of that culture.
What he can do is scale up his call centre here first. Hire 15 or 20 people and then, as he grows, work with an outsource partner. Master the 24-hour, seven-day-a-week service and he'll get a rock-solid understanding of what he needs to do if he does want to eventually open an office. He'll also be able to do it more cost-effectively. For the on-site visits, he should consider partnering with another company that visits these hotels anyway, like an IT company. Train their staff on his software – he'll have to pay a fee to another company – and then he'd have a more local presence.
Steven Jast, founder and president of Montreal-based ROI Research on Investment Inc.
We've faced similar issues where we've won international contracts and needed to have feet on the ground in those jurisdictions. He can't do everything remotely – there's a certain quality of service that can only be delivered by local experts. So he needs someone knowledgeable about local business customs. For the people who will be doing the face-to-face training, they could work out of their own office and you might pay them a premium to use their facilities. Or if it's just one or two people, you could rent a shared office space.
For the back-end stuff, like his call centre, it's better to keep it local. I have better control over productivity, efficiency, hiring and training. It's hard to monitor people overseas and in different time zones. We try and do as much background stuff as we can in Montreal , and try to give whatever tools and intelligence people overseas need from our local office.
THREE THINGS THE COMPANY SHOULD DO NOW
Expand the local office
Scale up the local office. It's cheaper and easier to manage a local centre than opening two new offices overseas.
Hire technical employees overseas who can be trained in Toronto, then work remotely from home or a shared office.
Partner with another firm
Team up with another firm that already must visits these hotels. Train this company's staff and then send them on face-to-face meetings.
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