Copyright: David Lawson - first published Property Week Feb 2005
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Ten years ago few professionals knew how to turn on a computer. Today it is hard to conceive handling the most simple tasks without software. But the revolution meant to transform the property industry has been held back by a simple flaw: few programs seem able to talk to each other. At every stage from valuer through surveyor, to manger and owner, information has to be laboriously extracted and re-typed. It is not that programs are written in different language. They just can’t seem to agree exactly, and computers can’t handle the slightest differences in terms.
Translators can be built in, much as Microsoft Word or Excel imports from similar word processors and spreadsheet compilers. But this means constant knowledge of the smallest changes. Otherwise when System A changes ‘rent’ to ‘rental’ or moves the information, System B loses the plot and spews out errors. ‘Imagine that happening to ten programs each with a thousand pieces of information,’ says Paul Halford, managing director of Kel Computing. He, along with several leading software producers, believed they cracked this problem back in the Nineties by creating a set of standards which acted as a kind of automatic translator.
PISCES basically sits between two programs. It doesn’t matter what each system calls something, or where they puts the information, as long as they are understandable by this intermediary. This streamlines everything from a simple deal to the most complex set of transactions. Information on a property can be passed from a valuer to a lawyer and fed into the client’s property management system – all without the delays and the inevitable inaccuracies of retyping.
PISCES recently reached the milestone of its 100th member - a mix of software suppliers, investors, landlords, lawyers and property managers. But after more than seven years a large part of the industry still remains aloof. It is not unusual to find incompatible programs running on the same PC in the same firm. Reluctance to change is understandable. Not everyone accepts that PISCES should be the universal standard. It can be expensive for suppliers to make their programs conform, while many users face the prospect of scrapping some systems altogether and starting again.
But they may have little choice. Property is increasingly moving online and electronic conveyancing is no longer a futuristic dream. The government is determined to speed up homebuying and investors are demanding the same for commercial property. Property details will need to be set out in a standard format so they can wing from agent to lender to lawyer without all the dreaded retyping. Home Inspection Reports will become standard in a couple of years and follow this pattern, says Roger De Boehmler, director general of the PISCES consortium.
This move to an electronic marketplace was anticipated. PISCES was built in a language called XTML – invisible to users but designed for web-based communication. Many of the services which pull together information on property from multiple sources such as the Land Registry, planning authorities and environmental data banks are already seeing the benefit. Searchflow says 15% of its manual searches used to be rejected because of errors but since using PISCES this has fallen to 1%..
Even small firms face mounting pressure if they wish to win business from some of the market’s leading players. The Halifax has told valuers and lawyers they have two years to conform or face exclusion from the 20% it holds of the UK lending market. Commercial property professionals face a similar stance from British Land. Lawyers have been quick to grasp the message and many are now working on systems to cope. One key influence is the prospective introduction of real estate investment trusts.
These will be far beyond the capacity of conventional conveyancing. Valuations will also be transformed, demanding fast and automatic processing of standardised information. Software suppliers like Kel and Circle are in the thick of the action, enabling data to be easily moved between programs.Other leading names are also involved. ECS has just revalidated its management software. But many remain unwilling to follow. Users must nag their suppliers to meet these challenges, says Halford.
He played a major role in launching PISCES. Initially it was seen as a method of importing valuation data into IPD to ensure critical performance indices were up to date. But it was also a response to users demanding freedom to move and manipulate the information they fed into software. Many are still locked into programs denying that basic right because they have not shouted loud enough.One excuse for marking time is the inevitable extra cost and disruption. But Halford points out that a compliant valuation and appraisal program like Kel’s Sigma can be rented for only £120 a day. Smart-DOCS, a revolutionary technique created by Real Decisions for transferring Word documents containing all the information needed in property transactions, starts at £2,500 per site for an unlimited number of users.
Viviane Morris, director of Real Decisions, says this is negligible compared with the real cost of sticking with traditional methods of re-entering information at every stage from letters of instruction through appraisal, leasing and management, with all the potential for delay and error.
This is not just another document assembly package, says Nick Matthews, director of creator Real Decisions. It is simple enough for anyone comfortable using Word and Excel but beneath the surface is all the information required at every stage of a property deal. Lawyers like CMS Cameron McKenna have swarmed to develop systems where paper will be replaced by electronic title documents. Laserform International has developed a method under which smart-DOCS can automatically complete complex documents such as Stamp Duty Land Tax forms.
Asset manager Stephen Spooner was an early PISCES convert after realizing the potential for speeding up deals. Valuations of potential investments which could take up to a week can now be transferred in minutes. The firm won a commendation at last year’s Effective IT Awards for the way it reduced the time taken over Stamp Duty returns to the Inland Revenue from as much as a day to as little as an hour. Fifteen other processes have been reengineered along similar lines. When Real Estate Investment Trusts (REITs) are introduced, the extra speed and cost saving will reduce minimum lot sizes from £200m to £50m, increasing the range of property that can be considered, he says.
Jones Lang LaSalle
The monotonous and error-prone system of extracting information from leases has been supplanted by taking data directly from lawyers. Clear standards also remove ambiguities common in paper leases. PISCES also opened the door to rapid revaluation of assets to review performance by enabling JLL to transfer complete portfolios between software from leading suppliers like Circle and Kel to its PropertyPlus system, which has been developed as a data warehouse, holding 10 years of information.
As the property industry goes global, the potential for conflicts increases. But the UK is leading the way in creating an international ‘language’. US players were so impressed with PISCES that they dumped their own data transfer efforts and the system now covers names as big as the US government and global giant Cisco.