The Internet is not a short-term phenomenon anymore; it is a way of life that is here to stay. I am sure that most of us have 'surfed' on the Web at one time or another to check out our favorite sports or news sites, research a hot stock tip by reviewing a corporate Web site or buy a present for our spouse or child. All of these are ways to improve our own life. But have you thought how the Internet can benefit your company?
Internet use is growing by leaps and bounds each day. Thousands of new users are joining the World Wide Web every day. While the majority of these users are individuals, it also includes businesses large and small looking to buy products from other businesses. A recent study done by Forrester Research demonstrates this fact: in 1998, business-to-business (b2b) e-commerce totaled around $43 million in 1998; by the end of 2003, b2b e-commerce may reach $1.3 billion.
With the advances in technology and increased competition on the Web, jumping on the "Information Superhighway" can now provide immediate impacts on your real estate company. Unlike some other technologies that take years to see real benefits, the Internet offers immediate value from day one. Some of the areas where your business can benefit include process automation, budget control, security and customer satisfaction.
Process Automation
One element that every employer looks for is how you can make employees more efficient with their time, thus making them more productive. Through the use of Internet Marketplaces, corporate real estate executives can automate some of the mundane processes in place, thus making the operations more productive and profitable. One of the first processes that the Internet can change is how Maintenance, Repair and Operating supplies are ordered.
Traditionally, the property manager or maintenance supervisor, would contract with a particular vendor for supplies; plumbing or electrical parts for example, and work with their contact whenever parts needed to be reordered. This typically entailed filling out paperwork, getting approvals and purchase order numbers and sending in a purchase order. It may take hours or even days to get everything in order before it reaches the vendor. Now multiple that time by 10 or more when you consider all of the other vendors that require the same process. The time an employee spends on these supplies grows even more when they have to physically travel from store to store to shop prices and buy supplies.
In these scenarios, it is fairly common that the cost of processing these orders exceed the value of goods or services being purchased once the employee's hourly rate is added into the equation.
With today's Internet capabilities, these previous time and cost inefficiencies are essentially eliminated. There are a variety of one-stop virtual marketplaces now in place that allow the property manager to search one comprehensive database to purchase MRO supplies from the convenience of their work area - seven days a week, 24 hours a day.
Using specification templates with drop down tables, property managers can now submit requests to several vendors for each to quote on products and services. What took days to accomplish in the past now takes minutes over the Internet and virtual marketplaces.
Additionally, Internet marketplaces provide efficiencies that management requires in operating its business. Since all transactions are completed electronically, a history of all activities is recorded. Reports can easily be pulled to determine the vendors name, product and quantity ordered and delivery. Managers can use the reporting capabilities in the virtual marketplace to gain better control of their inventory stock, re-order points and delivery schedules. Instead of collating several different sources for a monthly report, it can now be done with a touch of button.
Budget Controls Through Internet Procurement
One unique tactic that some Internet marketplaces provide is the ability to have greater budget control through a system of checks and balances. Through previous alternatives in monitoring a budget, fiscal controls often were lacking. For example, a manager requires a refrigerator for an apartment unit. Instead of going through their preferred vendor, the manager decides to go to the nearest store and buy one because it is convenient and fast. In more cases than not, the unit price of that product is probably much higher than what they would have paid through the contracted vendor. This type of spot buy, or "maverick purchase," typically sends a tight budget out of control. Often, no one knows of the severity caused by the spot buys until the fourth quarter.
To combat maverick purchases, real estate executives are using the Internet marketplaces to procure their MRO supplies. While everyone knows of the value that buying on the Internet provides, such as convenience and competitive pricing, among others, some sites also allow property managers and REIT owners to manage their budgets in an effective manner not possible through other purchasing models. Some unique benefits of the control system is the ability to set purchase limits in terms of the item, supplier or amount spent. When a manager has exceeded his/her limit, the electronic purchase order is sent via the Internet to an executive at a higher level for approval. Since the routing is done electronically, approvals are granted faster than the traditional method of filling out requests, placing it in someone's in-box, waiting for approval, and having it sent back the same way it originally came. With faster approvals, the impulse to buy off contract is reduced.
Online Security and Risk Assessment
Safety is one of the biggest factors facing the multi-housing and real estate industry. While cameras, monitors and security alarms are all necessary and very important, why not take an additional step and use the Internet to prevent possible crimes and lease problems from occurring in the first place.
In today's technological world, there are several online service companies that can provide the multi-housing industry with a complete criminal screening of an applicant. While this process may seem to some as an intrusion into someone's private life, it is a sound operating procedure for the real estate industry to incorporate into its corporate culture.
Once an applicant fills out their information, the application is sent to one of the service agencies for review. Searches can be completed to provide a complete report on an applicant's felony and misdemeanor conviction record. With a complete and accurate report on the applicant's past, managers can make an informed decision on whether or not the applicant is an appropriate candidate to reside within their community.
Another search that can be completed is a credit report. Searches can be completed to predict whether an applicant will pay the rent, and includes lease performance history, prior inquiries, and supplemental resource data designed to identify additional possible sources of information on applicants.
According to a recent article in the National Apartment Association magazine, Units, "Using a credit report can be essential to good decision-making. In addition to providing a snapshot of the financial health of an applicant, a credit report can also be a valuable source of additional information. If used properly, it can help verify the information provided on an application, disclose additional address or employment information, and provide other possible sources of information on an applicant."
The Internet and Customer Service
Whether it is a resident of one of your properties or a client you are serving with MRO services, the bottom line to any business success is keeping the confidence of the customer so they continue to come to you for more service. Using the Internet can immediately help you achieve higher customer satisfaction levels.
One tactic to incorporate into your customer service model is the use of a corporate Web site. It is important to have an identity on the Internet. Most of the larger REITs and multi-housing developments have creating, a site for their customers. The sites are designed to handle the most time consuming part of the customer service part of your business: fielding and answering questions. Most sites contain pertinent information that a customer would probably want to know, such as facts about a facility, pricing, amenities or benefits, services, hours of operation, etc. These types of information will normally answer the questions that are frequently asked via a phone call to the manager's office. Now, the same customer can go to the Internet for assistance. More and more customers prefer this method because its offers convenient and passive method of getting what they are looking for.
An additional element to add to the Web site is a "contact" navigation button. If your customer doesn't get the answer they were looking for in the site's information, they can "contact" you through an e-mail letter with their specific question. The e-mail is sent from the Web site to the appropriate contact's e-mail inbox, where they can answer the question at their convenience. The contact feature can also be used as a feedback tool to measure satisfaction levels. As the old "suggestion boxes" provided a way for workers to tell their bosses how to improve the workplace, a feedback option would allow your customers to inform you of problems or concerns, as well as compliments or kudos for current programs or additions. Inclusion grows customer loyalty, which is what every business seeks.
If you are a supplier of services or products to the real estate industry, you can take the Web site customer service even further by offering items such as product tracking, online scheduling and the previously discussed online ordering.
Wrap-Up
The benefits of the Internet are widely known. However, what may not be understood is the difference the Internet can make from the first day of its implementation into a corporate culture. With little investment, unless you an elaborate Web site is created, the Internet can make an immediate positive impact on your operating procedures, production levels, financial statements and on customer satisfaction levels.
