As a national multifamily real estate investment trust, Rochester, N.Y.-based Home Properties has a comparatively robust IT budget to invest in and enable a host of apartment-centric operating systems and applications. That doesn’t mean everything is perfect, though. Home Properties vice president of information systems Chris Berson says the selection of any technology has to be driven by its compatibility with the specific business processes at any company.
For example, when Home Properties was looking for lease document generation software, the IT and on-site teams found available products in the multifamily space lacking in either flexibility or cost-effectiveness, requiring the creation of an enterprise software application. When it comes to the buy-it-or-build-it model, though, advancements in cloud computing and Software as a Service have the Home Properties IT team looking outward these days for solutions. Berson checked in with Multifamily Executive senior editor Chris Wood this week to talk about vendor consolidation, revenue management, and how his team would build out their IT platform if they could start all over again.
MFE: So if you could build your enterprise's software platform out all over again, what would be your primary objectives and priorities?
BERSON: Understanding the architecture of your underlying system and understanding the load your business processes will place on that system is key, especially when it comes to the peaks and valleys of that load during the course of the month. Interoperability is another critical factor. That is, the means by which enterprise software must interact with both internal and external systems and services is always a challenge. Where communications with external services are concerned, take a close look at how that integration takes place. What are the implications to the performance and integrity of your production systems? What are the implications to security?
Integration is sometimes treated as a secondary or even tertiary consideration where enterprise systems are concerned, especially where “standard” or “tried and tested” integration offered by software vendors is promised. But if not addressed with all due care and attention while you are building out the system architecture, it can quickly take pole position once you’re live. If you’re not staffed with the necessary expertise to effectively evaluate these areas, you’ll want to bring those resources in.
MFE: Would you look to outsource all of your hosting and go web-based only?
BERSON: We are in the process of evaluating this. Obviously, we see the benefit in outsourcing these systems and the associated non-core activities that prevent internal resources from concentrating on value-add projects. I think that is especially true for those companies that don’t have a deep bench. So the short answer is yes, if it doesn’t get in the way of innovation.
MFE: Would you create any in-house enterprise systems?
BERSON: With the range of software and systems in the market today, you can do 100% of what a multifamily firm needs to do with available products; the challenge is that not all of them will do it in the way you believe it should be done. Really understanding your processes and requirements is key in selection then, because products are usually developed around the vendor’s view of what their customers think is important. One of your prime concerns during selection is to determine whether their interpretation of those needs is aligned with yours.
MFE: Do you think revenue management has joined the ranks of multifamily 101 systems?
BERSON: Revenue management as a practice has. We believe RM systems are core for public REITs but are not quite there for private multifamily firms, especially the smaller ones. Along with resident screening and resident portals, revenue management is one of the top three IT systems we wouldn’t want to live without.
MFE: How tech savvy do you think back-end maintenance and operations departments can get?
BERSON: Oh, I think operations departments already embrace technology where it benefits them in their roles. Sometimes it is the IT departments who think they know what technology is most valuable to operations, but don’t actually ask them what they need. That creates a missed opportunity. That’s not to say we can accommodate every request, but keeping your ear to the ground allows you to partner with on-site staff and develop a technology strategy that makes their jobs easier, making them more effective at running the apartment communities and ultimately making our residents happier.
MFE: What do you think consolidation among systems providers will do to the qualty of software and products?
BERSON: Optimistically, I’d say that consolidation is typically directed at features that are already standard among products or at least in the same ballpark where functionality is concerned. When done correctly, standardization eventually reduces the resource bandwidth allocated to those areas and allows for redirection of those resources toward innovation of the factors that truly differentiate different vendors’ products.
But I think the reality is slightly different: I think the risk that vendors take in their efforts to standardize and consolidate is that they may prematurely abandon an established product—and all the customers using that product—in an effort to move to the next generation. When support resources dwindle in favor of the next-gen effort, existing customers are left a little disillusioned, and the vendor might even end up losing some of the captive audience they were counting on to upgrade to the next big thing.
MFE: What's the top multifamily IT commandment that you would give to someone beginning to build out their software platform today?
BERSON: Understand your business processes.
Editor’s Note: For more industry insight and guidance on how to build a multifamily IT platform, check out the May 2010 issue of Multifamily Executive.