John Hugo, senior vice president & corporate controller at Life Time Fitness, took the company public and private. In between that 11 year run, Hugo has acquired a taste for cloud computing applications and how it can connect disparate parts of a sprawling business.
Life Time specializes in high-end health clubs that offer multiple services. Hugo also represents the latest technology spending trend---business line executives who pick their systems because they have their own budgets.
To Hugo, consolidating on a cloud enterprise resource planning system made the most sense. Life Time in 2007 started talking to begin using Workday for human capital management and ultimately rolled out the company's financial software between 2012 to 2014.
Previous systems worked together, but "it became hard to train accountants on them," said Hugo. As a result, a single cloud system made the most sense.
We caught up with Hugo to talk shop.
What the cloud enables. Hugo said that Life Time has a younger workforce in the clubs with an average age of 23 to 24. Most of these health club workers are mobile and expect a consumer experience with their work tools. Aside from the back-end operations and innovation reasons for the cloud, a modern user interface can be the biggest win. "We have to have the flexibility," said Hugo.
How the tech spending is split up. Life Time has an interesting arrangement where tech spending is split up between business leaders, finance and IT. For instance, Hugo oversees a business process team with 5 people. Hugo's group has decided to bet on cloud and Workday. "These individuals focus on payroll, accounting and a better way to process transactions," said Hugo. The tech budget for the business process team is an operating expense and part of his budget. The effort now is to look at cross Workday modules that can tie analytics together.
- The Salesforce contract falls under the sales and marketing teams and business operations. Hugo explained that there are interfaces connecting to his systems, but there's not a tone of overlap.
- Traditional IT, which has 150 professionals, supports hardware and software at the clubs and increasingly application development and mobile apps. IT is still responsible for security and connecting the company's units through technology, but recently moved from the CFO to the CEO. As a result, IT is now seen as a way to develop member support with member friendly apps that reach them on multiple screens.
What won't go in the cloud yet. Life Time has a data warehouse project, but hasn't considered doing it in the cloud. The data warehouse will be under the CFO and operational team. Life Time's overall goal is to connect data on customers and potential ones. Most systems on premise are rolling into Workday, but there still needs to be sun setting to go more cloud.
The business moving parts. Life Time is unique among health clubs in that it owns most of its facilities and builds them to spec in a three year process that covers construction, design, real estate and then operational handoff. Most of the clubs are 115,000 square feet for facilities without tennis. In those clubs are spas, cafes, restaurants and health club gear and services. Life Time also manages sporting events. "We have about 116 clubs with 7 businesses and 800 department heads," says Hugo. Each of those businesses have their own accounting and technology needs. "The tools are specialized," said Hugo. "For instance, cafe and spa point-of-sale systems were designed just for that," said Hugo.