The question that everyone that manages Associations eventually asks is who has the best software for managing my properties and handling my accounting needs. The simple answer is that no one has a complete solution that would make everyone happy. There are many factors that create this situation and this article puts together many of these items to help the reader get more out of their quest of finding a solution for them.
First and foremost is how does one find a property management solution at all. The most common method of finding a software solution is by word of mouth followed by trade journals and organizations. One of the easiest ways these days is to look on the Internet by using one of the popular search engines or go to industry related sites and view what they have on-line. All of these have their good points by putting you in contact with software providers but all of these have a number of flaws that you should be aware of once you use one of these channels.
Word of mouth
Word of mouth usually results in finding out what someone you know in the industry is using. The problem with word of mouth is that most people know what they use, have adapted themselves to use the product and use the product despite its shortcomings. Basically, word of mouth gives you results that are flawed because you are hearing about a solution that someone else knows about but that’s the only solution they know about and have no knowledge about other solutions. The reliance of word of mouth is really only hearing about one, maybe two solutions that the person giving the advice knows about and thus is very limited about the world as a whole no matter how good their intentions may be. The best you may get out of a word of mouth recommendation is the flaws of a particular software solution.
In many cases, word of mouth comes in the form from another vendor such as your bank. Many banks have aligned themselves to particular vendors and push them because those software providers push the bank services. Be especially aware of vendors recommending vendors because there is usually an economic incentive to do so.
Trade journals
Trade journals usually have advertisements and sometimes listing of software providers. This usually gives you a listing in which you can go through, call the software providers and get information directly from the software companies. The problem with trade journals, although usually unbiased in their approach, is that they are displaying companies that are willing to pay to be in their journal and thus there is an economic incentive for that trade journal to get that company out to the public. I’ve seen situations where companies are so good that they don’t need to advertise so they don’t. Keep in mind that trade journals are only interested in what companies pay them to advertise and that on the surface it may appear unbiased, there is always doubt that any one trade journal is not completely unbiased. Ask yourself, if I gave you $50,000 in advertising dollars this year, what would be willing to do for me. I think the answer is obvious.
Trade organizations
Trade organizations are another source to contact vendors, and much like trade journals, they do provide contact to software providers. But again, similar to trade journals, the vendors you typically see are vendors that have paid to get in and be seen. Trade shows do allow you to make personal contact with vendors but this is typically a marketing view and not a working view, which we will discuss later.
Internet searches
On-line searches give you quick access to a number of property management software providers. In this age, any software provider worth any looksee should have a presence on-line. The problem with Internet searches is that some will come up in one search engine and not another. Furthermore, it may be that the best companies are buried so deep in the search results and it takes considerable time to research every item found. The problem can be summed up as infoglut. At the time this article is being written, I went to the most popular search engine, put in “property management software” and came up with 33 entries. I then went to the second most popular search engine and found 1118 entries. So you can see it varies a lot. Out of the entries listed, only a small percentage in both searches dealt with Association management; i.e. most were real estate related. If I put in “accounting software”, things get really scary.
Web pages are marketing brochures on-line. What you see portrayed is a very positive view from a very biased source. Cut through the hype and see if there is any indication that the company you are viewing on-line has the things you need to make your task of managing and accounting easier.
How does one find a property management software solution? Use all of the methods above keeping in mind the flaws of each one and the fact that you must be dedicated to several hours of research to come up with software companies that you might think will help you in your quest.
I have a list of companies I want to consider, now what?
Now you have several companies in mind and I emphasize several companies. Please have a minimum of two companies to look at and the more the merrier. Why more than one? Because the more you talk about your particular situation with many different people, the more insight you get into how the solutions vary and possibly the fact that there may be more than one solution to your problems.
The most appropriate thing to do is to contact each company and request information and a demo of their software. Either before contacting the companies (maybe before selecting the companies!) or while you are waiting on the information and/or demo to materialize, list the items you want to know the most. These items should include the basic functions that you would expect to the extreme problems you are faced with. I’ve done many demos of property management software and I am always amazed at what people overlook in demos. They typically want to see the “wow” factors and as a person trying to get their account, that’s exactly what I want them to see and I’ll do my best to steer them into it. Focus on the mundane as well as the “Wows” in the vendors software. The financial statements may be the coolest thing you’ve ever seen but posting a Journal Entry may be hell. Make sure your day to day activity is covered in your viewing.
You should always try to narrow your decision to at least two vendors that you feel will solve your problems and typically no more than four. By this time, to be succinct in your decision process, you should develop a simple decision matrix with weighted values for each item. The weights can be as simple as 1, 2, 3 where 1=Vendor cannot perform this function, 2=Vendor has a solution but not a clean solution or one still under development, and 3=Vendor can do this function satisfactory. However, if you really want to get deep into a decision matrix, you should decide by high level functionality (i.e. Property Management, GL, AR, AP, etc) which items are more important than others and put higher weights on them; i.e. Financial statements may be weighted 1 thru 20 whereas Recurring Journal Entries may be 1 thru 3. A decision matrix is a simple tool to weigh the vendors in an unbiased fashion. Once you have weighted all of the items by vendor, you simply add up the numbers and the vendors with the largest numbers are the ones you want to view and consider. The matrix process should narrow you down to two vendors. If the weights are within ten percent of each other, they should be kept open to consideration.
Now you have a couple of vendors and they are pretty close to one another in comparison, what next?
The next step in selecting a vendor is to look at the technology. I assume you want a solution that will last well into the future, if so, then select a company that is aggressive in pursuing future technologies. What is the future? By far the future is the Internet. I may sound biased here but anyone that has not been dead in the last year can see that everything is going to be on-line (intranet/internet) business solutions. Keep in mind that your software not only must meet your needs but the needs of your homeowners, the board members, the association vendors and suppliers. The internet is the only solution that can solve all of these problems for everyone involved because no matter what type of computer they use, the internet provides a medium for everyone to access the same information. Most of the popular software solutions are all struggling to provide a Microsoft Windows® solution which is fine but Windows is becoming a proprietary product that locks you into one type of hardware solution and one operating system solution. As time goes on, this will become much more self-evident, and as history has shown, proprietary solutions create greater expense and early obsolescence. It’s my opinion that unless a current software solutions provider can show some type of Internet interoperability, they are doomed and you should stay away from them.
I found vendors with good future strategies, now what?
The next step in finding a good vendor is their contract issues and how they are willing to bend on issues that you are not comfortable with. Ask for copies of the contracts they want you to sign. Are these contracts even handed or one sided? If the contract is all pro-vendor (which most are) then ask them to change the contract to be more even handed. Keep in mind that contracts are made to be equal and to protect all parties. Never sign a contract that gives you no outs if the vendor fails to perform what they promised and never hesitate to ask for their promises to be a part of a contract. I once had a multimillion dollar vendor decision to make for one of the top 25 companies in the USA. I choose a less known vendor over a very well known vendor because the well known vendor said, “here’s our contract, sign it and we will not make any changes whatsoever”. The lessor known company was willing to make changes and stand behind their product. The contract the well known company wanted me to sign was all pro them and left me no outs if their promises were no good. In hindsight I made the right decision.
Along with contracts is service and typically a service contract is provided with a software license agreement. Service is very important so be sure you are getting what you need. Even if you get a minimal service contract for support, make sure you have a clause in your contract that says the vendor will be at your beckon call for 30 to 60 days after installation and if possible, after conversion.
Another very important item that is usually a contractual consideration is education. You want to be sure you will get education on how to use the new software. Sometimes this is in the form of person to person training on-site and sometimes it can be self study. No matter what the education is, make sure you raise this up as an issue. It is better to have a span of time for education (i.e. so many hours) than to be dependent on the vendor to tell you what you will need. They should and will guide you (some software is easier to use than others) but be sure you get a chunk of hours that they will give you in case you need them. If you never use them, then that’s fine, you didn’t need them.
The contracts look good, now what?
The final step in making a decision is the price. Remember, confidence is the number one reason why a person makes a decision on what products to choose no matter if the price is more than the competitor. Unless the price is way out of line, then don’t let a lesser price make your decision. Remember, you get what you pay for. Try to see why there is a difference in price and like with contracts, never hesitate to ask for a better price. If you use the competition to push the price down, remember that sometimes a vendor will match a price even if they know they can’t provide the proper service for that price. A good vendor would walk away from a sale if they couldn’t meet the price and you know that you have them at their rock bottom price and don’t be afraid to invite them back in at their lowest price.
If you go through all the steps above, you should have a very good and comfortable understanding as to what you are buying. Buying into software is a real commitment. It is very rare if it ever happens that once you have chosen the company you want that you will dump them and go elsewhere. Most, if not all, people stick it out for at least 5 years once they have made the investment to purchase new software. Don’t make it a miserable 5 years.
Now, let me give you the inside scoop. Listed are inside information and dirty tricks that vendors will do to get your business and this should enlighten you as to what you should do to be sure you aren’t being sucked into a wrong decision:
There are so many differences in software from very fragmented solutions to very proprietary cohesive solutions. I have personally seen the internal workings (Source Code) of three very popular solutions and although they all purport to perform the same functions, they do it in dramatically different ways and all are behind the current technology trends.
It’s a very difficult choice to find a software solution these days since no one company seems to have all the answers, and no one does a clean job of support. I know; I’ve dished out the exaggerations many times just to get an account and then found it difficult to live up to the expectations. A vendor usually tries to find out what the customer’s real needs are and cater to those items and hope that everyone will forget the sales pitch.
It’s the “used car salesman” act and unfortunately, everyone does it. So don’t hesitate to really grill the software companies that you want to review and never hesitate to have them show you what they are saying is true and better yet, let you use the product before buying.
Checking out their references is usually a futile attempt since no company is going to give you a reference list that contains customers that will talk bad about them but check them out anyway and really grill their customers. I can tell you that I used to have perspective clients ask us if all of the customers on our reference list were related to us since they gave us such stellar reviews.
Get into great detail on how the conversion from your current system to the new software will take place. This is always a painful task, even with the best of conditions, but this is also a subject that most companies want to avoid. They will tell you that it’s all easy but see what their experience is in the conversion processing and have them give details. Ask to talk (privately) to the programmer that will perform the conversion and grill them. I’ve converted data from many of the companies and there are some real tricks that only experience can provide.
I hate to say this, but make your perspective software company’s lives a living hell and you’ll find out who is the real workers/supporters and who is all talk and sales. The companies that will answer or provide information without hesitation typically will be vendors of worth.
Watch the time it takes for your questions to be answered. Keep a few critical questions for after the demo, call and ask them at different times/days and then see how long it takes to get answers. People with good support structures will respond quickly, people in chaos will take their time.
See if you get answers from different people and beware of situations where the same person answers the questions all the time – this is indicative of a one person show that provides all of the support and this means that you will be dependent on that one person in the future. Ask how many people are on staff and never believe the number you hear, AND then ask the forbidden question: Name them, their job functions, whether they are full time, part time or contract employees, and after you get the list, ask if you can talk to each one individually. No one ever does this and this is the one thing that can tell you more about an organization than any other question. None of the players in the market today have any more than a half dozen people or so on staff. Digging into their internal workings will give a clue to their true characters.
Truly good luck and happy hunting. This is a hard road and should be viewed as such. Those that are looking for a quick, easy fix will get taken to the cleaners and shouldn’t be surprised about it. This is not to say that if you follow all of my advice you won’t blunder, but at least it should give you a relative insight into what you are getting yourself into.
