As the multifamily industry's use of Technology evolves, information Technology (it) professionals are Evolving just as quickly, playing an Increasingly strategic role in an Apartment company's growth.
Indeed, IT is no longer the domain of the purely technical—it's not just about keeping computers from crashing and servers humming along smoothly. Today's tech professionals need a holistic understanding of the business at large as they work in concert with CEOs on setting a course for the future.
“We're working much more closely with the business units than we ever have before,” says Ken Hodges, vice president of IT at Irvine, Calif.–based Western National Group. “The chief information officer [CIO] is moving away from the pure technical experience that was required 10 years ago to a more rounded understanding of how technology marries with the requirements of the business."
Advances in IT have made it possible for small and midsized firms to level the playing field with well-heeled competitors. But for small companies seeking to meet this challenge, expanding the tech team and its capabilities can be a daunting task.
To gain insight into which key players should ideally make up a competitive tech team, Apartment Finance Today asked several industry experts to choose the most critical technology-related positions every multifamily firm should fill. And while CIO is an obvious choice, the other three roles to consider—marketing manager, revenue manager, and training manager—illustrate the growing degree to which the fingers of technology are on the pulse of a company's very foundation.
What's in a name? Many multifamily firms have different monikers—CIO, chief technology officer, vice president of IT—to describe the role of their top technology decision maker. But no matter what you call it, the position continues to morph in lockstep with the technologies it manages.
Some of this change is being driven by cloud computing. In a nutshell, cloud computing is the delivery of a technology as a virtual service rather than as a company-owned product, provided online rather than through in-house hardware or software.
A popular example of this Software as a Service (SaaS) model is spam filtering and virus protection. In the past, many organizations bought off-the-shelf software and installed it on each of their laptop and desktop computers. But Google's Postini service, accessible only as a virtual service, is a popular lower-cost alternative today.
Beyond SaaS, cloud computing also includes co-located data centers and hosting services, going well beyond spam filtering into areas such as e-mail systems, document management, archiving, and disaster recovery. And as more companies outsource more functions to the cloud, the CIO is no longer overseeing a corral of internal hardware and software but, rather, shepherding diverse systems far removed from the confines of the company's walls.
“The big change is you're now managing the relationships with the vendors, to get them to act in your best interest, as opposed to having more direct control,” says Chris Berson, vice president of information systems at Rochester, N.Y.–based REIT Home Properties. “It still requires the understanding of technology, but it's more about integration—how will our data move between these two systems; what's going to happen in between?"
Many large organizations have too much invested in proprietary or in-house systems to throw everything into the cloud. For instance, Western National has put some peripheral applications—including compliance-document management—in the cloud but keeps all its core systems in-house.
“If I were a start-up, I'd go 100 percent in the cloud, and I'd remain there,” Hodges says. “But if you're a large business, you're going to leverage the cloud for individual projects and systems, and have a hybrid between in-house and cloud systems."
THE REVENUE MANAGER
While most multifamily companies are costbased in their strategies—looking at expenses first— every firm needs someone to own the question, “How are we going to maximize revenue?"
And as revenue management software continues to gain adopters, the company revenue manager is becoming an increasingly techdependent role. “They have to understand the underlying math associated with how the results are coming out of the system,” Hodges says. “But they also need to understand operations."
Those who have already adopted revenue management software say it works best as a dedicated resource—that somebody must always actively monitor the system. And a large part of the revenue manager's position is communicating the software's results to the field.
But as the product matures and becomes easier to use, this centralized revenue management role may have to be reconsidered. The software's evolving ease of use, for example, may allow more of a democratic process, where regional vice presidents or teams become responsible for their own portfolio's rent optimization, Hodges believes.
At Home Properties, the revenue management platform falls under the company's property management group. “It's a good example of a service being provided by a third party, and yet it's still being closely managed by us internally,” Berson says. “It can really bring great benefit, but it is not, by any means, hands-off."
Most small- and mid-market firms haven't adopted the software yet, given its price tag and relative newness—the solution has really only been present in the industry for less than a decade, and the cost of a system from any of the major providers (think RealPage's Yield- Star or Rainmaker's LRO) is based on unit count, a structure that favors large owners. But many industry experts feel that widespread adoption is just a matter of time and product maturation.
“I do think it's going to become a more important part of the business, but it's very much in its infancy,” says Brian Donahoo, president and CEO of Goleta, Calif.–based SaaS provider AppFolio. “Multifamily operators in the mid-market space should invest in learning and understanding more about it right now, however, as they think about selecting revenue management solutions for the future."
THE MARKETING MANAGER
Just as the CIO's and revenue manager's roles are evolving, today's marketing manager needs to be much more tech-savvy than in the past.
A decade ago, the idea that a small firm's online presence could be every bit as comprehensive and gleaming as a REIT's seemed hard to imagine. But today, there's absolutely no reason why the online playing field can't be level. In fact, the IT and marketing divisions are working more closely together than ever before in many multifamily firms.
“One key to attracting a disproportionate number of renters is the quality of the online experience,” says Steve Lefk ovits, president and CEO of Emeryville, Calif.–based Joshua Tree Consulting. “Finding someone who's really good at looking at all the marketing channels and optimizing their use is a key skill."
While property websites and ILSs have long been the domain of marketing divisions, the emergence of social media sites has brought new opportunities for marketing and technology to work in unison. There are many websites where renters can express their love for— or, more often than not, dissatisfaction with—a particular apartment community. But by creating property-specific Facebook pages, for example, you're able to control the message.
If you're in the student housing market or are targeting recent college grads, for example, social media very likely will become a more important part of your marketing strategy. And while social media sites continue to grow in popularity, that doesn't mean a firm needs a dedicated staffer focused solely on this medium.
“If a company is going to go in that direction, there does need to be some resources dedicated to managing that technology,” says Berson. “Companies want to keep their finger on the pulse of what their residents are saying. And if someone isn't listening, then what's the point?"
But a marketing manager's understanding of social media—of how the online experience affects renter behavior—has become an increasingly important skill along with the ability to track online leads to figure out the most cost-effective marketing strategies. In short, today's marketing manager needs to marry traditional marketing strategies with new media.
THE TRAINING MANAGER
With the IT sector as a whole questioning the relevance of a traditional help desk—one that is reactive and waiting for problems to occur—many apartment firms have realized big cost savings in outsourcing their traditional help-desk functions. Indeed, the common practice is yet another example of how small companies can reduce their overhead— helping to level the playing field—while large companies remain married to an in-house approach.
“A lot of the typical help-desk stuff is going to be a thing of the past," Donahoo says. “It's probably a necessary evil in a lot of larger multifamily operations today, but in the future I'd say it's a dying thing."
Of course, not all companies can eliminate help-desk–style positions altogether. Home Properties, for example, uses its internal helpdesk team to support about 800 desktops across the country. And the company's desire to keep it in-house is somewhat a function of necessity. Over the years, Home has customized certain aspects of the systems it has implemented, requiring a highly specialized skill set.
“We want to have direct control over the quality of skills that are manning our service desk,” Berson says. “For smaller firms, though, it makes much more sense to outsource. If they're using off-the-shelf products, the support that needs to be provided is very standardized."
What can't be replaced, however, is the critical role of an IT training manager who can help users better utilize the software and systems that the CIO has chosen to implement for the company.
The CIO is key to finding and disseminating low-cost technology solutions that assist in the efficient sharing of information. But the head of IT training—of teaching employees how to optimize a new technology— is perhaps the most critical technology function in any company.
“For a small to medium-sized firm, the opportunity [lies] in leveraging existing platforms such as Web-based software,” Lefk ovits says. “The training person makes it possible for a firm to scale efficiently and take on new challenges and new projects without building in a heavy overhead, like what used to be the case."
Western National has merged its training needs into its existing inhouse help desk. “Our help desk is an invaluable asset,” Hodges says. “It's not about password resets. At least 40 percent of their time is spent doing training for users."