Operational Challenges Giving Multifamily Executives Sleepless Nights – This One-stop Solution Holds the Key

Ever since the world took its first steps towards normalcy post the pandemic, Multifamily has remained the most preferred commercial real estate sector amongst investors. The industry has recently come out of a quarter (Q1 2022) that saw 8% higher demand than the previous high and 76% higher than the pre-COVID-era peak registered in 2000. Reeling under the pressure of building 4.3 million new apartments by 2035, it is safe to say that the Multifamily sector is red hot right now.

Despite the apartment demand being off the roof, there are challenges aplenty that are giving owners and property managers sleepless nights. According to AppFolio’s 2022 Property Management Industry Pulse report, issues like operational efficiency, talent shortage, technology & innovation and revenue generation continue to plague the industry. Interestingly, many forward-thinking leaders are now looking at Shared Services and Global Business Centers (GBS) as a one-stop solution to weather the storm.

Let us delve deeper to understand the most common pain points in Multifamily right now and how SSC/GBS can help navigate these challenges:

1. CENTRALIZATION OF BACK-OFFICE OPERATIONS

Mergers & acquisitions are a part & parcel of the commercial real estate sector. While these deals bring about exponential growth for any business, they can also spell disaster for back-office teams carrying out key functions like accounting. When faced with a sudden spike in transactional volume, onshore teams might struggle with implementing standard processes across the board and maintaining processing efficiency & accuracy.

Setting up a dedicated SSC or GBS prepares your organization for such events. Rapidly expanding apartment owners often leverage these models to add scalability to their business, allowing them to seamlessly integrate newly acquired brands. Owing to their scalable nature, these offshore teams are capable of continually following industry best practices to deliver highly consistent and standardized services that meet all efficiency & accuracy-related expectations – regardless of how fast your business grows.

2. TALENT SHORTAGE

While many might argue that the Great Resignation is almost over, if not completely, the ground realities of the commercial real estate sector are quite the opposite. “With the limited talent pool, hiring skilled accountants has always been a challenge for us. But the last year or so has been particularly difficult – and it continues to be so. Attrition rates are at an all-time high. People are demanding higher compensation and the expectations from their workplace have changed completely. We continue to have a hard time in finding & retaining talent.”, said a senior finance executive from a leading USA student housing company.

Partnering with a third-party specialist is quite easily the simplest solution to addressing the talent shortage, both from a short as well as long-term perspective. These GBS organizations tend to have access to a global pool of skilled resources that can ensure staffing continuity even in times of market uncertainties.

3. COST OPTIMIZATION

In the traditional sense, cost saving was often the primary driver for businesses to outsource their back-office functions to third-party vendors. Over the years, business owners have come to realize several other benefits of moving to an SSC or GBS model, but cost optimization still remains a very important one – especially in the current economic environment.

A cost-effective model like GBS can play a vital role in tackling the effects of rising inflation, which in turn leads to increased material & labor costs. Through such solutions, organizations are able to deploy best practices and automation tools to bring down operating costs, thus, improving the Net Operating Income (NOI).

4. TECHNOLOGY & INNOVATIONS

Despite the fact that there have been constant discussions around automation & technology in the industry for over a decade now, Multifamily owners & operators somehow still tend to have their share of apprehensions. In fact, the recently conducted Intelligent Automation 2022 Benchmarking Survey by SSON brings forth some scary findings.

“Yes, there are challenges. I mean by now we are all well aware of the improvements these tools can bring about – so its more of a mindset thing, I guess. There’s a lot of apprehensions internally around the solutions themselves and then there’s the whole security angle too, which just cannot be ignored.”, a senior executive of a leading Affordable Housing company was quoted as saying.

Experienced, trustworthy GBS organizations are helping businesses sail through the digital transformation journey – helping identify & implement the right tools that suit their specific needs. Compared to technological initiatives undertaken by onshore teams, the ones carried out by third-party partners are more likely to succeed as GBS teams tend to leverage their experience to streamline implementation & transitions.

5. INFORMED DECISION-MAKING

Forward-thinking businesses have always aimed to utilize the power of data to drive business growth. However, the burden of day-to-day operations and focus on immediate growth can often put these initiatives on the back burner. The current business environment, on the other hand, does not allow that. As businesses face cut-throat competition, each function is expected to act beyond their duties and contribute to the overall growth.

As a result, executives, especially in finance teams, are increasingly looking at their GBS partners to generate accurate data that can be utilized to further optimize performance. These organizations are capable of bringing together the right mix of qualified data scientists and latest reporting tools to generate smart reports that can aid overall decision-making.

QX Global Group: Enabling GBS Transformation for Commercial Real Estate and Property Management Businesses

QX Global Group is a global Business Process Management (BPM), Technology and Consulting company. Ever since our inception in 2003, we have set up future-ready Shared Services and GBS centers for commercial real estate businesses across sectors like Multifamily, Student Housing, Affordable Housing, Senior Living and Property Management, amongst others.

We have a unique People-Process-Platform approach that enables us to optimize key finance functions for our clients, like accounts payable, accounts receivables and management reporting amongst others.

Our solutions are highly scalable & flexible in nature, which allows our partners to overcome their pressing challenges like building efficient back-office teams, controlling operational costs and implementing automation tools.

Our teams work to deliver end-to-end solutions that cover transformative consulting, digital services, and business process outsourcing, customized to meet each client’s specific needs. Get in touch to accelerate your finance transformation journey today!

Originally published Aug 30, 2022 05:08:36, updated Aug 30 2022

Topics: GBS, Multifamily, Outsourcing, Outsourcing Services, SSC