Part 2 of 3
SAN FRANCISCO—In the first of this three-part series of questions on data and business intelligence, we chatted with Justin Alanis, co-founder and CEO of Rentlytics Inc., on a few key ways that data will shape the future of the multifamily industry. According to Alanis, every company “will be forced to adopt a new, high tech approach to data or risk being outpaced by the competition.” In part two of this series, Alanis goes deeper into the core benefits of BI and important aspects of a good BI strategy.
GlobeSt.com: What is Business Intelligence?
Justin Alanis: Business intelligence is the transformation of your raw unstructured data, often from multiple sources, into meaningful and useful information for business analysis purposes. In terms of multifamily real estate, this frequently involves unifying numerous disparate data sources (such as your property management system, lead tracking solution, and elsewhere), visualizing that data, and making it actionable.
GlobeSt.com: What are the core benefits of BI?
Alanis: Business Intelligence has two core benefits. Primarily, it creates an environment where you can make more informed and better decisions where previously you would have been in the dark. When you have access to actionable data and can slice and dice your data to spot outliers and trends in seconds that previously went undetected, it has a huge impact on your bottom line. Additionally, BI allows your company to move more quickly and efficiently. The manual nature of reporting is eliminated (saving you time) and questions can be answered instantly instead of after weeks of analysis (making you more nimble).
GlobeSt.com: What are the most important aspects of a good BI strategy?
Alanis: Through all of the BI implementations we have done, the biggest determinant of success is organizational commitment. Business intelligence changes the way that companies can make decisions. We have found that companies need to fully integrate their BI platform into their existing work flows and decision processes – whether it be through logging into the system daily or through integrating Rentlytics into their weekly Monday morning meetings. Once you begin to establish these good habits, making better decisions becomes the natural byproduct.
GlobeSt.com: How does a company measure or track the effectiveness of their BI strategy?
Alanis: Your business intelligence strategy needs to save you time by replacing a very manual process and it also needs to positively impact your bottom line. 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.
GlobeSt.com: How do different levels within an organization adopt BI? Regional managers / Asset Managers / CFOs / Analysts?
Alanis: A good BI solution should be used by all levels of an organization, from the CEO to the Community Manager. Each 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 around different and specific use cases is critical, as designing for the common denominator will often leave all users without the exact data they need to make insightful decisions.
GlobeSt.com: Do you think that there is a place for BI within smaller operators or just for the larger REITs?
Alanis: Prior to Rentlytics, business intelligence was only possible for larger organizations willing to commit the money and time necessary to build their own in house solution. While outliers exist, for most this was quite expensive; our research estimates one to two years and approximately $2 million in direct costs to build, with ongoing maintenance costs of at least $0.5 million—and this typically yields mixed results. But it is possible for every company to access high-quality business intelligence tailored to their needs, without spending and arm and a leg, and they can access it today, instead of two years from now.