In advance of the impending Multifamily Revenue Management Conference, we were asked by UNITS Magazine to jot down some thoughts on some of the more salient trends in revenue management. For those not familiar, UNITS Magazine is the largest trade magazine for the multifamily industry. Please check out our section below. For the full article complete with the opinions of others industry professionals, click here.
Revenue Management: From Exclusivity to the Mainstream
For nearly a year, we have been hard at work on what we truly believe is the next generation of revenue management software for the multifamily industry. While developing our product, we have been able to witness widespread adoption seep through the industry as well as the emergence of some new trends. Most notably, however, we have observed that revenue management software (and the culture that comes with it) is no longer the exclusive domain of REITs and large corporates. As articles like “When Apartment Rents Climb, Landlords Can Say ‘The Computer Did It’” in the November 2011 New York Times will attest, Revenue management is slowly becoming the mainstream.
Enterprise Software Leads Revenue Management Software
Interestingly enough, the trends that have allowed for this movement to the mainstream have largely been a reflection of innovations in enterprise software as a whole. Over the past several years, enterprise software has undergone a disruptive revolution to allow it to adapt to rapidly shifting behaviors in the workplace.As such, we have seen things like cloud computing and customer relationship management systems become products businesses cannot live without.We are confident that revenue management software will approach ubiquity among multifamily professionals as it continues to take its cues from rapidly evolving enterprise software.Three trends remain prominent in this road to ubiquity:
- From the Ground to the Cloud – For the longest time, revenue management was synonymous with the clunky and expensive physical servers that housed data and allowed such systems to run. Now, with the maturation of remote computing services, revenue management is migrating from the ground to the cloud. The advantages are numerous as data can be manipulated easier, storage capacity is greater, integrations with other software systems are seamless, and cost structures are much lower. Most importantly, though, access is no longer a barrier. Revenue management systems can now be accessed from anywhere at any time to allow for 24/7 monitoring of portfolio data.
- Revenue Management Software “Consumerized”? – In contrast to prior revenue management iterations with dizzying screens of numbers in columns and rows, the current crop of software is simpler and actually aesthetically pleasing. These products are reminiscent of our favorite consumer-friendly websites, as they are now being built to favor design and user experience. With simpler interfaces, smaller and leaner operations are less resistant to adopting them, given that they are not far removed from other software applications that are in regular use.
- Advancing Methodologies – Finally, we are seeing substantial innovation in data science. Predictive analytics, operations research, and other disciplines that comprise revenue management are advancing before our eyes. As more attention has been given to these disciplines, novel techniques are emerging that are allowing for movement beyond the demand heuristic approach that more or less dominated the existing revenue management landscape. In lockstep with the actual evolution of the techniques has been the ability to implement these techniques. With the prevalence of open source software that allows users to actively contribute to the software development of statistical packages, data scientists are able to test new techniques quicker than ever before.