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As the the annual NMHC/Multihousing .com Apartment Technology Conference approaches, (November 7-9 in Houston, Texas), now’s the perfect time to look at what onsite management and corporate officers can expect if they attend.
As with past years, finding better ways to manage apartments–increasing revenues, managing expenses more effectively and providing better customer service—continues to be a top priority for today’s apartment executives.
The Chief Information Officer and Chief Technology Officers (CIO/CTO) work toward changing business processes and finding the right technology. These executives seek the right platform and suite of applications offered by property management software firms.
Today’s automated systems run the gamut from the marketing and leasing process to automated check and rent payment systems to automated resident credit checks and screening to resident maintenance processing.
Everyone from apartment owners and managers to management consultants and application software providers themselves, agrees that migrating from older legacy platforms to today’s web-enabled systems remains a lengthy process. Additionally, it’s still about managing apartments away from delegated management expertise toward more centralized oversight, policy management and control. Today, larger and mid-size firms, and third-party management companies, are more about efficiencies than delegating to site personnel. Leasing units, collecting rents and performing maintenance are still the most critical functions at the property, but how these activities are implemented is much more important to today’s owner.
LEASING. TECHNOLOGY IS EFFICIENT, BUT CAN ALSO BE MORE WORK.
Today’s automated systems at the property level run the gamut: marketing and leasing process to automated check and rent payment systems; to automated resident credit checks and screening to resident maintenance processing. Take the leasing process for example–systems automation can influence just about everything: how apartment information is posted on the Internet, how lease and leads are managed, provide real-time pricing, unit availability and support on-line unit reservations, and even online leasing.
In today’s world, it’s plausible for the leasing agent to never speak to or be directly contacted by a prospective resident until the resident’s application has already been submitted and approved. In fact, a leasing agent will often be contacted by someone other than the prospective resident if a contact center or system is used to manage lease inquiries. Thus, keeping Internet Listing Service (ILS) information up up-to to-date could be more crucial to closing a lease than the traditional sales process, as the information a prospect finds on the Internet is key to their decision to lease.
Another side of leasing automation is the oversight of the entire transaction process. We can measure the process to close leases, which units move more quickly than others and inquiry traffic by unit type.
Better information about a resident’s background and credit quality should—and often does—lead to improved efficiency for the leasing staff and lower collection costs. Using lead management and/or call contact centers to process potential resident inquiries and providing real-time data to Internet listing companies can improve staff performance and help them be more effective employees. However, these new automated services and applications place new —and in some cases, greater greater—requirements upon the site personnel. Even with integration among applications to collect and share data, the emphasis on “maintaining data integrity and control” at the site level has become as critical for the sales force as closing a lease used to be with the resident. And site-level leasing personnel must become even more responsive, as they are being monitored and even evaluated in ways that even a few years ago were not even feasible.
In theory, having more efficient systems creates more time to show units and to follow-up on leads. The down side is there are more leads and leasing personnel have more people looking at their performance not just monthly, but daily or even in real time. These same people are also managing the automated lease management, lead management/call center systems, (some integrated and some not) with the property management system. The amount of oversight of their business is much more comprehensive than ever before.
“Multifamily is beginning to understand that the true opportunity in adopting web-based property management systems comes from modifying business processes,” says Dennis Smillie of Multifamily Solutions, Inc., consultant to owners and software providers. “To take advantage of the capabilities these software platforms offer, they (apartment owners/operators) should not try to force changes in the software to meet current business practices.” This is why more apartment companies are evaluating their business processes either before they embark on a web-enabled system or are making change management a part of their deployment process.
ROI IS RELATIVE TO BUSINESS PROCESSES
Consider the owner of many apartment communities in multiple states who has decided to move to a more integrated property management system. They want to have greater understanding of how business is being conducted in real-time and a web-enabled system is going to help them get there. But is the cost and hassle of new procedures worth it? The answer depends on what systems they choose to deploy and their objectives. If you want greater control and a more consistent, centralized approach to property management, then your return will be high and you may even be able to place quantifiable results on the investment.
Considering activities with the most direct return may not be the migration from a DOS or Windows™ desktop system to a basic web web-enabled system versus a DOS or Windows™ desk top system.. Instead, it may be improved front front-end marketing –improving the interface with the ILS and print media. These costs present an opportunity to measure improvement in terms of leads, applications, leases and the bottom line revenue stream. Other similar applications would be resident lease services, where there is revenue stream and in some case sharing with the technologies.
Many CIOs/ and CTOs will argue to top management that migrating from desk top management systems to web-enabled systems will have the greatest productivity gains and allow front and back office gains. The exact measurements are more elusive. While web systems allow real-time data transfer and enhance report functionality, and month-end closing, not to mention supporting a change to a centralized management program from a property based approach; it’s more difficult to quantify return on investment (ROI). Other areas in this category include the deployment of automated resident screening and systems to manage leads and resident service requests. Again, these bring effeciencies to the business process, but it will take time to quantify the investment. Additionally, unless these systems are truly integrated and allow for data exchange among property management systems, some of the business process enhancements can not be fully realized.
DEMAND FOR WEB-BASED TECHNOLOGY
There’s much discussion about the benefits of automation and use of information to improve apartment industry business processes. Some question the demand for new management systems, noting that the return on investment is either not high enough or too difficult to quantify. There is no statistical information and no real data exists to determine the extent or future deployment activity of web systems. The incentive to migrate to web-enabled management software is still somewhat of a mystery. Yes, the new systems are better, but at what cost and are they really needed for every property owner/manager? That’s the next question as more REITs and large private apartment companies and management firms move to web-enabled systems.
In fact, the companies that support desk-top operating system (DOS) software, including those leading the web-enabled market, are not abandoning their DOS customer base. In fact, companies such as AMSI and RealPage, who have the largest number of DOS users, rely on this revenue stream, even as they invest in and bring web-enabled products to market.
The migration from desktop to web-enabled systems will take many years based on the following assumptions.
1. The apartment industry is large, but heavily fragmented. It includes large public and private apartment owners that make up less than 20 percent of the overall market and between 7-15 percent of the overall number of owners. It is possible that nearly 30 percent of the market will never migrate.
2. Larger owners and third-party management companies will migrate to web-enabled systems first since they have the greatest incentives and capital resources.
3. Smaller companies see less of a need for centralized control.
4. Companies that support the DOS products will provide support for their clients rather than lose these clients.
5. Smaller companies will expand their use of automation, but in areas that require less reliance upon integrated systems, such as resident screening and automated payments.
6. Smaller companies can not take the risks of migration and new technologies. Instead, they need to wait until the new systems provide proven technologies. This is supported by the number of companies that have migrated not to the latest web-enabled systems, but earlier versions that they consider to be more reliable.
7. The field of providers is still not proven–few web enabled software providers are producing revenues that support the products without other sources of investment or income.
THE OUTLOOK IS STILL BRIGHT
The expectation that the move to web-enabled systems will be a long-term process and that the business process changes create added work load would appear contrary to support for expanded business process automation. Not true. The reality is that as markets improve, and software applications mature, there will be continued migration and expansion. Also, there are trends that support greater use of system automation. One is a work force that is younger and more attuned to automated systems and a customer base that is more automated than ever. Another supporting factor for a bright future for expanded system automation is the ability to quantify the investment with each passing day that these new systems are in place.
Finally, consider that just a mere three years ago, at the NMHC Annual Technol-ogy Conference, the outlook for online application processing, real-time unit pricing, reservation systems and online leasing was considered fantasy. Today it is a reality.
The apartment industry continues to expand its use of systems automation. Some will take longer than others and some will never make the leap. One thing is for certain, the interest in systems automation and technology is still as keen as ever.
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