Most everyone wants to be more data-driven in their decision process. No one really wants to hear...
Why We Need More From Rental Housing Business Intelligence Solutions
(First in a two-part series on the challenges of creating a good data platform and what rental housing companies can do about it)
In the past few years, I’ve probably heard more complaints from executives, operators, and asset managers about the challenges of getting good data, reports, and analytics. Make all the jokes you want to about how “behind other industries” rental housing is, but the fact remains that there’s still a crying need for better rental housing business intelligence (BI).
Businesses in America and throughout the world are full of proof that great business intelligence platforms drive better performance. These platforms enable everyone in the organization to move quickly and make better decisions. They make real the aspiration to “work smarter, not harder!”
The harsh reality is that most rental housing companies (whether fee manager, institutional owner, or owner/operator) rely on multiple independent and linked Excel spreadsheets for their reporting. This is also true for the operations, asset management, and finance/accounting sides of the business.
Living in this “Excel Hell,” companies are typically drowning in data yet struggling to get actionable insights. Stuck in this “data-rich, actionable data-poor” environment, executives are frustrated by the explosion of real estate technology applications, each with their own data and many of which do not integrate easily with other systems.
3 Rental Housing BI Options
Companies have faced three rental housing business intelligence options, none of which are particularly attractive:
1. Live with “Excel Hell.”
Most companies are doing this. Sometimes they make do wishing they had easier access to better data, and sometimes they’re so used to the cumbersome ways that they don’t realize there is a better solution. Their associates spend more time collating data from various reports, massaging that data with VLOOKUP and INDEX MATCH formulas in Excel than they spend analyzing data. And executives are regularly frustrated when multiple reports show different numbers for allegedly the same thing (especially core metrics like occupancy, availability, and rent growth).
2. Build bespoke BI.
Many of the largest operators “solve” the “Excel Hell” problem by building their own BI environment. While this does deliver sophisticated capabilities, it comes at a great cost. Having been involved in half a dozen large custom BI builds in my career, I know this typically involves a 2–3-year project costing at least $2-3 million. To make matters worse, the company is now responsible for all platform maintenance and enhancements. These ongoing costs often result in lower investments each year past the initial v1 energy. Another issue is “key person” risk when the primary designer inevitably moves on to another job, inside or outside the company.
3. Buy one of the existing “alleged” BI solutions.
These often come bundled with your Property Management System (PMS) or are available from them for an extra charge. I say “alleged” solution because these applications are unlikely to be a true “single source of truth.” They’re not core to the platform and are often built in ways that constrain users’ ability to customize dashboards and reports and otherwise get all the data they want exactly the way they want it. Don’t get me wrong—these options are MASSIVELY better than “Excel Hell,” they just come with limitations.
As data technologies improve, there’s a growing set of new rental housing business intelligence options answering the crying need for better data—BI platforms built with the industry’s data needs in mind versus bundled in with a PMS. These new BI options use more modern technology platforms, allow more systems of record data to be loaded in, m and give bespoke-like dashboard and report customization functionality without the time, expense, and effort of building custom systems. You get the data you want, when you need it, formatted how you want it, and can drive better performance across your organization, faster.
Don’t miss the second part of this series, 7 Features Your Business Intelligence Platform Needs, where I discuss more about what good rental housing business intelligence platforms can do and the seven key things to look for when evaluating your options.