When it comes to bringing new technology to a company, forget about taking the easy way out. "You have to do your homework," says Greg McDonald, director of telecommunications for Camden Property Trust, an apartment REIT based in Houston. "There are no shortcuts."
He should know. In the first half of 2005, Camden rolled out Web-based property management software to more than 200 apartment communities, an effort that was immediately followed by the implementation of revenue management software at the properties. Camden has also made significant investments in computer hardware and networks to support these new programs.
Such initiatives represent massive efforts for multifamily tech execs such as McDonald and others, who are not only involved in the technology itself, but also in the company's efforts to educate and persuade employees and others that yes, the suffering caused by adopting new software will be worth it in the end.
In this edition of Conference Call, McDonald, D. Thomas Figert, director of information technology for BH Management in Dallas, and Dan Haefner, CIO of Atlanta-based Lane Co., discuss their strategies–and the challenges they've encountered–when managing technology-related change.
What are your company's current priorities as far as technology?
GREG MCDONALD, CAMDEN PROPERTY TRUST: We're on the leading edge [with technology]. To remain competitive, we have to provide the best tools [that allow our company to achieve that], and technology is certainly one of the driving forces behind that.
D. THOMAS FIGERT, BH MANAGEMENT: One of my mandates when I started at BH was to reduce the amount of time that our on-site associates were spending on computers and increasing the amount of time that they were spending with residents and prospects. Another priority is to provide appropriate software tools for our property managers for reporting and monitoring.
DAN HAEFNER, LANE CO.: Technology is probably the number one priority as far as Lane is concerned. We had a lot of legacy software and systems in place until a few years ago, and given that we are a fee-management company, we now think of our software as a way to differentiate ourselves from the competition.
What percentage of Lane's portfolio is fee management?
HAEFNER: About 75 percent. Technology has been a top priority for us during the past two years, because it allows us to realize economies of scale, improved communications, and the elimination of redundant processes, which translates into improved profitability.
FIGERT: Dan, with 75 percent of your portfolio fee-managed, do you find yourself in the position of doing a lot of consensus building with different owners when you want to deploy a different technology? I would think you'd have a huge sales job on your hands.
HAEFNER: It has been a huge sales job. It's easier now that we can go back and show the value proposition. But it's still a difficult task, because you will encounter owners who are extremely focused on the expense side and feel that some, if not all, investments in technology should be inclusive in your management fee. You have to make a decision internally whether or not you want to press that issue or whether it's worth absorbing those technology costs.
How have you worked with executives, on-site staff, and fee management clients to gain their support for new technology?
MCDONALD: We don't have to sell [a program] outside the company so much, but we do internally. You cannot throw something out there and say "Here's how it's going to go." You need to explain what you're doing as a company and why [so that people don't think] "they're just changing out the system to make me miserable." We spend a lot of time training and educating folks about why we're doing this and how it makes us competitive as a company, which also means they'll have a job for a long time, with the opportunity to make more money and grow in their careers.
FIGERT: [With our property management deployment], we included our executive staff in the process, and they really felt like they were invested in our choice and our strategy [for executing it]. It's not enough any more just to have a good tech background; you also have to have business savvy, because you have to communicate effectively with people at all levels.
HAEFNER: As far as our employees, we typically try to involve one or more persons from each functional area that will be impacted by the implementation of a new program: accounting, IT, asset management, property management. Regarding our clients, we probably haven't done as effective a job as we could have. In the fee management world, it's a lot easier to be behind your clients than in front of your clients, because you often are more reactionary to their needs. ... Most of the communication happens around the budget process for clients. Trying to do something mid-year that involves a substantial expenditure is usually more difficult since the budget has already been established.
Many people have said that with large IT projects, it's essential to have a top executive on board. How do you accomplish that?
FIGERT: The best way to get buy-in from top executives is to include them in the process. We did this from the very beginning, when we broke our property management software implementation into bite-size pieces that involved converting 10 to 15 properties per month. We went so far as to let executives pick which properties got converted when. [As a result,] it's a lot easier for our president to sell [an initiative like this to a joint venture partner] because he really believes in it and helped form the strategy.
How do you connect with a top executive who may not be that interested in technology?
FIGERT: Just speak the language of business. That's the one thing all executives have in common. ... You'll need to simplify the technology and put it in terms that everyone can understand, but it's the equation of that technology to the business that matters, i.e., "How does this help me lease apartments?" Once you can articulate that, it's a lot easier to get executives, particularly in real estate, engaged.
HAEFNER: If you can show a positive return on investment, most of them gain a very quick interest in technology.
How do you bring other employees along? What are their questions and worries?
MCDONALD: The list is miles long. "Is it going to be slow?" "What happens if the Internet crashes?" "How is this going to affect my life and my job?" We created a FAQ list with answers for them. We also have a business support center they can call for support.
After a big implementation, how soon until you start seeing opportunities to redeploy people?
MCDONALD: You could almost set it with a stopwatch. There is a little bit of a learning curve where they get familiar with the systems, but it doesn't take very long to realize efficiencies and redeploy resources to concentrate on our customers.
HAEFNER: They can do more of the things that we want them to do. They can work with marketing the property, signing leases, and taking care of residents versus staying in the back office buried behind a stack of power bills.
Should tech roll-outs happen fast or slowly?
MCDONALD: That's a double-edged sword. It's never fast enough for some folks, and it's never slow enough for others. You do it as fast as you can reasonably manage the process. After the pilot phase, we took a fairly aggressive approach (30 communities converted each month) for rolling out our Web-based property management software, but not at the expense of totally disrupting our on-site folks. There is pain involved in change, and maybe there is some benefit in getting it over with [as quickly as possible], but that's not how we look at it.
HAEFNER: Both ways work, everybody has a preference, and it's painful either way. Our approach has been the exact opposite of Camden's–we're hyper-speed.