Russ Sandlin, who has more than 27 years of experience in multi-housing management and development, is the manager of residential development for MRI Real Estate Solution, a leading provider of property-management software. He recently spoke with Multi-Housing News' editor-in-chief, Bryant Rousseau.

MHN: MRI recently held a usability study on workflow with three large clients. What was some of the feedback you received, and what are some of the changes you may implement in your software as a result of what you heard?

Sandlin: Well, we have been working on workflow at MRI consistently in our new Internet product to make it more user friendly. The feedback generally in the industry has been that, historically, the providers of software have tried to put the industry into the technology. One of the things were attempting to do is to take the technology and put it into the industry by going out and looking at how [property managers] actually process [data] at the site and then creating usability that enhances the workflow and makes the software easier to use. There are a number of areas where that is real obvious: like the leasing process, for example, or rental payments.

MHN: Walk me through some of the specifics of how the workflow process is being improved.

Sandlin: If you look at the DOS and Windows products that are out there, there has consistently been a separate place that [users] go for prospects, for applicants and for residents. And every time a leasing associate had to go through the leasing process, they were required to go into those individual areas to manage the process. Our new workflow design has blended those processes together. It doesn't mean it has eliminated them because they're the standard processes in the system. But it has blended those processes together so the leasing associate doesn't have to think about going out to a different process; they're all one part of the workflow.

So from the time the prospect comes into the system from an Internet lead or a telephone call or walks on to the community through to the time that they sign a lease, that's all one process. And the system manages that process for them so that every time a prospect comes back--for example, if they want to bring their wife of husband back to look at the apartment a second time--when the leasing associate brings up their name it takes them back to the place they left off in the system. They're no longer required to remember who's where and in what part of the process; the system manages that for them.

One of the challenges we've had historically in residential is, the way that the legacy products have developed, you have perhaps as high as 80 percent of the residential management teams out there today still managing their properties on a paper system. A prospect comes to the door, and the property does a paper guest card, a paper application and then at some point during the day, the managers enter that information into the property management software. As we move forward in the technology, we're hoping to eliminate that dual entry so that they'll actually interact with the system with their workflow--and only enter the information once.

MHN: As workflow improves, what are the bottom-line benefits users will see?

Sandlin: Anything you can do to focus the leasing associate's energy on customer service and away from the technical side of the process allows them greater opportunity to do what they do best--which is generate more leases [which contributes] to higher bottom-line income.

MHN: MRI's property-management software is fully integrated with the yield management system, the Lease Rent Optimizer (LRO), developed by Manugistics Inc. and used by your largest client, Archstone-Smith. Is there still a fair amount of skepticism that a yield management system can deliver tangible benefits for the apartment industry? Or are people beginning to agree that, yes, this is a concept that can have a huge, positive impact on revenue? And if so, is it something that more and more property management companies are looking into?

Sandlin: There is a definite perception on Archstone's part that they are stronger in the marketplace because they have the LRO system and are utilizing it at their properties to price units and add concessions. It is improving their overall vacancies and availabilities. Archstone has made comments where they're looking to see three to four points on their bottom line based specifically on the yield management process. Those are enormous numbers in our industry.

So we're seeing the early adopters get into the process and, based on their economies of scale, they are seeing results. But yield management is a very complicated process, and we're still in the early stages [of the industry's adoption of the concept]. But the early adapters are seeing some results, and there's a lot of buzz in the marketplace, and a lot of people are really interested in how it works and how it will impact them. But we're still a ways off before we get to a critical mass where it can be proved that something like LRO is impacting the bottom line.

MHN: What are some of the other ways MRI helps its users improve the bottom line?

Sandlin: We've integrated an electronic funds transfer [capability] with our software, where users can take a check from a resident, run it through a scanner and create a batch file which is automatically posted to the bank. So they no longer have to post the check in the system manually and they don't have to take it to the bank. We've taken a 600-unit building that used to take 3 days to post down to several hours, reducing the time for the assistant manager or the bookkeeper to post all those checks. That type of workflow is certainly adding opportunity for the onsite staff to spend more time in the marketing arena and generating traffic and reducing the time they have to interact with the property management system.

Lease expiration inventory is another process which is allowing users to more effectively manage the expirations on their community. They set up a budget at the beginning of the year on what percentage of the total inventory they want to turnover in a given month by unit type. When a leasing associate goes to rent an apartment, if it exceeds that lease expiration inventory for that month, they're given a warning message and an opportunity to offer the prospective resident a different lease term. If they're looking for a 12-month lease, it will warn them to offer an 11- or a 13-month lease. This helps balance the inventory so [communities] are not seeing these large seasonal swings in vacancies.

MHN: Giving prospective tenants the ability to view availability online and actually reserve units over the Web is becoming a hot topic in the industry. Realty Data Trust's "VaultWare" system is one of the products that facilitates this, and I understand that MRI is considering making it compatible with its software. Talk to me about how important this technology will be to software companies, to owners and to prospective tenants.

Sandlin: One of the advantages of VaultWare is its current integration to [many of] the Internet Listing Services (ILS). And that's where the real opportunity in that product exists today. We have [our own] online leasing product that allows people to actually rent an apartment online. They can go online and go through the entire process, including: holding an apartment, filling out an application, having the credit check completed, paying for that with a credit card and then actually taking an apartment off the market. All that's left is for them to go to the community and simply sign the lease.

The most significant challenge with that process is the integration to ILS's. Currently, we have that integration at the site level where a company like Archstone or Village Green have web sites available for their properties, and a prospective resident can go on there and [through an integration with MRI technology] check real time availability and pricing. The challenge again is to get to the ILS's and create that relationship. And we're currently working on ways to accomplish that and VaultWare is one of options we're considering. We will most likely give our clients both choices so that by the beginning of next year, they can either go through the VaultWare system, if that's what they want to do, or we can integrate some form of online leasing if they want to do it internally and that would be through direct integration with the ILS's.

MHN: Over the next 12 to 18 months, what are some of the major feature-functionality changes we can expect to see, and how they will change the way property managers do business?

Sandlin: There will be a couple of areas where you're going to see some significant changes. One of them is the entire revenue management processes. You will see more forecasting tools, more proactive processes that allow both the regional property manager and the onsite manager to get out in front of the process. We have always been such a reactive industry, putting out fires [as they arise], but new tools are allowing the industry to become much more proactive.

You're going to see tools that will create much higher levels of communication between corporate, regional and site staffs. By the beginning of next year, we will have a forecasting module for the budget process that will allow interactivity at all levels of the organization to evaluate both income and expense budgets. [Users] currently have the tools to do the budget, but one of the things that has always been missing in our industry is the ability to communicate effectively in doing budget changes and forecasting.

One of the neat things we're working on for the future is the ability to reforecast a budget based on specific income lines. For example, if you forecast out that the vacancy numbers are going to increase, you can automatically do some forecasting related to expenses. You can say if we're going to have less turnover or more turnover, how is that going to impact expense lines, and users can automatically adjust themselves based on occupancy. So it's communication and the ability to do forecasting to stay out in front of the marketplace, to see where the market is going, that are going to be some of the big opportunities in the future.

On the leasing side of it, we foresee changes in how leasing associates are interacting with prospects. We're doing a lot of testing right now with tablet PCs, pocket PC devices and PDAs on how to gather information. We're running some tests on how to use different ID processes, either through ID cards or driver's licenses, [so leasing agents can] swipe them [through a reader] to gather information. Again the whole idea is to integrate the workflow so the onsite staff is spending less time on the technology and more time on the customer side.

MHN: MRI last summer was acquired by and became a subsidiary of Intuit. Does being owned by such a large company give you any competitive advantage?

Sandlin: Certainly. It's a very powerful edge, and we're beginning to learn more and more that Intuit brings to the table some very powerful influence. When you think of Intuit and their background, you think of customer support, of service, their capability in ease of use. They have brought some wonderful insight and influence to MRI, and the fact that they're a multi-billion dollar company doesn't hurt. It certainly tells the world that we have some financial stability. MRI had been around for over 30 years, and it wasn't going to go away before Intuit bought it, and it's certainly not going away now.