Jim Young leads Realcomm, a team I’ve been involved with for a number of years now. He authored a recent advisory on the opportunity in build an integrated business platform. I started off yesterday when Jim asked me what I thought of the column and I started a reply, then thought I really should tell everyone. So here’s the note I was going to send to Jim:
I think you have described the issue of where we are now very well. I have always talked about the BMS guy and the FM guy and the PM guy getting together and using the same customer and asset data. The value gained and the losses avoided by doing this are, in my opinion, worth more than gold.
The issue really is that you and I paint a picture that says the grass is greener on the other side. Some people get it and some people don’t. For anyone to change we need three things – (1) knowledge of a better alternative, (2) understanding that the cost of change is less than the cost of the current solution and (3) actionable first steps to go get it done.
For those that get it and agree it’s greener on the other side there is still two other issues to resolve – what will it cost to change – no one can give you a simple answer to this; And the other issue is what should I do first? Again, when plugging just two systems together is not the answer and could make things worse not better the actionable first steps issue is a big one.
The pain of change to get to the greener grass does have its issues but is achievable. One of the main barriers to change has been traditional integration models. Point to Point integration of major systems using traditional messaging tools is brittle, carries huge error handling overhead and costly to maintain. The only companies that typically have a large number of integrations between systems are banks and telco’s. This is where the big consulting houses and big software vendors have always made there money. Implementing an OSS and a BSS with integration to accounting and a myriad of other systems for a telco is usually a 50-100 million dollar program. There is no property company on earth that can afford that type of IT spend. At Nakheel with only seven systems to knit together we were looking at USD20m. Additionally, this type of solution is brittle, and by that I mean it all breaks when part of it fails or part of it needs to be upgraded. A dynamic solution is more resilient and easier to manage.
With the advent of Service Oriented Architecture and virtualization (the Cloud) it’s possible to devise an integration strategy and solution that minimizes cost, complexity and is more resilient. There are several vendors with solutions in this space that can be applied as the middleware you need. The key is to have a domain data map that shows what data is where and which copy is the single source of truth that all other copies of the data replicate from. To design this requires deep domain expertise as well as strong application architecture skills.
The other pain of change is not a technology issue but a business issue. Many managers in a non integrated business will lose their power base and possibly their jobs if an integrated business model is adopted.
Actionable first steps is the other key to change. What should I do first? Unfortunately, I don’t think there is a universal answer to this. Every business is unique and has its own first steps but I think there are some guiding principles to what to do – (1) look for a quick win that is not complicated; (2) What is the burning platform now? Is it s new lease system, new building being commissioned, change of service contract? Any and all of these types of changes can be the catalyst to start a new way of doing things. Ideally, a company should find a trusted advisor who can help you define a roadmap to success. (3) find a champion and get a leader to support you.
Finally, there is never a good time or a bad time to do this – just get on and do it. Don’t let detractors and risk analysts tell you to wait. That just costs money.
Unless there is someone inside a property business who is prepared to lead and champion change this won’t happen. Ultimately some companies will gain competitive advantage by having an integrated business and their lower cost base will drive their competitors to imitate their success.
Eventually, customers will ask why they haven’t done it.
