A test of fitness

The ever-increasing popularity of health clubs has brought challenges for UK club Fitness First to keep up with demand. Joe Devo reports on the company's IT expansion

Concerns over a decline in health have inspired thousands of Britons to leave their armchairs and jump on an exercise bike.

This phenomenon has had a consequential effect on the UK’s fitness industry and its gyms and leisure clubs.

Fitness First is no exception. The company started life in 1993 as a solitary club in Bournemouth, and has multiplied to 434 clubs in 15 countries.

For most employees on the Fitness First payroll, exponential growth means ever more customers demanding to have their body-fat ratio quantified.

But for Jon Wood, group IT director at Fitness First, the five years since he has been at the company have been about implementing systems that can adequately keep up with increasingly complex corporate needs.

Until Wood’s arrival, nearly all of Fitness First’s IT requirements were outsourced.

‘It was based on the premise that we are a leisure business, not an IT business,’ he says.

Encouraged by a software development background writing financial and distribution systems, Wood decided to bring control of the company’s IT in-house, sparking a search for a software supplier able to match Fitness First’s needs.

The company wanted a vendor that was able to automate its billing systems and integrate back-office functions with front-office customer relationship management requirements.

The provider also needed to be able to demonstrate a capacity to keep pace with expansion. But Wood did not even produce a shortlist.

‘The leisure market was surprisingly poorly served by appropriate vendors,’ he says.

‘When we started researching five years ago, we were looking at a legacy system or vendors not necessarily able to match our requirements – which was about 300 clubs at the time.

‘A number of solutions were functional but not scalable. We needed someone who could support us internationally, but there just wasn’t anyone.’

The dearth of suitable suppliers had already prompted super-sized US group 24 Hour Fitness to successfully implement a bespoke system. And Wood was clear that his organisation had to adopt the same strategy.

It was a decision that prompted a thorough review of the business, to standardise processes across the group and ensure reorganisation ahead of future systems implementation.

‘You need to understand processes, and understand that the systems fit the business,’ says Wood. ‘Often, you can find that the process is there because the system is compromised in some way, or because it has always been done that way.’

Business review, says Wood, offers a great opportunity to ask whether a process is working, or whether it can be improved.

‘The three tenets we have focused on have been maximising revenue, improving efficiency and reducing costs, plus improving member experience,’ he says.

‘Without that focus you could end up with an IT system that leads change, which is fatal, or with implementation for the sake of it.’

Work on the project began 18 months ago. Wood and his team were armed with a multimillion-pound budget, based on projected return on investment from measures including cutting licensing costs, reorganising the business and improving marketing opportunities.

Wood makes much of Fitness First’s decision to eschew the usual step-by-step method of bespoke system delivery, which would include scoping, designing, building, testing and delivering.

Instead, he adhered to a set of extreme programming (XP) design principles that allowed the omission of often lengthy processes, such as documenting each stage of development.

‘This is still a very fast-growing business, with constant business change. There is a danger that, if you’re developing in isolation, when you come to project completion you may find a gap where the business has introduced change that has not been fed back into system development,’ says Wood.

‘By introducing XP methodology, we always knew there would be sufficient flexibility to allow us to update the systems in line with business change. XP allows you to identify and capture change, and put an embargo on change where there is no concrete return on investment.’

XP was recommended to Wood by one of a handful of contractors that Fitness First brought in on long-term contracts to augment his in-house IT team,

additions that have brought the total number of IT specialists employed by the company to 15.

Having his team employed directly, even on contracts, was vital to Wood.

He argues that the use of external consultants could stand in the way of maximising business benefits that require expertise on the ground.

But he makes an exception on the use of external support in assessing his company’s ability to prevent security breaches.

As the new Fitness First system goes live, Wood plans to bring in a third party to perform penetration testing.

‘They will be testing every part of the system to make sure each one is resilient and secure,’ he says.

‘We feel that this is one thing appropriate to taking out of house, because

we want a third party to make sure we have a secure network. If you try to police yourselves, there’s a real chance you will miss something.’

Aside from planning, developing and testing new systems, Fitness First has also been active in updating its existing networking arrangements, particularly in the UK, the company’s largest operation.

Two years ago, UK infrastructure consisted of small peer networks in each club, and offered little more than email communication to the company’s Bournemouth head office.

But the addition of an ADSL wide area network now allows all clubs to communicate with each other directly, and has enabled the introduction of a company-wide intranet.

The intranet hosts elements such as purchase order processing systems between clubs and head office, as well as an online database that records the findings of new members’ health checks.

And using technology to effectively deal with members’ physical condition is a key priority at Fitness First.

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Priority networking project

Roughly five years in the planning and nearly two years in development, Fitness First’s new global IT system pilot starts in The Netherlands this month.

Full implementation is scheduled for the end of May. If it is successful, rollout in Germany will start in June, again with a pilot project.

The company is deliberately starting a worldwide rollout – planned for completion by the end of 2006 – in two smaller and newer markets, where business processes are well documented and data convergence promises to be far less of a headache than in other parts of the world.

Jon Wood, group IT director at Fitness First, says the biggest challenge is data conversion, pinpointing the issue of ensuring that data held on legacy systems is fully transferred onto the new system.

The risk of losing customer data, which would undermine the company’s reputation and threaten billing revenues, worries Wood.

‘The membership aspect of the project is absolutely business critical. There is always a risk because we have data records going back 10 years,’ he says.

‘We have to achieve a successful data conversion, but in a timely fashion because we have two to four weeks in every club to complete the data conversion so as not to affect the billing cycle.

‘We will have to put together some strong no-go criteria before implementation, because once you have started there is no going back.’

He adds: ‘We need to be sure that we will be able to bill exactly the same amount on the new system as we have been billing on the existing system. If we can tick the boxes, we can go; if we cant, we won’t.’