Power cuts could spell data disaster
IT plays key role boosting turnover
'Propcasts' put property onto mobiles
IBM automates real estate management
'Scan and dump' promises paperless office
Copyright: David Lawson - first published Property Week September2006
Power cuts could spell data disaster
Historians will look back and wonder why New Yorkers exploded into sexual frenzy every 10 years or so around the turn of this century. What else could explain the birth rate surging in the middle of each decade? The explanation is more prosaic. Power failures have struck with monotonous regularity since the Sixties, and when the lights go out what else is there to do but snuggle down?
London’s population will not generate the same curiosity, as our electricity has been more resilient. While New York flickered again last month, our failure mainly crippled offices during daylight. And the last thing workers needed during a heatwave was more sweaty exercise. But with global warming adding more air-conditioning to already soaring demand from power-hungry technology, dying firms rather than crying babies could be the most obvious impact.
Computers don’t like dodgy power. When they crash, files are lost and vital data garbled. Recovering from even a short break may be difficult, if not impossible. Yet the twin threats of an increasingly overloaded power system and possible terrorist attacks continue to be ignored. More than 40% of firms have no disaster recovery plans, according to the London Chamber of Commerce. Imagine trying to run a property consultancy after losing 10 years of management or valuation information. Even if stored on paper, finding it could be a nightmare, and rebuilding computer databases costs a fortune. IT analyst Gartner Group says half of firms that lost data in the past have gone bust.
Backing up should be a priority. Even if the power stays on and bomb threats decline, data can still be lost by everyday stupidity or bad luck. Gartner also estimates that smaller firms leave half their critical information on desktop PCs scattered around offices rather than secure servers. The explosion of portables and other mobiles means some professionals have even taken to carrying around key information on these fragile and easily-stolen gizmos.
Big firms take no chances, backing up information daily. But even they can’t afford to be complacent. King Sturge found the projected growth of data flowing around 100 offices across four continents would overwhelm its conventional tape backups and already spilling beyond the normal overnight sessions. A recovery strategy was also required so the firm could be swiftly back in business after a power drop or disaster, says Anthony Billingy, national IT director. It has shifted to a specialist service run by InTechnology which continuously copies data to remote data centres.
The sheer scale of information some firms handle is illustrated by another InTechnology convert, Galliford Try, the construction and housebuilding firm, which is expected to generate five terabytes from 10 offices which under a new five-year contract. That is equivalent to a quarter of the information stored in the US Library of Congress. Yet even small firms crunch vast amounts of data. A medium-sized property consultant could fill the hard disks on 100 desktops or notebooks every day.
Backing up such massive amounts of data was difficult and expensive until broadband became widely available, but proliferation of fast data lines means there is now little excuse. Technology has also advanced to reduce the potential burden, sniffing out only data which has been altered is copied. ‘This reduces the backup, as we know that only around 10% of our total data changes every day,’ says Billingy.
A range of backup services have sprung up over the last few years but a key factor in selecting the right one is security, says Billingy. Powerful encryption and a private line are vital to keep prying eyes from sensitive data. Retrieval speed is also essential. Data can be prioritised according to whether it needs to be accessed immediately. More than two-thirds of information becomes inactive within a month, says InTechnology sales director Andrew Stuart. Business critical information can be copied for instant retrieval while the rest is archived.
Galliford Try’s contract is estimated to be worth more than £1m over five years but smaller firms can find peace of mind for a fraction of that cost, ranging from a server safely secured in a data centre for around £5,000 a year to automated online services such as BT Datasure which charge only around £5-£25 a month for up to 10Gb of data. Working from home or portable computers is no barrier, as these can be set up to continuously back up key files. Search online for names such as Netstore, XDrive and IBackup, although new ones are regularly emerging, so prices could come down. Microsoft and Google are understood to be considering launching their own services, possibly as free add-ons.
IT plays key role boosting turnover
In a world with more processing power in the average car than was used to land the first man on the moon, it is easy to forget that 15 years ago most property professionals couldn’t even turn on a computer. Chris Powell was one, yet he now leads one of the most technically astute agencies in the business. Churston Heard regularly tops the charts for retail investment advice after a decade of breathless growth.
Chief executive Powell is coy about attributing this to technology, pointing out that the market has grown out of recognition since the days of typewriters. But he does admit that CH might still be a tiddler among whales if he had not read an article in Property Week back in the Nineties extolling the advantages of property software. ‘We needed an edge to compete with the giants,’ he says. So he called Keith Noble, founder of software consultant BoE, and they whipped up a system called Property Desktop which cut through a blizzard of paperwork to organise information in the office.
That edge has been honed ever since and helped the firm generate profits of around £800,000 on a turnover of more than £15.5m last year. The figures might be dwarfed by whales like CBRE or JLL but with a mere 57 fee-earners, CH is among the top few UK consultants based on earnings per head.
This confirms a promise made when computers emerged: making information available to big and small firms alike would level the playing field. But another pledge has been less robust. Technology was widely anticipated to cut costs. That myth was laid to rest at this year’s US Realcomm conference when a debate headed by leading real estate commentator Peter Pike revealed that the expense of computers and software means it costs more to run an agency than 10 years ago.
So where do the soaring profits come from? The key has been using technology to boost turnover. Listing services, for instance, have unleashed a tidal wave of dealing. The investment boom sweeping the globe could never have happened without computers. Powell realised the potential early and played an important role helping set up Propex, the leading information base which handled £800bn of property last year. So it is surprising that he rejects the notion that information brings inevitable success.
The key is not generating more data but how it is used. Agents are actually drowning in information. ‘We all face overload,’ he says. Most firms have software which automates and organises everything from simple word processing and email to property management and valuation. But there is still a long way to go making it user-friendly. CH has continued honing its edge by working on better ways to display and analyse property. Document management is the latest big thing, ensuring every scrap of information on a property can be brought together in a single template. Then a few keystrokes generate that information in multiple formats: in Word for online reports, PDF for brochures and Flash for web sites.
The firm has been working up a system created by Hummingbird. ‘We are not there yet,’ says Powell. ‘The software is still not quite friendly enough. But it will be.’
The ideal would be a Bloomberg-style online service providing everything from news and market prices to investment opportunities and sales particulars. This would seamlessly integrate with internal management information. One stumbling block is the wide variety of systems used by different agents but this is being addressed through protocols called XTML – a sophisticated computer language for web pages - which enables greater integration and easier interchange.
The aim is to call up an individual property and harvest every scrap of information from inside and outside, ranging from local rents and planning information to valuation and occupation history. CH aims to go one step further, making the information more user friendly by feeding this into Goad maps, the industry standard for retail agency, so everything is retrieved by a simple click on a site map.
'Propcasts' put property onto mobiles
It’s hard to walk the streets nowadays without being elbowed off the kerb by some head-bowed zombie prodding text into a phone. Take care not to lash out, however: the next one you bump into may be about to put money in your pocket. More than half of mobiles can now receive video clips and many of those zombies are peering at a football match or trailer of the latest hot film. The technology is not yet advanced enough to grab more than a few seconds of action but that is enough to bet that some pavement-hoggers will be flicking through views of an office block or house.
It is common nowadays to see addresses of web sites on sale boards boasting ‘walkarounds’ but the odds are a potential punter will have forgotten it by the time they are back at the office desktop. Mobiles offer instant gratification. Internet speeds and mobile technology have advanced enough to make remote viewing practical. From this month Prudential will include a code on boards and adverts for its giant Green Park business development west of London which will link mobiles with a web site. Passers will be able to call up information such as location maps and property specifications. Prudential could eventually add video clips, giving a taste of interior layouts which normally require an arranged visit.
St James Homes is already using such ‘tasters’ on its flagship One SE8 scheme in London. Regional sales director Michelle Harris says the impact on inquiries has been ‘fantastic’. The package, called PROPtxt, involves sending a text message to the number on a board or advert and entering a keyword identifying the developer. A message then comes back with a link to a web site containing the video and other information such as pictures and PDF brochures.
One key advantage is that information is available on evenings and weekends when agents’ offices are closed. The site is not just an information store, however. Developers have complete control to create different codes for each site or advert to analyse the effectiveness of various advertising media. It also provides vital marketing link. St James can send alerts and event invitations to potential clients who have asked for information, says Harris.
PROPtxt comes in different versions, optimised by mobile media specialist Kodime for residential or commercial property as well as multi-office configuration for estate agency chains, says managing director Nico Köpke. The package, which is licensed on a monthly basis, is already generating thousands of calls to the web site. But video clips will be limited until the next generation of ‘broadcast’ mobiles become widespread, says Lee Helliar, managing director of Real Property Tours, which produces video sequences.
In the meantime agents are taking advantage of the Ipod which seems to hang from the ears of countless commuters. Most will be soaking up their favourite tunes or catching up with the news via a proliferation of ‘podcasts’ that can now be downloaded from the internet. But the huge storage capacity of the latest of these little electronic wonders is also suitable for more comprehensive video clips than can be held on a mobile.
Earlier this year Helliar launched the first ‘propcast’ - a showcase programme featuring small excerpts of the property video tours introduced by two presenters. These are only a section of more comprehensive walkarounds produced for both residential and commercial agents and normally handed out on CD or available for downloading from a web page.
‘Video tours for marketing have become a reality since the expansion of broadband to over 10m homes combined with the public's increasing appetite for video on demand though the internet and the boom of the video iPod,’ says Helliar.
People don’t have time to traipse around homes, while commercial occupiers often despair at wasting weeks or months viewing unsuitable accommodation. They can cut away much of the plainly unsuitable property by quick flicks through a phone or more comprehensive walkarounds on a computer or iPod. Potential occupiers can download a selection of properties onto a desktop or notebook, transfer to an iPod and view when they have spare time or on a train or bus to work. Some agents are also installing viewing areas with plasma screens, providing more comprehensive presentations to back up clips available on the web.
A property is filmed only once but produced in different ways to suit DVD, the web or iPod. Clips for mobiles are cut to 30secs or so, reflecting their main weakness – the cost and speed of downloading. Presentations can also be tailored to meet client demands. Homes can be separated into different areas or price bands, and commercial premises into different types. The next big step forward will be when the government orders that analogue signals which run the current TV system are switched off in favour of digital transmissions. This will release the frequencies required to enable a new generation of broadcast phones, and video will really take off, says Helliar.
IBM automates real estate management
Outsourcing has plenty of detractors. Private Eye took great delight passing on moans from BBC luvvies about how much it cost to change a light bulb during the period when Trillium ran its property services. Then there are endless anecdotes, such as extracting information about a rent review when ‘Kevin in accounts’ suffers some confusion between buildings in Swindon and Swinton. Quite understandable, of course, when he lives in Mumbai.
No jokes, of course, about the expense of the old regime maintaining an internal regiment of bulb-changers at the Beeb, nor about how your chief executive’s grasp of geography is even more tenuous than that of Indian call centre operators. The BBC/Trillium marriage has been dissolved but replaced by another partnership. No amount of whingeing will reverse the trend to outsource everything from toilet cleaning to leasing. This creates a huge administrative problem: how do you keep track of so many suppliers?
Thresher Group’s in-house property team was reaching breaking point a few years ago, with more than a third of its 2,000 branches due for lease review or renewal. A cocktail of outsourcing and new software was brought in to relieve the pressure. Technology consultant Financial Objects replaced paper-based processes with its gvas management system which centralised data and enabled lawyers, surveyors and managers access on a single network. Costs were slashed by 10% and in five years the property department has been cut from 80 to only eight staff.
But the most efficient administration can still leave occupiers in the dark. There seems little available that allows an occupier to take in key data from a range of suppliers and transform it so you can see the whole picture. The occupier may, for instance, want to analyse the total cost of occupation per square foot of a diverse mass of buildings, but the data is often scattered among a range of facilities and property partners, each using its own software.
Most use a mix of what could be described as ‘first-generation’ programs. Legal title, rents, lease dates and so on will be held in an estate management system such as TRAMPS; maintenance and cleaning is handled by facilities management software like Concept 500 or QFM; while refurbishing and new build flow through tools such as Primavera and Cascade, designed to manage complex corporate projects
Recently, a ‘second generation’ has begun to weave together these strands as the property systems marketplace coalesces. Some gain functionality by acquiring other companies, such as ECS. Others try to integrate this new facility, such as SAP, Oracle and TRIRIGA. Outsourcing partners also offer some hope as they widen their range of services. FM specialists are taking on corporate asset management while property consultants are working from the other direction by setting up FM departments.
A key selling point for outsourcing is that partners take over the whole IT burden, but that means they hold most of the data occupiers require. It may be accessible through shared networks but not in the right form. Even where partners use the same software, each will have tweaked it to their own needs. IBM has outsourced most support for its extensive building portfolio across 10 countries in Europe, the Middle East and Asia. Real estate managers were anxious to retain control of key data but avoid stifling the innovation that outsourced suppliers bring. They have developed a solution which cuts through the fog by extracting, for example, financial data from SAP, leasing costs and key dates from TRAMPS, facilities management data from Maximo and space data from Archibus.
This kind of automation is essential for strategic property planning. IBM can drill down to compare the actual usage of a building against its capacity and draw a picture of total costs per building. The system has allowed the firm to plan space needs against known usage patterns and monitor the true cost of property operations – all crucial in an economic climate where property, like any other corporate asset, must deliver maximum return on investment.
IBM’s real estate consulting practice is now adding this capability to the services it offers - either by building similar databases for occupiers to operate themselves or by providing the data as a property management information service independent of outsourced suppliers.
Central performance management means even routine administration can be streamlined. To ascertain the problems during an environmental test, IBM needed to check the cost and feasibility of replacing hot air dryers in cloakrooms with conventional towels. Traditionally, spreadsheet questionnaires would have been issued to local FM or building managers asking for the costs and implications of making the changes. These questionnaires would have to be manually distributed, chased up, collated and analysed.
Now, it simple requires completing a web-based form which then links space, cost and the questions to update the central database immediately. Results quickly highlight tardy response. No more excuses such as, ‘It’s in the post’. The same approach enables building managers to order services. Once a year, they simply tick the relevant boxes via a web-form and, once agreed, the results are available for FM suppliers to check their responsibilities and for the property help desk to see what services each building is entitled to.
'Scan and dump' promises paperless office
Whatever happened to the paperless office? Electronic wizardry was meant to clear desks, sweep away endless racks of yellowing files and eliminate the centuries-old process of smearing ink on dead trees. If you are reading this at work, look around at the overflowing in-trays, groaning shelves, floors awash with disintegrating folders and a queue gossiping madly at the printer. Things don’t get much better in a thousand cluttered home offices, where tech-savvy 21st century workers were meant to run mega-corporations from a cupboard in the spare room
‘The completely paperless office still remains more a myth than reality,’ admits Tony Bray, director of document management specialist Version One, despite the fact that the technology to scan every letter, invoice and floorplan has been around for almost 20 years.
The reality is that ‘scanning and dumping’ has been no quicker than slipping sheaves of paper into folders, so why bother? Then there are fusty finance directors who refuse to trust that copies are accurate, so space remains reserved for acres of filing. Add to that the fiddly technicalities of extracting what you need from the bowels of the machine – then printing it again to send off to a client – and it is understandable why paper remains supreme.
But advances in technology are finally eliminating such drawbacks. Scanners can race through multiple shapes and sizes to produce near-perfect copies, while error-correcting optical character recognition [OCR] software has advanced enough to produce almost faultless translations. The key to a surge in paper elimination, however, is the way document management [DM] systems now merge seamlessly into accounting and enterprise management programs. Anything from an invoice to a floorplan can be tracked and retrieved at a key stroke.
Relocation often stimulates businesses to look hard at the way they work, and DM is no exception. Horbury Building Systems, which has fitted out schemes such as Beetham’s Manchester Hilton, faced a reduction in paper storage from 100 sq metres to 30 sq metres when moving office. There was no way this could cope with a torrent of paper including 700 weekly timesheets and 400 invoices a month. Now documents are scanned into an electronic database and the originals destroyed.
Installing such a system can cost anything from a few thousand to a several hundred thousand pounds and typically pays for itself within six months, says Version One, which designed and installed the Horbury system. But property managers and valuers will testify that getting approval for new software is still a huge battle against boards who view such spending as unrecoverable costs.
DM programs have an easier time because they fall within the territory of company administration. Tight integration with Horbury’s Intellect accounting software has made finance director Leigh Churchill a big fan, as documents can now located and retrieved in seconds, saving time on mundane tasks like photocopying and filing. He also expects to improve cashflow and supplier relations through swifter processing of invoices. Nothing is lost or misfiled and any authorised manager can call up an invoice or order then send it as an email, fax or PDF document to customer or supplier.
Another Version One customer, Icopal, the world’s largest manufacturer of roofing and building membranes, will save at least £100,000 a year on stationery, printing postage and storage, according to company secretary Chris Finnerty. And that is before savings on time spent filing and eliminating 100sq metres of storage space. The same message comes from outside the property industry. Regional newspaper publisher Johnston Press saves £500,000 a year processing and storing more than 700,000 documents while Specsavers expects to cut time on data entry by 80%, according to Version One director Tony Bray.
Electronic management is not just about saving paper. Email and web forms mean much business administration never goes near a dead tree. DM software takes this in its stride, treating everything as just a bunch of electrons to be shifted around. Once managers adopt this laid-back approach, the paperless office will finally come of age.
Leading property group Grainger is about to bring some SNAP into the way it handles paperwork. Mangers in Newcastle, Altrincham and Putney will pilot an electronic system dubbed Project Jericho. SNAP stands for Scan, Notify, Approve and Pay. It springs from analysis by Grainger which revealed:
• A backlog of invoice payments of two to five weeks.
• Lost invoices meant a copy was paid then paid again if the original appeared.
• Time was wasted filling header sheets, sending invoices around the country, chasing them and dealing with queries from suppliers.
• Money was wasted posting between offices.
• Management had problems determining the volume of invoices, any bottlenecks, which were overdue, where they were in the approvals chain and the value of unpaid invoices.
The new process aims to:
• reduce the time to approve and pay invoices
• reduce the risk of paying duplicate invoices
• provide instant access to information for dealing with queries from suppliers
• eliminate administration and postage cost of passing invoices between offices
• provide full management information, including trend analysis.
• Improved relationships with suppliers.
• Opportunity to negotiate more favourable terms based on earlier payment