2009 is a year to work on things you can control and tread lightly on new ventures. It is not a time to sit on your hands, but it is also not a year for taking great risks.
In the current economy, management companies of all sizes are looking for ways to increase the net operating income (NOI) of their portfolios and are working to improve internal operations.
Software tools are available for basically any process you want to improve, whether it is budgeting, purchasing, portals/Web sites, marketing, screening, document management, revenue management, or compliance. There are even tools emerging to support green initiatives.
Utilizing current application
But before you look outside for new tools, look at your current core software application to make sure you are using it to its full capability.
In the past five years, competitive property management firms have transitioned or migrated to advanced software platforms. While these software implementations can be time-consuming and distracting, they are definitely necessary to reap the benefits of emerging technologies. Having access to real-time information, and providing executives with the ability to pull information from advanced reports, enables firms to make better decisions.
Even though significant resources may have been expended to implement new software, often only a portion of the functionality is being utilized by the property management firm. Modules purchased in the past may never have been implemented. Executives should look back over their licensing agreements and make sure they are fully utilizing all the modules, reports, and functionality available in their core applications.
Having said that, this is also a great year for companies to look beyond their core applications and consider the competitive value of the new tools emerging in our industry. There are many ancillary products available in the marketplace that can directly impact and improve the bottom line.
Providers of these ancillary products are solidifying a client base and have vastly improved their integration tools to maintain a position in the marketplace due to increasing competition from core application providers such as RealPage and Yardi.
One of the tools finally gaining ground is revenue management software. There are approximately 3,000 apartment communities utilizing revenue management to adjust rents based on current market conditions.
Revenue management solutions include Lease Rent Options by Rainmaker; YieldStar Price Optimizer by RealPage; and Yardi Systems is now off ering a package for their clients.
Significant sustainable revenue gains from 2 percent to 4 percent are being experienced by the early adopters.
Utility billing software is another product that directly impacts the bottom line of a property's monthly NOI.
There are many providers in the marketplace, but only a few offer fully integrated billing with core applications.
This functionality is important because without integrated billing, small balances at the beginning and end of lease cycles are lost, adding up to a lot of money at the end of the year. Up to 6 percent of utility billing revenue can be lost annually.
Another emerging tool is the purchasing/ procure-to-pay systems such as OpsTechnology, recently acquired by RealPage, and Site Stuff, which is offered by Yardi Systems.
These programs can remove the need for paper invoices and decrease the need to store, sort, and mail printed invoices. Centralized invoice processing can automate purchasing through online catalogues and approval processes; cut invoice handling cycle times; and enforce more consistent processes throughout an organization.
For affordable housing management companies, now is the time to improve procedures and workflow and to utilize document management solutions for paperwork processing. It is becoming more and more burdensome for a property manager of a tax credit property to be in charge of all compliance.
Many firms have outsourced this function to one of the many small providers throughout the country. Additionally, workflow tools are being developed to streamline compliance processes and take the responsibilities out of the hands of the site manager. Software providers offer document management tools to assist in this effort.
The final item is outsourcing. Many large commercial firms have outsourced payable processing and software application support. Although this may not be feasible in many areas, it may be the best option for firms that do not want to spend time, money, and resources on their current infrastructure.
The key to successfully using technology in 2009 is to fully utilize your core applications, look at new products and services being off ered to the industry, and consider outsourcing burdensome functions.
Keep in mind that the single greatest productivity increase is to eliminate redundant systems and double entry by making sure your core application and any ancillary tools are fully integrated.
Georgianna W. Oliver is founder and CEO of EverGreen Solutions. EverGreen Solutions is a national technology consulting fi rm serving the commercial and multifamily real estate industry and has worked with approximately 200 companies to implement software and increase effi ciencies. For more information, visit www.evergreen-solutions.net.