Michael Allen is the President of Allen Management, located in Hampton, VA. Allen Management is a $14MM company that manages nineteen hotels in Virginia and West Virginia. The company was founded in 1977 by Lewis Allen, Michael’s father. The hotels are branded under the names Econolodge, Quality Inn, Days Inn and Rodeway Inn. Allen Management has a total of 1,300 rooms to manage.
Allen Management had been on a manual system for years that was used for purchasing, receiving and tracking. Though it had evolved through the 15 years of its use, it was inefficient. It didn’t allow him to track the company’s relationships with its vendors in areas like transportation costs, product costs, back orders, etc. Also, even though centralized purchasing was in place, most of the hotels were in remote locations, causing constant paperwork delays.
Michael realized he needed a more efficient system. When Michael began looking at software to integrate with his accounting software, FOCUS, an industry specific, customized accounting package, he was surprised that not may purchasing software packages are tailored to smaller companies. In his search, he also found web applications, but they were lacking in the back office functionality he needed.
What Michael wanted was a tool to track purchases and the flexibility to customize and integrate the software throughout all nineteen locations, each of which was a separate profit center.
Michael found Bellwether through the web. He called and asked for a list of hotels that used Bellwether Purchasing Software. He called that list, and decided that Bellwether Purchasing Management Software was what was needed at Allen Management.
The software has been beneficial in helping Allen Management control its costs. Prior to the integration of Bellwether Purchasing Software, Michael had no way to really track his vendor costs over a period of time. Once he did have that ability, he saw what he suspected – that vendor prices for products “inch up” over time. If there is no way to track purchases, companies keep paying more and more without even realizing it.
Michael has fully utilized the catalog function in Bellwether Purchasing Software. His ultimate goal is to have two to three vendors in each product category. The catalog currently contains 300 items, and while it has taken some time to put this all together, the benefits have been well worth it.
All basic centralized functions are built into the system, and he has “married” Bellwether Purchasing Software with FOCUS via the Accounting Interface Bridge. Information can now be imported to the general ledger. Within the accounting application, Michael can see what he has bought and how much he has spent.
Michael commented, “With this system, people can catch problems. For instance, if I question an order, I can find the answer immediately –not wait two or three days for the answer. It’s all right there in front of me.”
The next project, Michael says, is to integrate Receiving. “Now we get a copy of the PO and send it to the proper person. She/he will use that copy as a receiving ticket and will enter it into the Bellwether Purchasing Software. My goal is to have the general managers move away from the manual process and be able to access the information from their desks.”
Michael says that watching vendors used to be impossible; now, it is easy. Bellwether Purchasing Software can easily manage all the data flow, and this frees up time to look for competitive vendors.
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