Top Tech Innovations in Property Management
- Jan 08, 2008
Multi-Housing News quizzed Ken Hodges, vice president of information technology for Western National Property Management, on what he thought were the most significant advances in technology for the multi-housing industry last year and what on the tech horizon is most promising for 2008. This Irvine, Calif.-based company manages more than 27,000 multifamily units throughout the western U.S.MHN: What new technology/programs have most impacted Western National Property Management?Hodges: In 2007, our firm saw a large return on the internal time and technology we invested to develop and operate our Online Purchase Order system for our portfolio. This system is an internally created, fully functional, end-to-end solution that takes purchasing through its entire life cycle from purchase order creation to vendor payment – all online. This fully integrated system has allowed us to track property expenses against budget in real-time, and ensure proper approvals are obtained prior to the ordering of goods or services. It is tied to our Risk Management Department to ensure that our vendors are in compliance with our insurance requirements. This year, we have been able to process over 10 percent more invoices with the same AP staff and have reduced the average number of days to pay vendor invoices from 25 to 22 days. The biggest return our firm has seen has been close to a two percent reduction in overall expenses this year, which does not sound like much but translates into a seven-figure range in dollars — well beyond our expectations.MHN: What property management technology trends will particularly impact the industry in 2008? Hodges: Our firm has been waiting to see greater data integration between property management applications and vendor-specific software and believes 2008 will be the year we will begin to witness this change. MITS (Multifamily Information and Transactions Standard), developed through the National Multi Housing Council (NMHC), has played an integral part in making this possible by creating a standard template for applications to share data with one another. Open standards and data exchange between multifamily software systems have long been an obstacle to ensuring shared data is consistent between systems. It also prevents the “re-invention of the wheel” by having to create a custom data interface every time a new vendor would try to access data from a Property Management system.MHN: What are some of the benefits of revenue management software?Hodges: If there has been one application that has really stirred up emotions this year in the industry, it would definitely be revenue or yield management software. The advertised benefits are clear — simply put, the software allows you to take a more systematic and automated approach to setting rents. The jury is still out with the industry on how effective the software is at increasing revenue. There is a group out there who firmly believes yield management software works, others who think it will be a short-lived trend, and the majority who are sitting back and taking a “wait-and-see” approach. Our firm has been using yield management software for approximately one year and has formed some opinions about it. It is not a system you can simply install, configure and forget about. The software requires attention like any other application and its success is dependent as much on the site user who is operating the software as it is on the math and technology behind the scenes calculating the prices. The application forces the leasing staff into a process of reviewing competitors more frequently then they may be used to, which, in turn, makes them more aware of current market conditions. As a result, this also makes them more aware of their own property’s pricing and how it relates to the market. Our own pilot with LRO has taught us that, on average, the properties that have stable managers who understand the system and are invested in the process have experienced better revenue growth than a property that has experienced high staff turnover or a new and untrained manager in the program. My prediction is management companies that are not running some type of revenue management software to set pricing in the next three to five years will be in the minority. I’m sure the technology will continue to evolve and what our industry sees five years from now will be very different than what exists today. I’m a believer. Revenue management is here to stay.MHN: What technology most impacted the property management industry in 2007?Hodges: I have to give credit to RealPage as a company that has taken its products and service to the next level. Although Western National Property Management is not a customer of RealPage, we have really been impressed with its evolving product line and method of offering software as a service to its clients. RealPage’s standardized platform and data integration between different hosted applications have been the key to its success and will continue to be for some time to come. They have raised the bar with the competition and our firm hopes it will ultimately cause other companies to raise their level of service in this market.Ken Hodges is vice president of information technology for Western National Property Management, a company based in Irvine, Calif. that manages more than 27,000 multifamily units throughout the western U.S. The 43-year-old company’s portfolio exceeds more than $2 billion and includes multifamily, affordable housing and seniors housing.