The multifamily housing industry is one of, if not, the most fragmented industry in the United States.
Why? Follow the money. There remains no national housing investment that can attract capital, or secure national market control. And thus, there can exist no financial synergies on said scale.
Nor is there a technology platform positioned to attract financial investment and serve the industry on such a wide scale. Together, however, capital markets and the next wave of technology and its cultural influence will combine to create just such an industry power player.
The game is changing. It will become the end of business as usual. Business model moves by Blackstone, Zillow and Greystar serve as clear evidence of this trend. Not so obvious is the pivot of technology to a successful outcome. Multifamily leaders in the new era will be driven by their embrace of becoming digital at the core.
For a company to become digital at its core is about reducing risk, creating competitive advantage, and increasing asset values in light of the industry’s future structure. Those with a stake in multifamily cannot afford to ignore the impending standard.
When businesses become digital at the core, they inherently become smarter, quicker, more efficient and significantly more powerful and competitive. Those who work in businesses that are digital at the core secure unique advantages. They become knowledge workers that can find what they need, grasp what they need to learn, and act with precision. Most importantly, they are not tethered to a desk and can take action from anywhere, at anytime.
Digitization of information and the automation of manual processes through document-driven workflows makes data more understandable, flexible, and usable.
Suddenly, complex problems are not so complex when it’s easy to access, view, and monitor events around your business. Just as the digital watch made it quicker and more accurate to tell time down to the millisecond, so too do digital processes and access to digitized information improve both efficiency and comprehension, while reducing errors and mitigating risk.
Take contract management as an example. It used to be that to ensure an expiration date was never missed, someone reviewed a physical document, made a calendar entry, and ensured they looked ahead so as to not miss a deadline.
Now, a contract is scanned, alert dates automatically extracted and notifications sent to appropriate parties well in advance, with regular reminders as important dates approach—all with the click of a button. The depth of benefits driven by such automation is profound.
And so, the mandate to become digital at the core is inexorable. It is driven by residents, workers, lenders, regulators, competitors, investors and the technology itself. It is the stakeholders that make becoming digital at the core a required strategy for survival.
The biggest and brightest businesses have already made the commitment. This means, digital operations, digital workflows, and digital processes that permeate their business DNA.
For multifamily executives, embracing both the opportunity and challenge of technology, gauging the proper investment level on this endeavor might seem a bit overwhelming. It doesn’t have to be.
Every day I see advances made in technology adoption by the first movers. The most prevalent are in big data analytics, cloud computing and the emergence of the Internet of Things.
Big data technologies are already long pursued in many industries. Businesses have realized the potential for new insight and direction afforded by connecting all of their bespoke systems into a single platform where data can be collected, analyzed, and acted upon. The accelerating power of the cloud enables data to be interpreted faster and more robustly than ever before.
Soon to burst upon the scene are technologies that will redefine the way we interact with our knowledge systems.
Those multifamily companies seeking to become power players must recognize that the sooner they tap into their existing data, the faster they will become more competitive and more prepared. Only then will they be equipped to handle the wave of the digital future.
Digitization changes everything
Digitization is everywhere. Even the most common of everyday items are being made smarter, more intelligent and more capable.
Take the Internet of Things. It’s the concept of connecting anything—device, tool, appliance—to the Internet: light fixtures, DVRs, thermostats, wearable devices that contain your wallet, monitor physical activity, or upload your photos to Facebook without touching a computer. The Internet of Things has amazing potential to help individuals, companies, and societies reduce waste, operate more efficiently, and collaborate more effectively.
However, once everything is connected, what do we do with the resulting data? How do we make sense of it all? How will this impact the multifamily industry?
The explosion of unstructured data, from property operations to legal departments to leasing offices, has resulted in vast untapped repositories of information.
Think of online reviews, emails, the sentiments conveyed in telephone calls, social media sites, and property portal click interactions. And starting now, even more things and technologies will provide usable information and data to improve business. How will your company analyze and cull new information about the public perception of your property assets? How well do your business processes perform?
Luckily this does not require the creation of a new data analytics department. There are simple, non-intrusive technologies that can do the work and help your business become ever increasingly digital at the core.
Low barrier investments
While there are many exciting innovations on the horizon (a refrigerator that will text me when I need more eggs and milk), the looming question for multifamily owners and operators is this: how do I tap the analytics of data I already own? What can I do today to capitalize on those assets I already have in my grasp and transform them into a big data resource?
Start with paper. Becoming instantly digital through the use of scanning or other emerging technologies delivers low hurdle-high impact with the right software.
Suddenly this static thing (paper) becomes a smart thing (communications lever) that triggers notifications to ensure it is accurately completed, signed, and initialed for compliance, while alerting a signatory if it is filled out incorrectly. This same piece of paper, now digital, suddenly becomes smart enough to auto-generate a workflow throughout an organization, and alert responsible parties of impending deadlines.
Digitizing a document means it becomes integrated into a universe of data that can now be monitored, tracked, and analyzed to discern vendor or project performance.
Suddenly the universe has opened and this digitized document, as well as millions more, can now integrate and aggregate with existing systems—property management systems, HR systems, email repositories—into usable analytic dashboards.
And paper is everywhere—your leasing office, corporate office, storage boxes, with your residents, vendors, and service providers. Still, many companies who attempt to go paperless still, at one point or another, print paper.
The difference is thinking about the meaning, the information, constrained in paper and what it means to make it an interactive thing.
Documents, including paper-based documents, are involved in business transactions, auditing, inspections, employee management, legal affairs, and recordkeeping. While it may be exciting to a multifamily operator to want to tap into the data from a smart thermostat for energy savings—isn’t it obvious that there is more value in the data contained in your business records, documents, contracts, reports, business plans, budgets, leases, emails, and financials?
This is where your world is hurtling.
Without a plan and an established path, multifamily companies will struggle to access the information and data created by the Internet of Things.
The quest to become digital at the core will falter because of disparate systems. Ask yourself. How many document and data repositories your company has today? How many different systems contain siloed data?
It would be so simple to centralize and integrate everything if one took a step back and realized, all of my data—at one point or another, came from a document. That is the path to becoming digital at the core.
Technology will extend far beyond PCs, laptops, tablet-based apps and software systems into the everyday items around us. Soon, everything will be smart and the multifamily companies that embrace the value of smart resources and tools will experience not only efficiencies, but access to the knowledge that drives sound, risk-mitigated decision-making in all aspects of operations.
Author: Lauryn Schimmel is managing director of SyndicIT Services.