While it’s almost become a meme to comment on how “backward” the multifamily housing industry is when it comes to technology, the reality is much more nuanced now than it was back in 1999 when I first started leading the work that eventually resulted in LRO, the industry’s first-ever automated rent setting application.
I was blessed to work with perhaps the most technology-forward operator of the time. Archstone was the first major operator to automate credit screening, first to automate rent setting, first to have a fully automated online leasing application and among the first to move to now-ubiquitous web-based property management systems (props to MAA for being the first large operator I’m aware of that made that move).
(note: if you want to skip the history discussion and get straight to the point, we need a platform not point solutions, skip the next four paragraphs)
The History
One of the things we led on, but didn’t talk about publicly, was the data platform we created. We had an enterprise bespoke BI platform connected directly with our pricing & revenue management and our budget & forecasting applications. This gave us a true “analytics and insights” platform unlike any other at that time. It was so powerful that, when Avalon Bay participated in purchasing Archstone, they hired as consultants the two main guys who designed and built this platform.
Despite the power of that platform, it was very expensive to build and maintain, and the industry wasn’t really quite ready for something like that as a mainstream capability. Pricing and revenue management was becoming ubiquitous, but the cost and complexity of building bespoke BI was still well beyond what most operators and owners were ready for. And to be fair, most companies won’t (and shouldn’t) spend what large, public REITs are willing to spend on those kinds of tech stacks.
In the early to mid-00s, I saw the start of something new. Those of you around then might recall a BI product that came out, Rentlytics. This was the first credible BI solution for which they should be applauded; and to be a bit blunt, it never really caught on across the industry. I’m sure a part of it is that it was a bit before its time. But I think a bigger part is that it was not flexible enough for what the industry needed. I learned long ago that creating a single set of reports for a single company would never succeed as different people consume data differently. The thought of coming up with a single set of reports for an entire industry was likely simply a bridge too far.
Nevertheless, at least we finally had a data solution, and the industry was starting to catch up in its tech stack. Fast forward to today, and there are now several BI solutions available. But is that enough to catch up with where we should be as an industry? I would argue the answer is, “Not quite.”
A Connected Analytics Platform (CAP)
Through real-world examples, our recent white paper, How Data Transforms Multifamily Property Management, shows the power of what we now call “Connected Analytics.” This is the idea that data sourced across multiple transactional software applications and shared across multiple company functional areas transforms decision-making in all facets of operations and asset management. It realizes the goal of “Better decisions, faster.”
But to get the full value of connected analytics, it’s not enough to just have a business intelligence application. It’s also about what to do with the data once you have it. That’s where predictive analytics comes in; and that’s why we need a platform, not a point solution.
Specifically, we need a true Connected Analytics Platform. The industry is ready and more importantly, the technology is now available for a true CAP. What does this look like?
- It provides a single source of truth pulling data from multiple systems of record, not just property management systems
- It has a fully customizable visualization layer to allow power users to create and distribute reports and dashboards
- Through Excel, it allows power users access to the full set of metrics and dimensions for any and all ad hoc analysis
- Most importantly, the platform not only enables but also embeds significant predictive analytics capabilities, e.g.
- Pricing and revenue management applications
- Budgeting and forecasting applications
- Investment management applications
- It connects all of these things together in a single data ecosystem making analysis seamless and simple
The simple fact is that most vendors in the data space offer a point solution for one of these needs. Few offer integrated pricing, budgeting and BI (and more)—a true CAP. In a world of ever-more-complex tech stacks, the most obvious benefit is that this provides “one throat to choke” whenever there’s a data accuracy question.
But that’s just the tip of the iceberg. The real power comes from the seamless integration of data between the BI platform and the various analysis tools and predictive analytics applications that are part of the CAP—a true analytical ecosystem.
One of my favorite quotes is the one attributed to Wayne Gretzky when asked why he was such a successful hockey player. His answer: “I go where the puck is going to be, not where it is.” Multifamily housing is no longer as far behind in its tech stack as it used to be. However, point solutions are where the puck is today. If you want to go where the puck will be, then stop buying analytics point solutions--buy or build a true CAP!
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