Integration Issues Continue to Challenge the Industry

With $2.5 billion in venture capital funding dedicated to commercialreal estate technology investments, apartment experts are preparing for a wave of new solutions for apartment operators in the next 18 to 24 months.  To capitalize on all that innovation, it’s critical for the industry to solve what industry insiders call the “integration obstacle.”

To that end, a large property owner, a startup operator and a technology standards expert came together for a panel discussion of vexing integration challenges in the apartment sector during the 2017 NMHC OPTECH Conference & Exposition.  While they agreed there is no magic bullet, they did take some consolation in the fact that these issues are not unique to the apartment sector.

Armand Rabinowitz, senior director of strategy and workgroups at Hospitality Technology Next Generation (HTNG), a non-profit that for the past 15 years had developed data standards for that sector to facilitate integration, described some of the obstacles the restaurant industry experienced moving to online reservations.

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When Open Table was founded not only did it face a pay-to-play integration model, but few restaurants even had Internet access, he shared.  The company ended up having to pay to run DSL lines to the restaurants.  His point was that while the firm and HTNG were philosophically against pay-to-play as a concept, they realized they had to think bigger to see the benefits of it all.

NMHC and HTNG also announced during the panel that they are partnering to expand the MITS standards that enabled the first wave of innovation in our sector.  The partnership makes sense, said Armand, because there is a lot of synergy between our sectors since some of our providers also operate in the hospitality sector and have somewhat comparable needs.

HTNG explained their role in enabling innovation.  “We bring people together to figure out what they want to do.  We try to get in early to attack a new technology and identify some common use cases so startups can short circuit that process, download the specs and not have to guess at what use cases the sector needs to develop.”

HTNG also brings both end-users and software providers together in developing the standards and use cases so apartment operators can describe the solutions they are seeking and software providers can explain the limitations they face in meeting those expectations.

“At the end of the day, it’s all about building trust,” said Rabinowitz.  “Ultimately common standards can benefit everyone, including the legacy software providers.  The goal is to get all the parties involved to not only meet the demands of end users, but also to reduce the workload of property management systems so they aren’t backlogged trying to certify individual solutions.”

Scott Pechersky, senior vice president of technology with Alliance Residential, agreed that a lack of a standards might stifle innovation in the industry, but also said the fact that a new supplier is an “approved vendor” with the existing property management systems tells him that companies are serious about serving the industry and have done their homework.

“Frankly, it helps me sell their services to third-party operators,” he said. Nevertheless, he’d like to see a future where any developer could download a toolkit and adopt an integration instead of having individual vendor APIs.

Demetri Themelis, cofounder of Knock Rentals (NMHC’s 2016 Launch Pad winner), noted that from his standpoint, standards are all about enabling competition, not just innovation.  “No one wants the legacy systems to stop pursuing the full stack solution.  We understand why that makes sense for them.  We know we have a competition overlap and we think that we all serve the operator at the end of the day and it’s in the industry’s best interest to have that competition.”

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Armand added that it’s easiest to think of data standards in the context of Maslow’s Hierarchy.  Everyone needs technology that is easy to use and train, but every supplier can still excel and create unique value at the top of that base level of service and infrastructure.  With standards, firms can focus on where they can innovate and create more value.

Standards may help ease some of the integration challenges, but Themelis reminded attendees that the industry is a very complex sector.  Firms have different investment strategies, ownership types, management structures and they all want to consume data differently.

To that end, the effort of HTNG to help the industry develop some common use cases so new companies coming into the sector won’t have to guess at what the sector needs may be as helpful as any standard.

In terms of next steps, NMHC and HNTG have signed a Memorandum of Understanding to have HTNG form working groups comprised of the apartment industry and technology providers to pursue new standards, like for chatbots for example, as well as specific updates to the existing standards. NMHC will facilitate industry engagement and continue to host the standards on mitsproject.org. Our goal is to have operators engaged and talking about their use cases and software providers talking about their capabilities.

If you are interested in participating, contact Rick Haughey, NMHC’s vice president of industry technology initiatives, at 202/974-2375 or rhaughey@nmhc.org.

To view the article, visit NMHC.