Big Data Has a Big Future in the Apartment Industry
Big data is the hot buzzword in the business world today. When you Google the term “big data” you get more than 985,000,000 results. That’s big. Bigger than Justin Bieber big (772,000,000 results).
But the term “big data” encompasses so much more than a series of zeros and ones. The apartment industry’s movers and shakers who attended last week’s NMHC OpTech 2012 conference used words and phrases such as business intelligence, risk analysis, benchmarking, and predictive analytics to describe big data.
Tim Blackwell, Ace Reporter for Property Management Insider, and I attended several sessions at NMHC OpTech and we couldn’t help but notice that big data has a big future in the apartment industry. Here are a few of our observations.
Business Intelligence Starts with Clean Data
You know the saying, “Garbage in, garbage out?” Same goes for your data. One problem is that there are several entry points for your data: home office, site personnel, and vendors like utility companies. While it’s sometimes necessary to utilize technology providers to help clean up utility data, you might need a culture shift when it comes to data entry. Put another way, the people entering the data need to care about the quality of the data. For example, do you only allow a certain number of marketing sources to be entered into the system via a drop-down list or is it a little more of a free-for-all? The cleaner the data, the sharper the analytics.
Establish Benchmarks for Efficiences and Improvements
One of the first and most important things you can do with your big data is establishing benchmarks. It’s hard to know where you need to go if you don’t know where you are. One example of this, says Velocity President John Lis, is improving utility management. Whether you call it sustainability, going green, or just protecting the bottom line, once property owners and residents understand what’s behind the numbers, intelligent decisions can be made to cut costs and even create efficiencies that lead to environmental improvements.
Business Analytics Don’t Have to Be Complex
But don’t overanalyze the data. It’s okay to work with the basics, said one speaker who shared an in-depth look at an energy retrofit of a Boston affordable housing property built in the 1960 that began with an overhaul of insulation to reduce energy bills. And once the data is in, start with the low-hanging fruit first, just as those energy specialists are attempting to do in an effort to establish an ENERGY STAR® rating for the apartment industry. All of the data being acquired may not translate into a rating, they say, but there will be some basic takeaways to allow properties to become energy efficient in some areas.
Business Intelligence, When Done Right, Compels You to Action
I’m paraphrasing from the session Multifamily Technology’s Hottest Topics session, but reports are like Coca-Cola: Once you see one report you’re left unsatisfied until you see another. For panelists, current reporting is good for telling you what already happened but not what is going on in the marketplace or outside the four walls of your company. However, all are looking forward to business intelligence systems. As one professional stated, “Business intelligence, when done right, compels you to action.”
Based on what I heard at NMHC OpTech, I’m guessing there are three main areas of the apartment industry that will benefit from robust business intelligence systems featuring some form of predictive analytics: revenue management, centralized reporting, and risk mitigation. After decades of data collection, property management software companies are on the verge of some very robust reporting.
It’s All About the Information
Is big data, business intelligence, and analytics merely the hot button issue of the moment? I would argue no. For those of you old enough to remember, I submit to you this speech from the 1992 motion picture “Sneakers,” starring Robert Redford and Ben Kingsley, as Exhibit A that big data has always been a big deal.
Did you attend this year’s NMHC OpTech conference? Did you come away with any of the same impressions about big data and business intelligence that we did? Share yours in the comments below.