JOSH DAVIS/BAYSIDE GAZETTE
Ocean Pines Directors last week discuss purchasing new financial software. After some discussion, the field appears to be narrowed to Northstar Club Management Software. A special meeting with the company is scheduled this Friday.

By Josh Davis, Associate Editor

(Dec. 13, 2018) A decision on new financial software narrowed on Friday, as the Ocean Pines Board of Directors appeared to rule out outsourcing through Legum & Norman, a regional subsidiary of the Associa corporation that manages 8,000 communities in the U.S.

Following that apparent decision at a board work session, the only other option being considered is buying Northstar Club Management Software and running the operation in-house, which was the original recommendation of a technology work group begun in 2016.

A special board meeting is scheduled for Friday, Dec. 14, at 8 a.m. in the Assateague Room of the Ocean Pines community center on 235 Ocean Parkway to continue the discussions. The meeting will include a presentation by Northstar representatives.

When the nearly two-hour work session began on Friday, Director Slobodan Trendic said he wanted to stay away from “single-source” or proprietary options for finance that he said had inflicted pain on Ocean Pines operations.

The association currently runs a LANSA system said to be highly customized. Consequently, finding software support has been difficult. In addition, the systems are outdated and unable to deliver reports in a timely fashion, the directors said.

“We need to decide if we really want to continue with that kind of a model,” Trendic said. “A single-source solution, in my mind, is not desirable, if for no other reason because we have had that kind of operation in place for years and we know the disadvantages.”

Association President Doug Parks said proprietary was something of a misnomer and didn’t really apply to Northstar.

“One could argue that anybody’s system is proprietary,” he said. “What we’re doing now is comparing a purpose-built environment to a custom-designed environment.

“LANSA is a development environment and they developed a system around that, which … ties you in to overhead for support that’s not going to be within your organization, so it’s an automatic added cost,” Parks added.

Among the remaining questions for Northstar is whether its systems could interface with existing software favored by department heads. That list apparently includes golf, public works and recreation and parks.

On golf in particular, General Manager John Bailey said, “The whole … issue is a little bit more complicated,” because the EZLinks program currently in use is also widely used locally.

“The package play issue and ease of tee times … that complicates the question about golf,” Bailey said, adding the question needs to be asked, “How does Northstar’s golf tee time system, for example, work in relation to what we need in this area?”

Tom Terry, who helped lead the technology work group, said not all of the department heads are going to be happy “with whatever decision you come up with.”

He said the work group, which included more than 200 years of institutional knowledge on software and financial systems, “went out to evaluate Ocean Pines” rather than explore different types of software. Requirements were then built into a request for proposals that eventually led to the Northstar recommendation.

“If you look at the report from the technology working group, it clearly states that there are internal processes within Ocean Pines that are old, ancient and have run their course – and that’s how they work today and those things have to change,” Terry said.

“In order to change, to take advantage of any new software that is state-of-the-art today, you have got to be willing to change the way you do things,” he continued. “Transition is painful … transition from an old procedure that you’re used to using for 20-plus years is not going to be easy.”

Trendic argued Northstar was a relatively new company and that Ocean Pines may be better served by bringing in an industry standard or “best in class,” frequently mentioning Microsoft Oracle.

Northstar, according to its website, was launched in 2003 and is described as “the premier Community Association Management Software Solution provider covering all operational and management aspects of running a community association.”

“There is no way, as an individual director, I would vote in favor of turning over our back-office operation … on a small, niche player, which is basically what this company is,” Trendic said.

Parks, meanwhile, said he had received an email just one-day earlier with a list of some of Northstar’s biggest clients. He said they included one association with 70,000 homes. Several directors said they would like to check those references and Parks agreed.

Other board members said they were apprehensive of the estimated $1 million price tag to implement Northstar, although Parks said the one-year cost was about $380,000. He said the $1 million figure being thrown around was based on a six-year estimate provided by the technology work group.

Legum & Norman was said to be far more costly, with some suggesting there was a reason for the wide differential.

Larry Perrone, a member of the budget and finance committee, said, “When you see a bid like that, it may be that they don’t want the work.”

Legum & Norman was added to the short list after several directors asked for an outsourcing option not originally explored by the technology work group. The company, known for managing homeowner’s associations, was approached and asked if there was a way to use only some of their services.

“To be kind, their response to the equivalent of an RFP as to what their software does and doesn’t do … was, in general, ‘Well, we’re not sure until we study you,’” Terry said.

“There are times that you don’t want a customer,” Terry continued. “In my personal opinion, the response that was given … was a statement: ‘We’re in the consulting business and the replacement of management business – we are not in the business of being a software provider to other people.’”

What’s more, Parks said Legum & Norman systems would require a desktop client to be “installed on every one of the computers that are going to access the system.” Northstar, he said, was system agnostic and cloud-based, and “much more efficient, much more effective and requires far less support.”

The debate continued, but several directors that previously favored Legum & Norman appeared to backtrack.

Trendic said he believed Legum & Norman had “a huge, one-time entry cost” and inferior technology.

He also evoked Terry’s earlier argument as something he had not previously considered.

“[Legum & Norman] are looking at us … as a sort of one-off,” he said. “To them, we are a customer that has some unique requirements that are outside of their usual offering. So … you’re now a custom project. That, in itself, is going to generate some expenditure.

“It’s really what we’re trying to stay away from,” Trendic continued. “I think what we want is what Northstar and the likes of Northstar are offering: cloud, web-based, standard, off the shelf, easy to maintain, easy to upgrade, easy to support – those are all huge plusses.”

“It seems like L&M truly isn’t an option, just based on their technology,” Director Esther Diller said.

“You guys have been talking about this for two years. I will say, the one thing Ocean Pines does well is we beat the crap out of every subject,” she continued. “I’m one of the ones who threw a kink into the Northstar thing … because I do believe – and still do – that outsourcing, in today’s business society, is a very commonplace thing, a cost-saving thing, and had to be explored before I could vote.”

At the same time, Diller said she understands the community’s frustration with the process dragging on, adding, “Believe me, I want to stop talking about it too – I want a decision.

“Let’s just wrap this up,” she continued. “I was really an initial fan of L&M and I will say that very publicly. I know Director Trendic [and she] had talked about it at length. But, I think L&M’s off the table.

“I don’t chase vendors for my businesses – it’s not my job to chase them, it’s their job to chase me,” Diller added.

“If you guys are comfortable, I’m comfortable with taking them off the table,” Director Frank Daly said.

Trendic said he was looking forward to hearing from Northstar’s references. He said he was somewhat torn “between going with a standard, leading back office” and letting Northstar “cover all the other modules that are related to our front office,” or simply adopting Northstar as an all-in-one solution.

“I’m kind of deferring my thoughts with this until actually I view the references and get their financials,” he said, adding the board should now “vet them out, at the business level, and make sure we are comfortable with them.”