NAA Conference Report: How to Justify Technology Investment; Future Trends and More
New Orleans--The rise of social media and its role in shaping the way the multifamily industry adopts and uses technology cannot be ignored.
New Orleans—The rise of social media and its role in shaping the way the multifamily industry adopts and uses technology cannot be ignored. All four panelists at a session titled ‘Titans of Technology—Multifamily Housing Industry Technology Solutions for Today, Tomorrow and Beyond,’ agreed on this one point.
David Bateman of Property Solutions, David Post of MRI Software, Steve Winn of RealPage and Anant Yardi of Yardi Systems were the four experts speaking at the session held at the National Apartment Association Conference in New Orleans.
William Wollinger of WinnResidential received numerous questions from industry people, which he used to moderate the discussion.
One of the top questions the industry wants to know is how a multifamily customer can justify a technological investment. “You can’t monetize the value of software in terms of the bottom line,” said Bateman. “You can monetize certain technologies. Portals are the direction in which the market is moving and certain technologies you know you have to have. It is difficult to evaluate technologies such as SMS, but do some tests and see if it works for you. What works for one company might not work for another.”
Post said that it is very important to have the right level of discipline and transparency in processes and cost structure while making a technological investment. “Your technology should either drive additional revenue or drive down costs. If we can’t justify it to our board and investors, we should not be doing it. But the multifamily industry is more driven to change because a company’s consumers are driving that change,” explained Post.
According to Winn, if you have to spend months or years evaluating a technology, you should not be investing in it. “Cost of evaluation is coming down dramatically now. What used to be a big deal isn’t anymore. If it’s an ERP system and I have to spend millions on testing it, it’s not good. We want something that’s easy to test.”
Yardi believes that return on investment is a key point for a decision like this. “Corporate objectives are also key and a company needs to figure that out. For example, does an organization want to reduce its carbon footprint? Secondly, where do you want to position your company—do you want to be a thought leader? All these factors will make your decisions,” said Yardi.
Once a manager/owner has made a decision to make that investment, what’s the best way to test it?
Post suggests looking for critical mass for adoption. “There is a difference between spoken preferences and revealed preferences. So look at how consumers are acting and not at what they are saying. Look at residents when they are in-house rather than when they are prospects. This is much more efficacious,” Post said.
For Bateman testing on a small segment before rolling it out portfolio-wide, makes a lot of sense. Go for something that has low investment but which will allow you to test more things.
The discussion also veered toward the next cool thing and what will be the trends to watch out for.
At the big picture level, Yardi said two major technologies will rule the landscape. Smartphones and social networks will continue to impact marketing. “While today it seems to be used more for negative advertising (for example, if something upsets a resident, he/she is far more likely to post it on social media). But collectively, we have to figure out a way to balance it out with the positive,” said Yardi.
Bateman is against being caught up in the development of specific “apps” for disparate devices. “There is a large shift now in the way people are consuming content, and people are developing iPhone applications for searching apartments etc. I think it’s ridiculous. There is a ubiquitous platform through which we can develop content and that’s the web. For the software developer to accommodate all these different platforms, is a waste of time. It will stifle new development,” he said. Why focus on device-specific apps when all smartphones feature internet connectivity? Web is the “ubiquitous platform” that developers should focus on. And as smartphones continue to spread, developers should focus on optimizing their web content for mobile browsing.
Winn outlined five mega trends, which he believes will impact the industry and what advancements come next.
- Green is clearly important and will become more important.
- GenY: Pay attention, they communicate in a different language, and embrace a different technology. We can expect 80 million new potential residents, be where they are.
- Cloud computing
- Online marketing arena: getting cost per lease down. Focus on resident retention. You will start to see lead optimization products which will qualify leads for you. Overall marketing cost should drop pretty significantly as this new technology platform develops.
- Document management.