3 Ways To Quantify the Value of Asset Tagging
You are the Maintenance Manager for a 20,000-unit multifamily portfolio.
About 7,000 of those units have been acquired in the last year. The acquisitions team is saying there will be another 12,000 this year.
Meanwhile, your team has only grown marginally. Truth is, even if you had the time and budget to hire the staff you need, there simply aren’t enough people in the labor pool to hire.
So, you’ll continue with what you’ve got.
The stated goal of these acquisitions is to bring best practices to the property management and operations to maximize controllable NOI.
But the first step is just figuring out what exists.
Some of the properties are garden style, so that makes it relatively easy from a critical equipment perspective. But whether it’s garden style or high-rise properties, 12,000 additional units means 12,000 additional refrigerators, thousands of washers and dryers, and an unknown number of small HVAC units.
Before now, when the portfolio was more stable, the process would be to have a technician to record all these individual assets (plus their age and relative condition) with pen and paper. They’d come back to the office and input those records into spreadsheets and make sure those files were in the right shared folder.
Today, that process is a fool’s errand. By the time it’s done, the initial spreadsheets must be updated. There’s simply too much to keep track of and replacements are already starting to be reactive rather than according to a plan
There must be a better way.
What is a Digital Transformation Anyway?
If you only read the headlines, you’d think that buildings were already well on their way to being giant Tesla’s – autonomously operating themselves according to the real-time conditions.
The realty for the vast majority of properties, definitely in multifamily but also in office, hospitality, retail and industrial, is that most workflows are still being done not only manually, but on paper.
That translates to 30% of an operator’s day spent on admin!
The digital transformation of real estate does hold a lot of promises of truly “intelligent” buildings, and important work is being done to get there.
But it must be a progression. Nowhere on the horizon is technology going to displace building operators. What technology can do today is give them 30% of their week back so they can focus on proactively operating assets instead of running from emergency to emergency.
The Digital Transformation in Practice
When a digital transformation is done right, it takes a current process and improves it.
Let’s take the equipment inventory process.
There’s no way around it. Someone is going to have to figure out what exists in all these new properties.
But how the information is collected, stored, and aggregated can be the difference between chaos and order.
For example, the same technician could use the Enertiv App while doing their walkthrough instead of a clipboard.
As each piece of equipment and appliance is surveyed, it flows directly into a digital inventory.
At the same time, they can slap an asset tag, allowing any future operator, technician, or third-party vendor to access this survey.
In the end, there’s a clean equipment inventory. More importantly, valuable information is brought out from the black hole of spreadsheets and easily aggregated across the portfolio.
The Bottom Line
So what?
It’s an important question and always one worth asking when considering new technology. Truth is that digitization and asset tagging provide both immediate and long-term value.
1. The Bus Problem
Everyone has heard about the old business adage of determining whether a process could continue if an important person were “hit by a bus,” (or simply retired, changed jobs or otherwise was unavailable).
In many cases, the workflows in commercial real estate would not survive this scrutiny.
That had been okay, but the entire commercial real estate industry is experiencing high turnover in on-site staff and third-party property managers. As such, getting new operators up-to-speed quickly is becoming increasingly important.
Creating a digital infrastructure today guards against the inevitable struggle to cover the bases when there is disruption in staffing
2. Bulk Orders
Too often, individual properties are ordering the equipment and appliances they need, basically at retail costs.
However, seen from the portfolio level, it would be clear that the company is buying hundreds of the same thing.
This is impossible to determine when all of the capital plans lives in siloed spreadsheets.
Asset tagging in software makes it possible to rollup purchasing needs across markets and even at the portfolio. This means that bulk orders can be made, significantly bringing down capital expenditures and increasing cash flow.
3. A Technological Foundation
We talked earlier about intelligent buildings. The combination of real-time sensor data and machine learning do indeed have the capacity to greatly improve how buildings are operated.
However, doing so at scale can remain elusive. The typical portfolio will have sufficient diversity in the ages, types, locations, management structures and investment strategies to make owners and operators risk averse when it comes to rolling out higher cost, higher reward technology.
Part of the problem is the same as the maintenance manager had in the beginning. Just figuring out what’s in each building, where it is, and how it’s connected has been sufficient to kill the momentum for sensor-based rollouts.
However, with asset tagging and a digital infrastructure, that problem largely goes away. Information can be shared with technology vendors quickly, and strategies can be formulated that are both inclusive and specific to each asset.
Once real-time data is integrated, workflows can be further automated and streamlined, helping further solve The Bus Problem. Likewise, capital plans can be infused with runtime hour and real-time energy data to both defer replacements when not necessary and to ensure alignment with long-term sustainable goals when they are.
Interested in learning more? Watch Enertiv Office Hours on The Power of Asset Tagging
Enertiv provides original research and insights on how technology is helping leading owners and operators maintain competitiveness in the changing commercial real estate industry.
The Enertiv Platform reduces OpEx and CapEx, consolidates back-of-house operations on one platform, and delivers transparency from the boardroom to the boiler room.
Get a tailored demo here