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If you want to discuss, just e-mail me at mike.radice46@gmail.com

I would enjoy the conversation.

Mike

The Return To In-house Computing. Welcome Home.

It is becoming clearer each day why more discussions are turning to only using IT systems and software in the future that are managed and run in-house. Not only are advances in technology pushing the re-consideration but the economics are trending heavily to support that thinking. The major stimulations, however, are security and control. How long before the expanding breaches of third party offerings are hacked and resident personal data, rent fees and payment information is spewed out into the public domain? Now, just going in house is in itself no panacea against a hack or breach but for starters a ‘company of one’ represents a smaller target than broad based services. Increased dependency is another. I have maintained for years that ‘rogue- freemium’ file stores and social media are huge soft spots. What is clear is that re-thinking of cyber security is now a priority. There are additional supportive business issues in play.

As I survey the landscape more and more SaaS companies are adding a ‘server option’ to their suites. This is happening because there is an argument and a demand. More and more hardware companies are crafting ‘data center in a box’ platforms. Solid state storage technology devices are making enormous advances. Readily available network switch ‘boxes’ can control even the most sophisticated network requirements manageable from a tablet. The use of firewalls and spam filters have become common place. Access authentication technologies are becoming a mandatory necessity. Sure, there are a number of additional nuances that have to be factored in to going in-house but the core of the central argument is becoming ever more pressing and valid. Fact is, most everything about computing, except salaries and skills availability is getting less expensive and scalability constraints are almost a concern of the past.

Why then the discussion? Well, we return to the basics of the argument - security and control. If business executives understand anything it is risk and its minimization or avoidance. Having the guts of their companies spread out over a constellation of third party services just doesn't feel right. As a business owner I want it where I can see it, touch it and know who controls it.

I suppose that ‘private clouds’ will be the stepping stone in this inevitable cycle. But even in the computing as a ‘utility’ sector there doesn't appear to be the momentum that makes ‘private cloud services’ destined for market wide adoption as the for everyone solution. The very idea of having to orchestrate such a move to a public/private cloud is daunting. Sure, it will get easier and more fluid but never non-daunting. We do know this, IT moves in waves and even assuming that SaaS and hosted services will expand and grow, forward thinking and planning needs to be given to what and how happens next. And, perhaps why it must happen. Where is this headed? Unless your outsourced service providers have an ‘in-house path’ defined for you as an option, you are on risky future ground.

My forecast -- we are heading back in house. Welcome home.

Insider Security Threat in Multifamily - A 13 Point Checklist

There is a lot of talk at industry IT conferences and I hear the frequent answer to the proverbial question:

“What is it that keeps you up at night?” Answer: SECURITY.

Most of us leap to the concern about ‘outside hacker’ breaches. But the times and conditions effecting security are undergoing ghostly and ghastly changes.

Can there be a stronger wake-up call than this massive SONY security breach? From what I am sensing this is looking more and more like a blended ‘inside/outside job’. Horrific to digest, if proven to be true. It’s always easy to place blame and focus upon outside ‘hacker attacks’ but the Darwinian evolution of criminal methods that motivate subterfuge and extortion are gaining traction. Working from the ‘inside’ is in the end a most productive criminal methodology (ref: also, Snowden). History in business, government, religion and crime teaches that time and time again infiltration can turn any organization into…well a mess. It is my forecast that we will see ever more ‘insider’ infiltrations.

Oh the humanity!

So, here are 13 rules of the road ahead: (Some may charge me with fostering a ‘police state’ mentality…well so be it, because without it you will be the one calling the police.)

1.       Establish, follow and audit a records retention policy. So much – too much- is kept unnecessarily and while the records may be old doesn’t mean that those records and documents are not embarrassing if disclosed or not valuable to thieves.

2.       Records retention and destruction should also be automated. Don’t rely on human governance. I KNOW it can be done better by a ‘machine’.

3.       Only use digital file stores that can give you on demand audited access reports.

4.       Make it a practice to (very) frequently sort and analyze that ‘who accessed’ documents. Learn exactly who is looking at what and why? Look for patterns or high usage or volume activity.

5.       Be suspect of individuals ‘eager to help’ seeking access to systems not in their domain. Have a clear documented policy as to who can access which systems.

6.       Be excessively wary of staff hired on as ‘temporary’.

7.       Don’t allow the use of ‘Freemium’ or ‘rogue’ document file stores. YOU must be in control of the password access.

8.       Establish stringent permission controls of ‘storage domain’ access – who can see what? Who can re-transmit what?

9.       Make it known as published policy that all e-mail is subject to review and will be checked. And, check it.

10.   Install a ‘web-site’ visit monitoring and reporting system that shows management who is visiting which web sites.

11.   Establish a clear policy specifying what software and apps are allowed on company IT equipment. Install an automated monitoring system that scans each system for violations.

12.   Make it known that sharing of passwords is a punishable offense. Test it and enforce it.

13.   Have an HR dismissal IT checklist procedure in place to be followed that enables a comprehensive, across the board shut down of all access to all systems- and a method for doing so – swiftly.

A specialty of mine is digital document management systems. So which one of you want be the first to be exposed as having had your resident files and HR files go missing or ‘stolen’ via the use of some ‘freemium’ or ‘rogue’ file storage system? I see a line forming. You may not think you are in that line but if you allow the use of such systems…you are. In the technology world I live and work in I am constantly amazed at the attitudes I encounter. I KNOW that you can EASILY audit every access, use and viewing of every digital document IF you control them.  But if they are on some employee’s personal ‘free file store’ you have lost. Again, talking ‘insider’ here. It may not even be a purposeful criminal but someone who decides to retaliate due to some perceived injustice or treatment. One bad moment…one click and there you have it. The personal data of your residents, employees and business partner contracts in all their glory for all the world to behold. Yummy.

As always, I am here to help. Send me an e-mail at mike.radice46@gmail.com  if you want to know my choices for digital document storage systems that will lower your exposure and risk. I have three in mind.

Mike

Here Is One New Word To Learn And It Isn't Pretty

As I wrote and described in a white paper of two years ago entitled RESOLUTION, we in multifamily were entering the era of the ‘end of business as usual’. 

The construct and premise of the white paper was founded on three axioms:

1.       The fragmentation of our industry was its Achilles heel

2.       That ‘capital’ would soon chase down our inefficiencies and asset management decision making

3.       That unless there was an aggressive adoption of a digital transformation ( I called it “going digital at the core”) conventional operating methods would soon debilitate and expose the weak from the herd as easy prey for predators

Two years ago I set the timeline for a significant industry restructuring as five years. Two years have now passed, so we are now down to three years. 36 months, which is not a lot of time.

Look and see. In just the last few weeks we have seen the moves begin. Learn a new word: ACTIVIST.

Two companies of industry renown are just now under pressure – from activists. And so it begins. 

These activists are ‘capital’ style companies not operators. They smell the ‘opportunity’ for profit. Their actions will bring attention and attract even more activists and the frenzy will build. The herd mentality surrounding aggressive activism will create very strange and in many cases unwelcomed new bed fellows. New alliances and consolidations will occur at an increasing rate. It will be ‘white water’ time for many. As a defense, hiding out is no longer an option in the age of the automated patrolling and culling of business data and intelligence. Be assured that ‘big data’ is already at work to expose the weak and inefficient in our industry. The big data ‘radar’ screens are filling up as you read this, with a veritable slew of potential targets.

The end game is to create an ‘entity’ worthy of attracting massive capital infusion. The first phase will be in simple size consolidation. And we have already seen that happening. The next will be deciding on being an owner or a fee manager. We see that now happening. Building out an infrastructure of magnitude and import will set the activists on the hunt for the underperforming and exposed. It is always an activist’s belief that it can be done better and more efficiently and technology at scale holds the key. They know that housing will be at a premium in the years ahead. And with the supply limitations controlling housing as a ‘natural resource’ comes the opportunity for pricing arbitrage and access to state and federal subsidies and tax benefits. Such fertile ground.

The future will demand unparalleled disclosure of operating performance and the value being derived for investors. The metrics will steer many to privatization away from ‘public’ markets making the cost and availability of capital a devil-driven paradox. Others will see that the best protection is to be found in operating results and in the improved use of capital in asset decision making. 

My point in the white paper was that the new era will absolutely require the adoption of ‘digital efficiencies’ that can deliver increased ROI and better business intelligence used in decision making. It will become ever more understood that technology is the new finance. 

How long before local property offices seem like an airline check-in operation? How long before a national service handles all leasing? How long before the ‘internet of things’ totally monitors the performance of your local assets? How long before a robot says “Welcome to Happy Hollows – here is your key”?

Not long.

As always, I am here to help. Send me an e-mail at Mike.radice46@gmail.com if a conversation on ‘going digital at the core’ would be helpful to your planning for the future

.

Mike

Does Your Multifamily Business Have Answers to These 5 Tough Questions?

The multifamily housing industry is one of if not the most fragmented industry in the United States. Fragmentation is characterized by the fact that no significant national housing investment vehicle yet exists that can attract capital seeking to dominate and secure national market control and gain financial synergies on a massive scale. However, capital markets and the next wave of technology driven by cultural influences will combine to consolidate and motivate the enablement of just such an ‘industry powerhouse player.’

Don’t be misled, the game is changing. We are rapidly approaching the end of business as usual in multifamily. The economic outlook for the future of the industry is too alluring for investors to ignore. Business model moves by Blackstone, Zillow, Renter.com and Greystar serve as clear evidence of this trend. Not so obvious, however, is the underlying importance of technology on executing a successful future outcome. Multifamily leaders (read, ‘survivors’) in the new era will be driven by how well they embrace becoming ‘digital at the core’.

Becoming ‘Digital at the core’ is about reducing asset investment risks, creating competitive marketplace advantages, and increasing asset values in light of the industry’s future structure. Anyone with a stake in multifamily cannot afford to ignore the impending mandate to become digital at the core.

When businesses become ‘digital at the core’ they are smarter, quicker, more efficient and significantly more powerful and competitive. When people work in businesses that are ‘digital at the core’ they secure unique advantages. They become knowledge workers that can find what they need, know, what they need to learn, do what they need to do, exactly at the right moment. And, they can take action from anywhere and at any time. The depth of benefits derived and being driven by this change are profound.

The mandate to become “digital at the core” is inexorable. It is driven by residents, workers, lenders, regulators, competitors, investors and technology itself. It is these constituencies, stakeholders and powers that make becoming ‘digital at the core’ a required strategy for survival.

The great businesses of the 21^st Century have already demonstrated what it means to become ‘digital at the core.’ This means, digital operations, digital workflows, and digital processes that permeate, and ooze within their business DNA.

Digital operations mean success, and here are some reasons why from Dr. Peter Weill, MIT Sloan School of Management’s Center for Information Research, Wall Street Journal:

ü  IT-savvy companies are 21% more profitable…

ü  IT-savvy companies make information technology a strategic asset

ü  They use their technology to reduce costs today by digitizing their core processes…

ü  IT-savvy companies use their digital platform to collaborate with other companies, customers, and suppliers

ü  It’s about the whole company thinking digitally

ü  For the IT-savvy business, there are two sources of their greater profitability: lower costs for running existing business processes, and faster innovation.

A survey of the landscape of successful companies in this digital age quickly surfaces those that have crossed the great divide, having moved from legacy data processing infrastructures to becoming truly digital at the core. By doing so they become not only highly competitive, but also highly valued. Nike, blending technology with sports shoes and clothing. JetBlue, integrating entertainment and communication technologies with air travel. DirecTV, putting advanced entertainment systems and choices in the palm of your hand. And of course there remains the ubiquitous Facebook, FedEx and Apple with its iTunes, Apple Watch and Apple iPay. Think of the success of Samsung with smartphones and smart TVs that put a seemingly endless amount of entertainment content at your fingertips. Amazon and now Alibaba that puts digital shopping and shipping and now even ‘entertainment media’ one click away for millions shoppers. And, UBER – where a ride is just a click away. Each and every one – creating and exploiting marketplace advantages by being digital at the core and gaining significant valuations and returns on their investment and innovation.

For multifamily executives, embracing the opportunity and challenges of technology, determining technology investment levels that the future will demand, might seem a bit overwhelming. It doesn't have to be.

.

Drive to answer these few important questions:

1.      Do I understand how advances in technology will change the basis of competition in multifamily?

2.      What will be required in technology to meet if not exceed the expectations of residents, customers, and business partners and investors? How would you describe those future expectations?

3.      Do your current business plans clearly incorporate the role of technology as a performance contributor, knowledge differentiator, and value creator?

4.      Do your technology plans and investments clearly identify and align with your views on the threats, opportunities, and economic outlooks you consider probable?

5.      How agile and flexible are your technology plans and programs in light of rapidly changing economic and regulatory compliance conditions?

In the end, the below list of key objectives for multifamily businesses will remain sacrosanct, and, yes, they too must be kept ever in mind:

v  Asset value development via new development, acquisition and divestiture

v  Risk mitigation

v  Resident acquisition and rent yield

v  Resident satisfaction and loyalty

v  Property management effectiveness and efficiency

v  Local marketing and brand and reputational development

v  For Fee Managers: customer acquisition and longevity

Blending these objectives into a technology strategy that addresses the above suggested macro questions will help you frame out a path forward.

The point is, that it will be technology that frames the future successful industry business models. Not just for the efficiencies technology can deliver but more importantly for access to the ‘knowledge’ that drives sound, risk mitigated decision making and operations.

As always I am here to help. If you would like me to lead a team session to help formulate your strategic technology planning send me an e-mail at: mike.radice46@gmail.com or call me at 603-580-5497.

Two Ways to Put More Profit in Your 2015 Expense Budget

1.       Reduce the expense that continues to surround ‘evictions and collections’ processing.

Over and over I see the following:

o   It’s like every case is almost a new experience….OK, for some it is…

o   Gathering the necessary paperwork remains a medieval practice.

o   Physically get the needed paper files.

o   Maybe, even then copy, pack and pay to ship them to a central office.

o   Make multiple copies of the files.

o   Pay to re-ship the copied files to the collections service or the law firm.

o   Review paper docs to determine what’s missing.

o   Make multiple copies of the files.

o   Hold multiple, multi-site conference calls to explain what is yet needed, from whom and why.

o   (Collections probability inexorably slides ever more negative due to time delay.)

o   The preparation of eviction packages with multiple law firms in multiple jurisdictions and are thus scattered on desks in paper packages across the legal country side.

o   Constant follow up (nagging?) to source missing documents.

o   The time and effort that goes into on-going ‘tracking and reporting’ is a huge time sink.

In this digital age it is possible to set up (1) electronic files to store all resident related documentation (2) create ‘shared secure electronic files’ for each resident case, providing real time access by collections services and law firms and (3) run compliance documentation audits to be sure that what might be need is there. Eliminate the copying and shipping cost and time. The property management company and the collections service or law firm can all now have real time shared access to needed documents-instantly.

Done properly all this documentation can be electronically sourced directly from property offices. No need to fill out shipping labels and pay for shipping! What is the shipping cost times how many packages?

We seem to understand the need for electronic maintenance task tracking. We all seem to understand the need for electronic A/P processing. Why should ‘evictions and collections’ task processing - which means REAL MONEY TOO - be treated so poorly and remain a paper based process?

Electronic document exchange and electronic workflows can easily handle all of this – stunningly well.

2.       Portfolio wide printer fleet management and support by using an outsourced ‘managed print service program’. (I have reviewed many and have suggestions.) Lower your printer equipment purchase and supplies costs, practically eliminate IT support expense and lower the cost of paper.

A managed print service program is no different in rationale than why you would hire a landscaper or a painting contractor. They probably can do the task quicker, better and cheaper. So it is with a managed print service provider. If you have more than 25 office printers in your portfolio and you are not subscribed to an outsourced managed print service program. What can I say? 

Why do you want to pay more than you should in printing, support and supplies? Do you think that all those cartridges and ink toner tanks that line the walls of office supply stores are there because they are low margin products for the retailers? Do the math on printer support. If you are good, 10% of IT help desk time is taken up with printer issues. How much do you pay an IT person? What does it mean to ‘leasing’ when the printer is not working? Do I really need that model of printer that can do 5,000, collated, stapled, three-hole punched copies a week? (What would it mean as a paid resident amenity if residents had access to a printer at the community to support their personal 24/7 printing needs?)

Too often we think that because our printers are spread out at local community offices and not all in a central location that an outsourced managed print services program will not make sense. Wrong. The savings can be stunning. And, you can find out just how much savings for FREE!

So, there you have it. Two ways to reduce your expense budget!

As I always offer - if you want to learn more about taking advantage of systems and programs that can provide these specific benefits, send me an e-mail at mike.radice46@gmail.com I’d be happy to help.

Mike

Isn't It the Time and Technology for Centralized Leasing?

I know first reaction to this idea raises all kinds of subtleties and nuances. So be it…but, let’s carry on. 

It’s called innovation.

How much do you spend on the investment in systems, equipment, training, and local staff time allocated to generating a final lease package? Next, consider just how much ‘violation’ of law, policy, compliance and regulation finds its way into localized lease package preparation. How many of your lease packages are done correctly and are in compliance? The answers to just these two questions should more than justify a re-consideration of how things are being done now. After all, if it is all working so well, why the need and expense for annual on-site lease audits? What and why for in this digital age? Does it make sense to take a plane ride to a storage locker to open paper files? Is every paper file reviewed or is statistical sampling used? Electronically, legal can actually review every resident the entire lease package-- if they are stored centrally, and digital right from their office.

Imagine a centralized or regional leasing staff that prepared all of your leases. In this day and age of digital interaction and responsiveness this can surely be done. Fact is, I know of one company designing just such a regional platform for just such use.

With ‘centralized/regional’ leasing, the gains in control and compliance would be significant. The reductions in risk and legal exposures would be legion. The discipline gains surrounding lease terms agreed to would make any multifamily legal department have instant ‘happy feet’. Just the fact that ONLY the most current version of a lease or addendum is being used, would bring comfort to the heart of any multifamily legal department.

Second level benefits would be the removal of paper based files from local property storage, reducing risks, and the capacity to expedite the paper/document assembly required for eviction and collections processing. In addition, the care and feeding of IT interfaces for capture and storage of a finalized lease package being prepared at local properties becomes simpler. With todays ‘capture and route’ capabilities using smart MFP devices final filing upon signature is made simpler and ever more compliant. There are even technologies that can ‘survey’ the documents upon attempted filing to see if they are actually completed, initialed and signed properly. If not, filing is prohibited.

Think of the increase in service and responsiveness when lease terms can be ‘adjusted’ and instantly, in real time, approved by a ‘centralized leasing staff supervisor’ working at the regional lease service center. And, oh yes, since so much of the back and forth is with renters who are remote from the property anyway – a centralized service center can work the interaction and finalization 24/7. A very powerful service differentiator among property choices.

“Hello, I am Robert, your personal lease associate at your 24 hour leasing service center…you can call us at any time or day with questions or to obtain your final lease package for review.” It has a nice cadence to it.

When tied into the advance of ‘consumer driven leasing’ as I discussed last week, such a business model would position ‘the movers and shakers’ in multifamily very well to secure and hold the high ground of the future of leasing.

So let me see… more control, less staff time and training, experts doing the work, increased service and responsiveness, no remote audit time and expense, lower IT costs and strong future service positioning….sound like pretty nice concept to be explored.

If indeed you would like to evaluate becoming a ‘prototype site’ for just such a platform and model send me an e-mail at:

Mike.radice46@gmail.com

…and I will be glad to arrange to introduce you to the model…

Mike