Tech Adopters Use Data to Edge Competitors

Alanis says fee-based management companies cannot win new business without data.

SAN FRANCISCO— Justin Alanis , co-founder and CEO of Rentlytics Inc. , saw a need to help multifamily real estate owners and managers understand the immense amount of data produced within portfolios. His firm built a software platform that offers organizations an efficient way to compile and analyze all of the data generated from multifamily assets. Alanis says the software adapts to individual needs and is priced to accommodate any size organization. He shared some insight into data as it applies to the CRE industry. GlobeSt.com: How will data shape the multifamily industry of the future? Justin Alanis: Every company will be forced to evolve and embrace a data-centric-approach or risk being displaced by competition. Early adopters of technologies that enable organizations to use data in new ways are shifting operational requirements. Fee managers are a great example: in today’s market, fee-based management companies cannot win new business without data to prove how and why they operate. Ownership groups need to know that analytics, not assumptions, are guiding operations. It’s worth noting here that the multifamily asset class has become very popular during the last several years; we’ve seen an influx of new players, many of which are institutions bringing a new level of sophistication to the space. We think the future of multifamily is already here; new practices and technologies are beginning to permeate the industry. GlobeSt.com: What is Business Intelligence (BI)? Alanis : Business Intelligence transforms raw data into meaningful information, enabling individuals and organizations to quickly and easily integrate data into workflows. BI solutions often involve the process of unifying data from many disparate sources over time in order to produce a holistic business view. In the context of multifamily real estate, this frequently involves unifying data from property management systems, accounting software, marketing platforms and ancillary technologies in order to build a complete understanding of a given portfolio. GlobeSt.com: What are the core benefits of BI? Alanis : Business Intelligence has two core benefits. Primarily, it ensures every decision you make is an informed one. When you have access to complete, actionable data, you can slice and dice your data to spot trends. There’s positive, measurable impact on your organization’s bottom line as you’re aware of business opportunities you wouldn’t see otherwise. Second, BI allows your company to function more efficiently, eliminating manual processes and freeing employees to focus on critical work. GlobeSt.com: What are the most important aspects of a good BI strategy? Alanis : Through all of the BI implementations we have facilitated, the biggest determinant of success is organizational commitment.  Business intelligence can change the way that companies can make decisions, though cultural change must occur concurrently. We have found that companies need to incrementally integrate BI platforms into existing work flows and establish firm plans as to how the software will be deployed across organizational levels. It’s not always easy, though once you begin to establish systematized, metered, data-driven workflows, organizational standards quickly cascade in a positive direction. GlobeSt.com: How does a company measure or track the effectiveness of its BI strategy? Alanis : Ultimately, any tool you adopt needs to be evaluated in terms of ROI. Business Intelligence has a studied and proven ROI for companies: on average, a company that fully adopts business intelligence sees a 968% return on investment, according to Nucleus Research . A core tenant to BI is measurement, and any good BI tool should enable you to clearly identify its specific impact on your business. GlobeSt.com: How do different levels within an organization adopt BI? Alanis : A good BI solution should be used by all levels of an organization, from the CEO to the community manager. BI enables every level to work within the same data in real-time. Though, each level will use it differently, to satisfy different needs: regional managers, for example, will need to monitor weekly leasing and occupancy statistics, while the CEO will want to view much higher-level data to understand the health of the entire portfolio. For this reason, we have found that establishing role-based dashboards is critical, as designing for the common denominator will often leave users without the exact data they need to make insightful decisions. GlobeSt.com: Should companies bring in outside data to complement existing portfolio data?  Alanis : Absolutely. In order to perform comprehensive analysis around property ROI, utilizing data from outside the core property management system is essential. The notion of building an agnostic solution–one capable of integrating multi-source data–has guided our company from the start. GlobeSt.com: Do you think that there is a place for BI within smaller operators or just for the larger REITs? All of the above. In the past, business intelligence was only accessible for larger organizations capable of committing the money and time necessary to build in-house solutions. It typically required a two-year project and approximately $2 million in upfront costs with ongoing maintenance of at least $500,000 with mixed results. Read more about Rentlytics in a past issue.