Most multifamily operators know they should put “gut feelings” aside in exchange for technologies that can turn raw data into meaningful information for better decision making. And while on an intellectual level they know that a data-driven business is more effective strategically, tactically and operationally, the exact way to go about it can be daunting.
Not so for leading multifamily operators. They know exactly how to accomplish this through the use of business intelligence (BI). Continue reading for 3 ways leading multifamily operators use BI to improve decision making.
1. Role-based Dashboards
A role-based dashboard is like having a boss in a box. Like a good mentor with tons of experience, a role-based dashboard can guide employees through business processes and teach them what’s important until those work principles are ingrained into their day-to-day behavior.
For community managers, regional managers, service managers and others, personal dashboards based on their role can be viewed in real time. When employees are directed through their dashboards on what needs to be done, great things start to happen. Besides dramatically improving efficiency, employees are actually being trained to be better at their jobs. By having actionable items in their queue across project portfolios, employees must notice, read and react accordingly. This improves transparency, accountability and decision-making skills in their designated roles.
This is one of the most important features of BI. By building the brains into the system with the right set of key performance indicators, lower and mid-level managers know immediately where to put their attention and what they need to do about it.
Role-based dashboards best practices
To make role-based dashboards work, they must be simple to use. Overly complex dashboards overwhelm people and push them away. The whole point of BI is to give employees something that makes their job easier by highlighting actionable items in a very obvious way. While designers may think that really big and complex dashboards make them look like great designers, it creates information overload for the user. Sometimes, less is more.
It should never take more than three clicks, preferably no more than two, to get to the heart of what the user needs. Too many and it means the system is poorly designed. As humans, we're wired to categorize information. As a result of this way of thinking, sometimes designers build interfaces that resemble filing cabinets. They create complex dashboards based on papers within files, files within drawers, drawers within filing cabinets, filing cabinets within rooms, etc. For the user, that’s four levels deep and way too much. On a dashboard, you don't have to build those complex trees. You can have data interrelate in networked ways behind the scenes. Anything more than three clicks away, preferably two, and you’re asking the user to do too much.
2. They Find Purple People
One of the biggest impediments to developing and using robust BI platforms and dashboards is the lack of “purple people.” What is a purple person? If you think of business people as blue and tech and analytical people as red, then a purple person is someone who understands both worlds and can bridge the gap.
When you don't have a purple person, what frequently happens is the IT department takes over. They perform a requirements analysis, build a system, and then get frustrated because it’s not being used. On the flip side, the users of the new system are frustrated, too. It does nothing to make their daily workflow better or provide them with what they need. It’s a mismatch.
What went wrong? IT interviewed and shadowed someone in the business area. They thought they knew what the user wanted and how they performed their business. But interviewing and shadowing isn’t enough. You need a product owner who understands both worlds and can guide the process in a way that fits the business. That doesn't mean you don't need to bring it across functional teams, do the interviews to build out the user stories and shadow somebody to watch exactly how they perform their job. You do. But you also need a purple person who can correctly interpret what was discovered and ensure a business-centric design and implementation.
Purple people are rare to find, but you know when you meet one. They are usually both talented and experienced. They see the numbers in the business and the business in the numbers. They are a critical thinker, curious and have a thick skin. They may be working in technology but show an inclination for business, or vice versa. While technologically capable, their focus is on making it useful in a business or organizational context. Purple people speak the language of both business and technology and serve as a translator between those worlds. Both business and technology skills are valuable in themselves, but they are most valuable when combined.
You can outsource a purple person for six months, a year, even two years to bridge a need. But the most successful multifamily operators develop purple people in-house. Most importantly, don’t be a purple person eater! Don’t be the type of multifamily operator that resists purple people and makes them fail. Purple people are worth their weight in gold.
3. Utilize Analytics
Both BI ad-hoc analytics and predictive analytics are huge tools used by successful multifamily operators. Here is the difference:
Ad-hoc analysis
If you are a multifamily operator with weak BI, your analysts end up spending most of their time doing data collation and much less time doing analysis. For instance, when the COO or CEO asks a question, the analyst spends hours, sometimes days pulling the analysis together. With strong BI, the answer that used to take hours or days can be done in minutes or seconds.
Analysts often experience burnout because they spend their time chasing data instead of doing what they love—analyzing the data. Automating BI to collate data goes a long way toward analyst job satisfaction and retention.
Predictive Analytics
What can really make a multifamily operator leave competitors in the dust is predictive analytics (complex mathematics to determine or forecast probability outcomes). While ad hoc analysis or reporting is important (even necessary) rarely do reports make it obvious what to do next or what to change. That’s where predictive analytics comes into play.
While not widespread in multifamily housing, there are some predictive analytics already in use in the industry, including credit scoring to predict likely bad debt; pricing and revenue management systems to predict optimal rents to balance occupancy and yield; and remedy management to predict and reduce the number of incidents handled, improve resolution times and prevent future incidents.
Other ways that multifamily operators could use BI for more predictive analytics include analyzing job market, housing and seasonality data to forecast absorption, renter demand and propensity to pay. Predictive analytics might also take into account lead scoring to identify the right marketing modality for the renter or prospective renter. Is this somebody that should get a phone call, a text or an email? And when? And with what content?
While predictive analytics is nothing new to multifamily operations, this area within BI will continue to expand and is one of the most important and exciting aspects of BI.
Advances in technology and BI have triggered a dynamic change in the way multifamily operators market to customers. Multifamily operators who learn how to harness the power of BI with easy-to-use, role-based dashboards have quick access to data that can provide important analytics to help understand the modern customer’s journey.
More than ever, operators today need to understand their day-to-day business processes in a more analytical way. Whether it’s through dashboards, analytics or purple people, do what the leading multifamily operators do and use your BI in the most powerful way possible.