Standalone hotel accounting software lacks the broad integrations of ERP platforms
Charlie Fritsch · Partnering with an ERP as an OEM VAR-deal terms, code ownership, exit value impact? · Nov 9, 2022 · at 5:38
Charlie Fritsch, founder of Hotel Investor Apps, compares standalone hospitality accounting software to software built on enterprise resource planning (ERP) systems.
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“So in our world, in the hotel space, we compete with hotel-specific accounting programs, but they're not ERPs, and so they don't have a broad integration with lots of other software that you can take advantage of on an ERP.”
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More from Charlie Fritsch
Fritsch: OEM partners capture 70-80% revenue splits versus 40-50% for VARs
“Typical VAR split is fifty-fifty up to that. It actually, a value-added reseller may only get 40% of the revenue. Whereas original equipment manufacturer can get, oh 70 to 80% depending on volumes.”
Fritsch: Build accounting platforms on existing ERPs rather than from scratch
“An accounting platform is, is, ah, daunting to build from scratch, so look at building on top of an existing ERP.”
Fritsch: ERP OEMs own code and keep higher splits despite minimum royalties
“So, with an OA, being an OEM, you own your own code, you own what you create, but obviously you don't own the ERP platform Product. Ah, a value added reseller provides configuration and training, ah, and support on an ERP, but they don't generally write any or…”
Fritsch: Negotiate flat minimum royalty commitments with your ERP vendors
“You want to avoid escalating minimum royalties and have a flat minimum royalty of course and as minimal, as low as you can go”