Philippe Beha

The good news: you just acquired an outstanding property. The bad news: You have to integrate its tech systems into yours. Thankfully, that is no longer a problem. Until five years ago, many firms struggled to collect and manage data from different properties in different states and markets. And each new acquisition could bring a new data management system. These “virgin” systems created lots of silos—information in various networks across the enterprise that was hard to aggregate and analyze.

“Without portfolio-wide standardization of processes, systems and people may essentially be working against one another,” asserts Brad Setser, vice president of marketing for Santa Barbara, Calif.-based Yardi Systems, a developer of investment, asset, and property management software. “Executive management and oversight is extremely difficult unless meaningful data can be collected and turned into actionable analytics and reports.”

Still, even as firms gain scale, executives often feel as if they need to keep virgin systems in tact because there is so much invested in them, says Pat Dorsey, partner at The Connor Group, a Centerville, Ohio-based apartment owner and operator that makes 12 to 16 property acquisitions annually. “But since the emergence of the Web,” he says, “everybody’s moving to Web-based systems that make it easy to organize and use data from different locations and property types.”

Web Harnessing

Indeed, with the proliferation of Web-based applications, many owners and managers run a Web-based data management system that includes a suite of products to deal with leasing, maintenance, billing, and more. And since Web-based applications allow firms to manage across differing markets and product types, they can ease tech integration woes.

“Integration is the single most difficult challenge that a multifamily owner or manager has,” says Steve Winn, president and CEO of RealPage, a Carrollton, Texas-based maker of integrated property management systems. “Many systems are necessary to operate a property efficiently and optimize NOI. Getting them to seamlessly exchange information has proven to be elusive until now.”

For example, Web-based solutions can simplify the use of technology in managing properties across state lines, since you don’t have to install software at every location to use it. But even more exciting is the fact that the major systems providers also have staffs of compliance lawyers and regulators to help build legal and regulatory functionality directly into the software. “Energy rules, billing rules, fair housing rules—they’re different in every state and changing fast,” Winn says. “No one operator can keep up. Having one staff to look at all these changes and incorporate them into the system is a huge plus.”

Develop a Plan

Still, the key to a successful integration is a good plan. Start by evaluating what’s on site—the systems, Internet service provider, and hardware being used. Then look at how to get key data out of virgin systems and into the prevailing platform. “It’s crucial that you cover the core systems—like billing and maintenance—so you can run the property,” Dorsey notes. Also, consider creating a checklist, with people assigned to each item along with dates and times for completion.

While planning, review critical reports and systems. “You can have people spending too much time in front of a computer and not enough time taking care of residents,” cautions Rob Couch, president of Atlanta-based Lane Management, an arm of the multifamily investment, development, and management firm that typically acquires 20 to 30 properties a year. “Right now, we’re evaluating the technology cost/benefit to us over the long run.”

Dorsey agrees with avoiding functionality overload for functionality’s sake. “Leveraging integration and new systems isn’t about generating 100 reports for 50 systems,” he says. “It’s about giving timely information that anyone can understand and use.”

With so much reliance on the Web, don’t forget to make sure you’ve got adequate bandwidth, since all systems depend on solid connectivity. Campus Apartments, a Philadelphia-based student housing firm that acquires 15 to 25 new properties a year, surveys new properties prior to “day zero” and orders changes at that time. “After transition, we standardize the ISPs and Internet delivery technologies used for each location to reach the smallest number of individual vendors we need to manage,” explains Andrew Marshall, senior vice president and CIO.

Deploy Deliberately

Most companies deploy an integration approach similar to that at Campus, which begins its pre-transition meetings with the operations and finance teams. “This gives us an outline scope, sizing, and timetable,” Marshall explains. “Next, we’ll survey the property, document the technology in place, and even photograph it where necessary.” Simultaneously, Campus creates a Web site and portal that allows residents to make payments and submit work orders. An applications team also begins to gather property-specific data to populate its Yardi property management system, while the infrastructure team sets up user credentials and e-mail accounts.

“The goal is that on transition day, the systems will be ready to go, and the on-site transition manager can get to work immediately,” Marshall says. “After ‘day zero,’ we’ll ship workstations [and other equipment]. And one to two weeks later, a team will install this equipment to complete the transition.”

In the end, a systematic integration approach makes managing data easier. “We’re not launching a shuttle, but it’s a difficult business,” Dorsey says.

That’s why if there’s a mantra among industry experts, it’s “standardize ruthlessly.” “Even if there’s an incremental increase in initial capital expenditure, upgrade everything to your standard,” Marshall says. “The savings in spares, maintenance, support, training, and manageability will be much lower if you do this immediately.”

Margot Carmichael Lester is a freelance writer based in Carrboro, N.C.

Spreading the Wealth

Multifamily executives plan to use their 2009 tech dollars to invest in a broad spectrum of systems.

Property management software
35%

Revenue management
30%

Data/document management
29%

Web marketing
27%

Infrastructure
18%

Online leasing
17%

Back-office software
16%

IPTV
3%

Source: 2009 MFE Strategies Survey

Integration Punch List

Three tactics for gracefully folding in new systems.

1. Unify processes. “Know what can be automated and what has to be manual to come up with the right hybrid mix,” says Dhrubo Sircar, senior vice president and CIO at UDR, a multifamily REIT based in Denver. “If the process is ambiguous or flawed, then the results will be flawed. Use technology tools properly … to create an overall integrated process that serves your goals.”

2. Consider open platforms. “You don’t want to buy a product that can’t be integrated with others,” cautions Steve Winn, president and CEO of RealPage, an integrated systems solutions provider. “If you design your system to be open, acquisitions are fairly easy.”

3. Sweat the details. “Make sure you have systems in place to track and manage every single item, however small,” says Andrew Marshall, senior vice president and CIO of Philadelphia-based Campus Apartments. “And use each transition to make the next one better by looking at the issues from the previous one.”