Open Software Platforms in Multifamily
The adoption of the term "open platform" in the business world is in fact an attempt to mirror the remarkable success of the open platform model in enterprise software—in particular, enterprise resource planning.
By Jindou Lee
The concept of “open platform” has only really taken hold in the past decade or so. Today, of course, you might hear the word “open” in the context of anything from open banking to open energy technology to open platform furniture. But this adoption of the term throughout the business world is in fact an attempt to mirror the remarkable success of the open platform model in enterprise software—in particular, enterprise resource planning (ERP).
What does it mean for software to be open platform? First off, it doesn’t refer to free tools that anyone can use without restrictions; that’s “open source,” which has been around for decades. The open platform revolution that we’re seeing now is essentially about integration between organizations that have traditionally kept their cards close to the vest. Salesforce, the customer relationship management (CRM) giant, may be the most recognizable example of this model. The company develops and markets its own software for everything from marketing to data analytics to their core sales and task management applications, but they also open their platform for third-party developers to build their own applications, which—by nature of the open platform model—integrate into Salesforce just as if it were their own product.
On the face of it, it might seem odd that open platform has seen such great success. After all, it goes against the basic business instinct to guard intellectual property as fiercely as possible. Nonetheless, Salesforce’s success story demonstrates that a well-defined open platform that integrates with partners’ and competitors’ products attracts customers and developers not just for the freedom and flexibility it allows them, but because open platforms breed innovation. For ERP providers, open software platforms foster healthy competition and specialization, two factors which are essential to innovation. And for ERP customers, the ability to effortlessly combine best-in-class applications for their company’s unique requirements serves as a competitive advantage and a catalyzer for innovative business models.
For these reasons, open software platforms tend to offer some significant advantages for multifamily ERP. Open platform ERP allows you to put together a custom array of high-quality applications that match your multifamily operation’s particular needs without having to deal with integration issues, and often offer other key benefits like shorter deployments, lower initial training costs and lower ongoing operating costs. Given the well-known challenges of implementing enterprise software, this has a direct impact on ROI. Forrester, for instance, reports that around 70 percent of enterprise IT projects fail due to lack of user acceptance. Millennials in particular are a tough sell, a report from Saxony Partners shows that 71 percent of Millennial workers are dissatisfied with the collaborative tools available to them. Closed systems, slow to innovate, are unlikely to offer the modern user experiences these users desire. For the same reason, they’re also less likely to exhibit other modern features such as real-time operational insight which requires mobile application development expertise, often not an ERP’s primary focus but critical to deliver on ERP’s promise to enhance business operations.
Ultimately, businesses choose to implement ERP software because they improve the bottom line. Too often, however, these systems end up costing more than they save the company. The good news is that there has been a significant change in mindset over the last three or four years, and we are seeing unprecedented levels of openness that ultimately benefit everyone from residents to property managers to owners. Open software platforms represent a new frontier for ERP, and if the success of open ERPs is any indication, we can expect this model to only continue to grow in the multifamily sector.
Jindou Lee is CEO of HappyCo, is a San Francisco-based software company that builds mobile and cloud solutions to enable real-time property operations. Its Happy Inspector product is used by thousands of companies and has captured more than 100 million items inspected. The company was founded in 2011 and is privately held.