Technology titans talk the talk: top executives discuss new tech trends--and how to avoid investing in fads.
Top executives from the leading providers of multifamily technology solutions responded to questions about these challenges and innovation overall during a 90-minute discussion moderated by Bill Wollinger, CAPS, SHCM, President, WinnResidential, at the NAA 2010 Education Conference & Exposition in New Orleans in June.
Following are highlights:
Q. How can solution providers help justify owners' technology investments?
Bateman: The decision-making process is complex. You can't monetize the total value you get from a piece of software in terms of your bottom line. There are certain technologies you need to have. Resident portals and the ability to lease online are a direction that our industry is moving toward. Other new products are unproven and their ROI is unknown. The best way to evaluate new technology is to start with a few properties and test things out.
Post: At the end of the day, the single most important thing is having the right level of transparency in the cost structure. Technology must either drive up additional revenue or drive down expenses. The business needs to drive the technology, and you can't adopt technology simply for the sake of new technology.
Winn: If you have to spend months or years evaluating the return of an investment, it means you're investing in old technology. And the cost to evaluate such technology is dramatically decreasing. You want quick analysis, self-provisioning of technology and quick evaluation.
Yardi: The best thing a solution provider can do is demonstrate that their products will pay for themselves by doing what's important to the client: attracting prospects, retaining residents, enhancing operational efficiency and increasing revenue. The solution provider might also want to consider how a company wants to position itself; if, for example, they consider themselves a "green" company, the provider might demonstrate how a paperless invoice processing system can promote sustainability.
Q. How do you avoid investing in fads?
Post: You can't get caught up in it. The key is to look for critical mass and to truly do the right level of market research. Look at how your consumers (residents) are acting versus what they say they are doing. It's also important to look at how your residents are acting in-house versus as prospects. Surveying on the back end is a better indicator of technology's worth and popularity versus prospective fads.
Bateman: You need to have a property that is on the bleeding edge that you're willing to test things on. There's reluctance with new technology because no one wants to be on the bleeding edge, but if you wait and wait, you'll be unprepared when that shift happens.
Winn: Measure, measure, measure. We do a lot of measurement at RealPage. We try a lot of things, but before we begin we ask, "What is the measurement of success?" We don't deploy any major systems until they have been tested and measured. If you measure, you'll make intelligent decisions. Once we have that data, only then do we roll out a product.
Yardi: You have to listen to your clients, communicate with them, and stay focused on developing technology whose capabilities will help meet their business objectives. Clients make technology investments for long-term gain, and focusing your attention on products that deliver lasting value is the best response to that priority--and helps you avoid succumbing to fads.
Q. What are new technologies and trends to consider?
Bateman: Search-engine marketing. The companies that are doing it don't want anyone else to know how well it works. Another one is mobile participation. There's a large shift in the way people consume Web-based content and the advent of mobile technology is going to rock our industry. Although I have to say, I think iPhone apps are kind of ridiculous.
Post: The trend is toward greater centralization and control of processes and the aggregation of data. Things are coming back to the home office.
Yardi: The start of each decade since 1980 has followed the same set of trends: Financial crisis, followed by a recession and then technological innovation. 2010 has seen the start of a similar pattern. Right now innovation focuses on mobility--from the iPad and iPhone to social media. I feel excitement when I think about these new trends.
Five years from now, what will we see as an industry?
Post: There will be a focus on statement and deposit processes. There's also this new concept of the lifetime value of a consumer. Companies will quantify profitability for each resident and develop an archetype of the most profitable resident.
Bateman: I believe the next big transition will be somewhat invisible. A massive evolution in technology will occur over the next 10 years. The quality of the architecture of your database will translate through to your interface.
Yardi: Internal IT facilities, systems and personnel will be significantly
downsized over the next five years. Multifamily housing providers seeking to control costs, manage IT-related risks, and sharpen focus on their core business will outsource most or all IT applications, services and physical infrastructure.
Winn: Over the next five years there will be a move to cloud computing and no longer will there be a large server room or the costs that go with managing a technologically-secure infrastructure. The trend will be outsourcing an infrastructure to cloud computing.
Yardi: Revenue management will be adopted substantially, as multifamily housing providers look to maximize revenue by adopting systematic pricing methodologies. There will also be risk-adjusted pricing of units based on a prospective resident's credit rating. With the quality of applicants' credit still recovering from the economic downturn, the question of whether rent should be adjusted based on how well a renter meets certain requirements will come into play.
Anant Yardi, President Yardi Systems
Steve Winn, Chairman and CEO RealPage
David Post, CEO MRI Software
David Bateman, CEO and Co-Founder, Property Solutions International
BY LAUREN BOSTON
Listen to the Session
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|Date:||Sep 1, 2010|
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