It's Economics - The Nation is Producing More with Less

The U.S. Bureau of Labor Statistics recently reported that our economy’s productivity level increased at an annual rate of 9.5% during the third quarter of 2009. Surprisingly, this increase was the largest gain since 2003. Further, productivity has actually increased consistently throughout this recession. At the same time, the number of hours worked decreased by 7.5% and labor costs shrunk by 6.1%! How is this possible!!! Harvard University Professor Dale Jorgenson declared this economy as a "Productivity Paradox" because the "economy is in a downturn and at the same time it's becoming more competitive."

The Economist indicated that recent employment reduction may be more permanent than in previous recessions. Organizations appear to be approaching this economy radically difference than historical evidence demonstrates. The primary reason for this trend is that companies have strategically integrated technology into their businesses. Employees are able to complete all necessary work with fewer helping hands. Although history has demonstrated an increase in workforces at the tail of economic downturns, this recession will be unprecedentedly unique. Rather than rehiring staff, executives are pausing to determine their new levels of capacity that have been enabled by leveraging technology.

Unfortunately, the affordable housing industry has been reluctant to adopt technology. Many industry participants consider themselves technically savvy because their employees have acquired personal computers with email, word processors, and spreadsheets. However, these tools simply increase the speed of existing processes. If the company’s operation is not effective, the business has simply accelerated the occurrence of problems –with increased risk.

Those who are leading the industry have done so by leveraging simple, low-cost, but extremely effective tools. That is because leaders intuitively recognize the plummeting cost of technology can deliver an extremely favorable return. Simply for demonstration, the Starta Enterprise offers a effective solution for affordable housing developers or syndicators for as little as $40 monthly. While the cost to development Starta’s technology demanded 8 years and exceeded $7 million, businesses can quickly draw benefits that enable increased production, greater revenues and sound compliance. Starta has proven it value by managing more than 7,000 developments and 13,000 funds (loans, grants, NMTCs and LIHTC funds). Starta’s clients have quickly benefited from the intuitive service that directs the flow of documentation, tracks pipeline development, alerts key staff of approaching issues and provides in-depth analysis of deals. Starta deliver! s more value than several employees at a fraction of the cost. When one considers an employee’s cost at $3,000 to $8,000 per month, the value to cost ratio of technology is astounding.

Some believe that some business owners remain reluctant for the fear of having to add technical staff or purchase computer systems. However, this concern remains unwarranted with the rapid increase of Software as a Service solutions (also known as SaaS solutions). Just as a company does not need to manage a nuclear plant to acquire electricity, SaaS technologies deliver easy-to-use services via the Internet. The similarity of the nuclear plant analogy continues by eliminating capital costs. Therefore, SaaS is often referred as a “Utility Service”. A company can quickly engage a SaaS solution and employees simply access the service just as easily as a staff member can plug-in a lamp.

If the economy continues to challenge your business, consider offloading the pressure to a resource that may demand hundreds –rather than thousands per month –a resource that remains available 24 hours a day/7 days a week and available anywhere. SaaS solutions are easy to acquire and quick to learn. Best of all diminishing prices for technology have positioned business to receive extremely attractive pricing. Consider taking advantage of technology to enable your business to thrive in the current and increasing demanding economy.

The Art of Asset Management

Ask ten limited partners to describe the most important issue facing Asset Managers and you'll likely hear eleven different answers. On the surface, the reason for this is obvious: the affordable housing industry is incredibly niche and varied, with unique demands for every company's portfolio of properties. However, there is a second reason for this phenomenon: human nature compels us avoid the reoccurrence of bad experiences. For example, if an owner has experienced devastating losses from a flood, that individual is highly likely to guarantee that all properties maintain proper flood insurance. Another manager may emphasize compliance because of past penalties, while a third may focus on the accurate distribution of tax credit gains/losses due to pressure from investors. All of these foci are important, but the best approach to asset management will balance forward-looking risk management with an investment strategy, rather than simply react! ing to past events.

Although the specific issues surrounding asset management can vary widely, the fundamental intent remains consistent. Owners seek management approaches that lessen the risk of financial loss while helping properties to increase in value. Although this article does not intend to expose every possible indicator, our team has experienced a theme of reoccurring needs to which owners assign importance -- all of which can be classified as risk management or investment strategy.

From a risk management perspective, maintaining proper compliance leads as the primary issue of concern -- and rightfully so. Compliance has a high level of risk because the process for many properties remains extremely error-prone. Owners rely on the diligence of property managers to gather all the necessary records. Yet with increasing turnover rates in staff and management companies, combined with a variety of other excuses, many property managers would be challenged to locate a specific document for a specific tenant that was collected twelve years ago. While fingers of blame are pointing in various directions, the bottom line result for the owner may include severe penalties. At Starta, we responded to this concern by providing a customizable cabinet of documents for every tenant. Documents are available indefinitely when digitalized, and this sort of centralized approach easily allows for regional managers to review documentation as it co! mes in -- fewer nasty surprises during site visits or audits, that way. Plus, owners can be alerted when any information is misfiled or unavailable.

Another driving concern for owners remains the proper insurance of all sites: enforcement of adequate coverage, claim tracking, and timely renewal of policies. While these tasks are not complex, property staff members are often inundated with daily emergencies that distract from lower-interval routine processes such as these. In addition, without some form of reporting the owners often are unable to quickly review information to ensure that proper insurance is in force. As a result, many owners rely solely on the site manager for critical functions of asset management, just doing check-ins a few times per year. To ease our client’s concerns, Starta offers a variety of services to monitor the enforcement and tracking of insurance policies and claims -- and, as with all information in Starta, authorized people can review the information at any time and from any location.

Many owners recognize the value of a proactive investment strategy. The review of financial budgets with resulting variances a key concern for syndicators and other partners. Asset managers also maintain a healthy respect for proper tax credit distributions. As a result, Starta discovered that the best service incorporates existing financial models. The system can be customized to transparently extract dozens, hundreds or even thousands of data points from Excel spreadsheets when existing pro-formas are placed in the system. With the ability to review financials across time, compared with budgets, and even across sites, all parties with a vested interest gain insights regarding the state of a project as well as the entire portfolio.

Property owners should not rely on a single individual to complete any task where that task alone could potentially destroy a business. People come and go, and, unfortunately, the organization cannot always rely on the actions of any one person. The best solution is to enforce a series of processes for data collection, centralization, and retention. A simple spreadsheet or even a notebook may provide sufficient insights for a few properties, but most property owners must eventually engage an enterprise-level software solution that can adapt to the quirks of their portfolio. Inflexible, canned solutions almost never suffice. The system must combine documents with data to deliver a holistic view of each property. And the technology must present real-time, accurate insights and alerts to key individuals to aid in the production of increasingly valued assets. It may seem obvious, but it bears noting: Asset management is vital for long-term financial success. Leaving it solely to overworked, front-line individuals at the site level is a recipe for the occasional meltdown.

Easing Efforts of Servicing Tax Credit Properties

A few years ago, the challenge for the industry was enabling developers to produce an ample supply of communities to meet the demand for tax credit allocations. Syndicators enjoyed the effortless trade of tax credits at rates nearing a dollar -- and occasionally, even more than a dollar. Those days have passed. The uncertain economy continues to reduce the value of tax credits. Concerns over compliance are emerging from institutions that purchased tax credits or dedicated dollars for grants. We have witnessed a radical shift in the industry from driving development production to a focus on compliance with existing properties.

Unfortunately for many, understanding the necessary set-asides for an entire portfolio of properties remains less than obvious. This challenge is compounded when funds are received from multiple sources, since usually those sources each come with their own list of requirements. Projects may receive LIHTC funds, historic tax credit funds, and several grants or loans from various organizations. The result is a unique conglomeration of obligations for each property. Multiplying the compliance demands by dozens or hundreds of properties creates the need for a methodical means to track all obligations.

Owners with a few properties may be able to use a simple spreadsheet to track compliance requirements. However given time, the accumulation a number of units will eventually exceed the capacity for tracking with a simple tool. But, what software is most appropriate for this effort?

By nature, this industry demands flexibility. Starta once tried to develop and deliver “cookie-cutter” solutions, but we quickly discovered that every organization is extremely unique – just as most every project is unique. Granted, there are several fundamentals such as the concept of set-asides and period of compliance. Unfortunately, specifics can radically change, the number of units can differ, the compliance period can vary, and much more. A system needs to provide structured flexibility.

Starta addresses this through an extremely flexible, web-base solution. The system has thousands of data fields available, however, you can select the (for example) thirty-seven fields that are important for your business. You can automatically generate compliance reports every week, month, quarter or year with real-time set-asides, vacancy rates, and rental income received. But, regardless of whether you are a Starta client or not, the important requirement is that your chosen system needs to allow your organization to wrap the solution around the business -- not the business around the technology.

A good compliance system will be flexible enough to handle all of your current compliance needs, as well extensible enough to meet any future needs that arise -- many times, the future needs arrive more quickly than you might expect. Whatever system you choose, just make sure that it is inexpensive to extend if you later find that you need to. This should be a conversation you have with any compliance vendor. The needs of your company are growing and changing with this brave new economy, and you want to make sure that your software systems will be prepared to grow and change with you without breaking the bank.

Starta Development Releases a Compliance Services Tool for Syndicators

Starta Development announced a low-cost solution that enables syndicators to avoid costly penalties that can result from non-compliance with IRS regulations. The service supports a variety of funding, including Low-Income Housing Tax Credit (LIHTC), New Markets Tax Credits (NMTC), HOME Funds, Sections 202 and 811. And, the web-based solution captures not only initial funding documentation, but also incorporates all tenant documents. Further, Starta maintains all information indefinitely.

Syndicators face a significant risk of massive penalties that could result from lost, unfiled, or improper tenant documentation. Starta extends an easy-to-use service to gather and organize necessary compliance details in a central location. Having a web-base solution enables access from anywhere with offsite backups that provide business continuity in the event of a disaster. “There are numerous properties in Louisiana that lost everything. Disaster remains an event that we assume will happen to someone else. With the Starta system, LPs can put aside the worry of losing documentation due to natural disasters," stated Gordon Blackwell, founder of Starta Development.

“The recent focus on major financial institutions has generated a significant amount of concern in the industry regarding compliance of existing portfolio assets,” explains Blackwell. Blackwell further relays that “this is a valuable service that Starta enabled years ago. However with the emerging unease, we have packaged a valuable solution at a very attractive price.”

... Click Here for more details.

Newsletter - March 2009 / The Value of Pipeline Tracking

Pipeline tracking consistently emerges as one of the most valuable activities for housing developers, syndicators and other organizations that manage funds such as loans, grants, LIHTC or NMTC allocations.

Read the entire article at... The Value of Pipeline Tracking

The Importance of Software Architecture

Many developers begin developing by unknowingly using the concept of Separation of Concerns (SoC).  They dedicate their time to develop software by designing and developing features (concepts) with as little overlap of functionality as possible. This approach is how I once programmed when I was a developer.  It provides instant gratification.  Unfortunately, this methodology succeeds for only very trivial applications.  The approach is completely inappropriate for large-scale or enterprise-level solutions.

 

The Purpose of Software

The purpose of a software application is driven enviably by the developing organization.  The goals are generally driven with commercial requirements and the ultimate solution must deliver an acceptable ROI.  In most cases, the system’s future return must be promoted to gain buy-in before any investment is allocated.  And in many situations, the architectural design must be leveraged to demonstrate the value and viability of the future system. 

 

The Value of Architecture

I parallel the need for software architecture with the construction of a physical structure –specifically…  I like to relate every system I design as a Tree House, a Home, or a Skyscraper.

 The Tree House Architecture…  As a father of 2 children, I enjoyed the assembly of a multi-level, tree house.  I simply fastened boards repeatedly using a level as needed to ensure horizontal floors and vertical walls.  The effort never required pencil, paper, or really much thought.  Similarly, I have developed applications with the same approach –no advance design, just coding.  Unfortunately, the demand for some of these applications exceeded my expectations and brewed into the inevitable catastrophe.

 The Home…  While it might be possible to create a home with no plans or design, every family appreciates the architecture of a well designed house.  The general contractor must properly lay a stable foundation while considering all components of the house like plumbing, electrical, rooms and walls.  The GC must also allow some flexibility for the homeowner to acclimate their living conditions within the structure.  For example, while the home’s design must predetermine the location of the kitchen, the homeowner has the opportunity to select the appliances and the exact location of the kitchen table.  When designing the kitchen, the architect must enforce enough structure to enable reliable functionality (the proper operation of the oven and dishwasher) while offering the future owner to determine where they want to place the silverware.

 The Skyscraper…  An enormous building relates directly to the enterprise application, demanding considerable design prior to digging the first shovel of dirt.  An architect must respect abstract concepts like the mission and vision; consider al needs, desires, and demands from all relevant stakeholders; encompass all functional requirements; and design to achieve all quality attributes, like scalability, responsiveness, real-time availability, maintainability and/or reliability (often referred to as the ‘-ilities’).  Understanding and achieving the appropriate architecture demands a substantial effort, a focused team, and dedication from all stakeholders.

 

Listening Is Key

The architect must begin by considering a diverse pool of concerns from all stakeholders (users, developers, management, investors, customers, etc).  It is during this initial gathering of information that often forms fundamental flaws in a system.  By neglecting the insights from a key individual, the architect may fail to incorporate a core attribute for the end solution.  Although many circumstances may contribute to design flaws, I believe that the primary issue that surrounds the inability to actively listen to others.  People naturally want to explain their thoughts to support their intentions.  But, this is not the activity for the architect at this phase.  A related problem is the inability for the architect to communicate his or her intentions. –But, we’ll save that issue for a later discussion.

 

What is Software Architecture

At its core, software architecture is a compiled distillation of needs and expectations from all stakeholders.  From its definition, we can recognize that the architecture of a software application will never be flawless.  This is because software always evolves.  While software continues to be used, it is never complete.  Why is software never complete???  Because stakeholders (anyone who is affected by the software) will change their minds, some stakeholders will depart while others will join (Yikes… even after the system is released).  So how do we shoot a moving target?

 

Shooting a Moving Target

There are 3 tools that I use to enable sound system architecture: Pillars, Design Patterns, and Modeling Criteria.  At the most abstract level, an architect should incorporate a set of Pillars throughout the entire system’s design.  A pillar (by my definition) is a central, foundational, abstracted concept that supports the operation and reinforces the mission of the system.  Because each pillar sustains crucial functional support, a pillar can never be removed.  For example, during the discovery of stakeholder’s needs, the system architect may uncover that the solution must allow for a customizable, role-based security model and all actions must be logged and comply with FDA regulations.  The concepts would be 2 pillars of the new system.  Pillars should be documented in concise, understandable terms and leveraged as a litmus test against every designed task.

The concept of a design pattern involves a common reusable resolution to a commonly occurring problem. The concept and use of design patterns has gained popularity and for good reason.  Design patterns speeds development, increases quality, and lessens maintenance efforts by improving readability for programmers who are familiar with the repeated pattern.  Because this concept is well documented, I will not dig into the details relating to the various patterns.

 The final concept that must be incorporated to deliver a robust, scalable and reliable solution involves modeling criteria which must be pre-determined, documented and applied consistently within all designs and code at its lowest level.  Modeling criteria supports the key aspects surrounding quality assurance which facilitates “Fit for Purpose” and “Right First Time.”  Examples of modeling criteria that I often apply include:

Atomic Components (tasks must completely succeed or completely fail)

Loose Coupling (changing one component does not affect the other component)

Open/Closed Principle (components may be opened for extension, but closed for modification)

Dependency Inversion (high-level components should not depend on low-level components)

 

Conclusion

Software will constantly evolve throughout its entire life.  Do not attempt to stop the evolution. Rather record key principles surrounding the project to architect the best solution.  As a final remark, I relate software architecture with the design of an airplane.  The wings of a plane maintain sufficient structure to lift the craft into the air.  At the same time, the wings are designed to flex 22 degrees up and 18 degrees down to prevent a total failure during turbulent conditions, protecting not only the craft, but also all stakeholders. Architects must understand and address all discoverable needs while incorporating a fine balance between structure (for functionality) and flexibility (for customization & user acceptance).  By applying Pillars, Design Patterns, and Modeling Criteria, an architect can achieve a proper design to deliver a scalable, maintainable, and reliable system.

The Power of Strategic Operations

Developing a strategic operation plan is essential to ensure a valued delivery of any product or service.  If you believe that valued quality can occur without purposeful intent, then you may also believe that a dictionary can be created by randomly generating characters.  

An organization must develop a broad set of policies and procedures firm to produce the maximum value from all resources of a firm.  The policies and procedures must also align with the business’ long-term mission.  

Policies extend corporate decisions to staff members that do not possess the authority to make corporate decisions.  With policies integrated in its operations, a company can speed and improve responses for internal and external customers by preemptively extending decisions to lower-level employees.  With a parallel purpose, Procedures document optimal methods that produce a specific result.  While Policies and Procedures differ slightly, both predetermine effective actions to produce the greatest amount of value.

The challenge, especially for young, rapidly-evolving start-ups, is the constant change of internal and environmental factors.  However, change does not excuse the need for structure.  Change actually supports the need for structure.  While policies and procedures are documented, both should continuously adapt to organizational change, customer demands, and learned knowledge.  I refer to this concept as “Agile-Structure”.  Another common term is “Best Practices”.

Regardless of the term, operations must not allow their policies and procedures to become unyielding routines, dictated by inaccessible executives.  Instead this structure should become a technique to produce value more effectively than simply performing in an ad-hoc manner.  Organizations must be adaptive, listening actively to their employees, investors, clients, vendors, and the community.  With well tuned and applied policies and procedures, a company can increase the value and quality of its products and services.

Gordon Blackwell

Technology & Entrepreneurial Evangelist

Raleigh, NC

"Some see things and ask Why...  

I dream and ask Why Not..."

Author Unknown

Press Release -Starta Development Accelerates to Manage More than 7,000 Housing Developments

Raleigh, North Carolina, November 17, 2008: Starta Development today announced that it now manages more than 7,000 properties across the nation. Developers of multifamily housing are increasingly engaging web-based services to offload the tedious efforts of managing documents and compiling reports. The Internet is an ideal tool when attempting to coordinate more than 30 third-parties during a 2-3 year period. Housing developers are discovering the value of compiling and coordinating the efforts using a central tool that everyone can access at any time during the day.

A major component of Starta’s success is its ability to seamlessly adapt to the demands of each unique developer. Users of the tool create a document cabinet for each project. Documents can be uploaded, emailed or even faxed. Once online, every document is accessible from anywhere in the world. The cabinets can be easily customized with any number of folders within folders. “The online cabinet actually mimics the business’ actual physical cabinet. However, now documents can never be lost and different people can view the same document at the same time,” explains Gordon Blackwell, Starta’s founder.

“It’s not only developers who are leveraging this type of service,” Blackwell continues. “LIHTC Syndicators and other funding providers use Starta to manage tax credit allocations, loans, and grants. We provide the most robust tool that addresses the specific needs of the affordable housing industry.”

Another reason for the rapid adoption of Starta has been its ability to provide a core tool to support basic needs like document, contact, and information management with a very low cost. At the same time, Starta can be quickly extended to serve unique business needs. “It’s all about delivering value. If Starta cannot add value to a business by enabling the organization to generate at least one more project a year, we will just walk away. However, technology can quickly reduce unnecessary efforts in the complex world of housing development. Enabling a developer to produce just 1 additional development each year can deliver several hundred to several million dollars to the business’ bottom line.”

About Starta Development, Inc.
Based in Raleigh, North Carolina, Starta provides standard and custom technology services for all members of the affordable housing industry. The Starta Enterprise System was initially released in February 2001 as a turnkey solution for managing development portfolios, from the initial concept through development and asset management.

Starta Development Serves LIHTC Developers with Automated Forecasting Tools

Starta Development announced that its service now enables developers to produce more apartments with greater profitability. Starta incorporates a unique ability to capture thousands of data points from the developer’s forecasting pro-formas. Not only does Starta track a legacy of evolving forecasts, but the system seamlessly captures critical data points from the developer’s Excel spreadsheet and aggregates the information into extremely insightful reports. The reports can then be automatically delivered to the desktop of key internal and external decision makers.

Gordon L. Blackwell, Starta’s founder, explains that “this feature can save literally dozens of hours a week and produces insights that could never be created using traditional, manual efforts. Moreover, the entire process completes in less than a minute just by uploading an Excel file with revised data.”

It is Blackwell’s hope that features like this will enable developers to produce more affordable homes annually with less cost for the developer, the occupant and the tax payer. “Our nation’s economy is entering an unprecedented period. Nobody can predict the end results, but the credit freeze likely means that an increasing number of families will require low-cost housing. We want Starta to be ahead of that curve. If our service can allow the development of just one additional apartment complex annually, that means additional homes for 40 to 200 families every year. It is also very helpful for our economy by providing the developer with additional income to pay the salaries of its employees. Now that is significant!”

The Formula of your Assets

As a developer, do you know how your properties are doing?  Literally, right now?

How long would it take you to compile the occupancy level of all your apartments?  What about re-certifications that are overdue or upcoming?  How about profitability ratios and delinquency levels?

A minority of industry leaders knows the current status of their properties and can retrieve that information in minutes.  However, the majority of owners are only notified of problems well after their onset. This creates an environment which is endlessly reactive, rather than proactive. 

The problem is not with any one particular business or group of businesses; it results from the structure of the industry itself. Partnerships of typical low-income housing projects consist of two entities, the MGP/GP and the LP.  The developer first conceives of the community and usually becomes the Managing General Partner or the General Partner, and selects the Limited Partner, who provides the required funding.

The Developer, or GP, is the most involved party while the property is being developed.  But once the community is in service, the developer’s focus shifts to the next development, which is more in need of the developer’s attention.   There remains an ongoing problem: the developer is still responsible for their historical properties.  However, the developer has minimal time to dedicate to ongoing supervision—and, in truth, their core value lies in creating new developments, rather than routine maintenance of existing properties.

The challenge of every developer is balancing their responsibilities to manage existing properties while continuing to develop.  The developer’s success lies in their ability to accurately and efficiently gather, process, analyze, and distribute information.  The developer must determine which data points most accurately relay the underlying reality of the status of their properties.  He or she must decide how to transform that information into value-adding knowledge, and how to distribute this value those who can best use it to drive profitability.

The average human mind can comprehend no more than seven data points at once.  This was discovered when the original Bell Companies were determining how many digits to use within a phone number.  They wanted to allow for as many possible combinations of numbers while remaining within the practical limits of our memory.  Therefore, to be most effective, the developer must determine what information can be collected that can be condensed into seven or less resultant data points that present the true standing of all their communities—while maintaining the ability to dive deeper into the data when a problem arises, of course.

 

The specific data points chosen will vary from developer to developer, based on the values of the organization and the types of communities.  Every development organization is unique, even more so than organizations in other industries. With the hundreds of events that occurring within communities every day, it can be extremely difficult to sort through the clutter to find the information that really matters.  The same is true with the human body itself: although there are thousands of measurable facts about bodily organs and systems, the general well being of a human can be accurately measured by watching a few simple key indicators such as temperature, blood pressure, cholesterol levels, and weight.  Properties might consider income, occupancy, re-certification levels, and delinquencies to be of similar value.

Once a developer determines the information that they to know, the data must be efficiently obtained and managed.  The property managers are the only participants that have first-hand knowledge of the current status of a property, and therefore they are the most valuable asset in data gathering exercise.  To achieve the long-term goal of maintaining a reliable, ongoing collection of data, the demands on the managers must be limited and the process must be fast.  Owners must request only the information that is actually relevant to their decisions, and make this information very simple to report. 

Starta Development, Inc. assists owners in this with an Internet-based system that effectively engages the manager in filling out a small series of owner-configurable, easy-to-use forms.  The service delivers these forms to the site manager on daily, weekly, monthly, or even annual intervals.  Starta recommends that each form contain 10 fields or less to demand no more than a few minutes at the end of each day.  The Starta Enterprise Service automatically sends Will-Call email messages as a reminder to the site manager with a one-click link to the input form.  The information, which can be reported daily, weekly, monthly or annually, may be approved by the manager’s corporate office before being accessible to outside parties.  The service also allows owners to design custom dashboards and reports to transform the raw data into valuable knowledge that gives a current status of the property, as well as historical snapshots and trends.

In a future release, the Starta Enterprise System will also include a rules-based engine that allows owners to define specific thresholds of comfort for each community.  The system will then alert owners and corporate property managers when these thresholds are exceeded.  For example, an owner may want to be alerted when occupancy drops below 92%, or when expenses exceed 110% of the average.  This automation allows developers to more effectively maintain their current commitments while continuing to focus their efforts where they are most valuable to the community and to their own business: developing.

The most successful developers will implement a system that limits distractions while revealing the key, actionable data that can be used in the decision-making process.   Every decision an owner makes is entirely dependent their present knowledge and awareness, and thus  must be confident  they have the most current and accurate information about all their communities to make the proper decisions.

From Data to Knowledge

The modern organization is increasingly dependent on information to operate efficiently in a competitive business environment. The collection, management, and analysis of data will grow to be the driving agent for successful organizations.

The database management system (DBMS) is the key mechanism for information storage in the modern enterprise. The DBMS is the software that manages the collection, storage, retrieval, and manipulation of the enterprise’s data. It stores key business records, including customers, employees, and financial information and when designed correctly, the DBMS is capable of converting data into knowledge. Therefore, the DBMS is the fundamental technology for driving business decisions and has become an indispensable tool for all industries.

The Meaning of Data

The Oxford English Dictionary defines data as “known facts or things used as basis for inference or reckoning.” Data represents raw facts about a business and is considered to be raw because it consists of unexamined specifics that do not have meaning on their own. Data can be stored in a structured or unstructured format. Structured data is highly organized and must be unambiguous, such as entries in an enterprise contact management system. An example of unstructured data is a system that stores resumes of individuals; each resume may be in a different format and created by a different word processor.

Data is the basic building block of information. It is the essential raw material that is processed into information. The business must drive the flow of data to encourage evolution into the knowledge that is used by all members of the enterprise. This knowledge must guide all business processes and actions, if an organization is to be effective.

Developing the Database Management System

When databases were initially developed, they were designed to simply record transactions, like product orders. This type of database is referred to as an online transaction processing (OLTP) system and is employed to automate and record basic business activities. OLTP systems support the day-to-day operations of the enterprise by recording raw data generated by a specific process.

When implementing a new database, an effective Database Administrator (DBA) will begin by documenting (on paper) a detailed data model. The data model will specify the major entities of a process, the attributes of each entity, and how each entity is related. Each entity will be stored in a table and the attributes of each entity will be structured into fields.

Generating Information

The Oxford English Dictionary defines information as “what is told; items of knowledge.” Information, within the scope of technology, is a collection of data that has been processed into a meaningful form. Most people cannot process or understand more than about 20 references of data at one time. Active organizations will rapidly gather hundreds of thousands of records, consisting of data that has no value in its raw form. Systems must be used to process data into a more comprehensible format, such as summaries or totals. Online analytical processing (OLAP) systems provide the means for business users to analyze raw data. These systems enable business users to drill down into masses of data and isolate information, such as which products or services are most profitable. I have heard many executives complain of “Information Overload.” By leveraging the abilities of an OLAP system, this problem can be eliminated. OLAP systems are designed specifically to support mission critical business decisions and therefore are classified as Decision Support Systems.

Delivering Knowledge to Determine Action

The Oxford English Dictionary defines knowledge as a “person’s range of information.” Knowledge is created when historic patterns and relationships are established to derive accurate decisions for future action. It is information taken to the next level of abstraction. 

Computers will never make better decisions than people. Knowledge is a combination of structured and unstructured information. Although structured information is fairly simple to collect, unstructured information is derived from an unlimited number of sources. Unstructured information does not reside in fixed locations and cannot be processed by a computer.

Technology is entering a new era as it enhances a leader’s ability to successfully supply refined decisions. Systems are beginning to evolve and integrate structured and unstructured information sources. One example of this improved ability is seen in an Online Knowledge Management (OLKM) system. The tool enables leaders to review information that has been created by OLAP systems and integrate it with unstructured information sources. The raw data presents key indicators that can generate an alerting mechanism and trend analyzer. However, there is the requirement that this data be linked to unstructured information to offer context and meaning.

Sharing Knowledge

Portals are the best tools to deliver diverse business content to a workforce. Using web-based technologies, a portal assimilates structured and unstructured data for easy access from a single point of reference. Portals are the view that business users see when they log on to their system, and to which they regularly return. A portal acts as a central location for finding critical information and knowledge through which business decisions are derived.  Portals are very attractive to users because they can be personalized to provide a single view into the enterprise that is relevant to a particular person’s role, responsibility, and interest.

As enterprises strive to improve their operations and work more closely with their business partners, a central repository of knowledge is essential for coordinating activities. The DBMS is that central repository, and the portal is increasingly the most efficient and effective way to present the information stored inside. Industry leaders are learning that success results when knowledge is easily accessible and when this knowledge is effectively shared with all business partners.

The Paper Explosion

The amount of documents demanded by investors, housing agencies, and HUD has dramatically increased during the past several years.  Developers not only have to collect paper, but they must distribute each document to the unique set of participants that require the information to complete the work.  A few leading edge developers have strive for the “paperless” office, yet they continue to generate more paper than ever because they cannot easily control the flow of documents to people.

The American Records Management Association (ARMA) estimates that organizations double the amount of paper that they file every 10 years.  The average white-collar worker generates an estimated 15,000 sheets of paper per year.

It is an expensive mistake to not realize the cost of inefficiencies that occur as the volume of paper increases. Paper files are difficult and time consuming to locate.  Documents are misfiled, not accessible when taken by another person, or in the worse-case scenario, permanently lost.

Even more unsettling is the amount of money organizations spend to file and maintain paper. According to the ARMA, the average 4-drawer file cabinet can costs almost $10,000 to fill. This amount does not include the $26,000 per year in labor spent to retrieve and maintain paper files. Studies have shown that the average document in an organization is photocopied 19 times, with 25% of the filing time for that document being spent in walking to and from the photocopier.

Starta Development, Inc., an organization based in North Carolina that manages documents for affordable housing developers, has determined that the developers spend more than $17,000[1]  managing the documents for each development.

Affordable housing developers are challenged daily with the generation and management of 300 to 500 documents for each development. This is further complicated by the fact that each development is comprised by an average of seventy-four individuals from thirty-three external organizations. This leads to two major tasks for the developer, the management of people and the management of paper.

The developer typically selects participants for each potential community and begins requesting documents from each third-party contact.  Most documents are mailed to the developer’s office, physically received, duplicated, and locally filed by a member of the developer’s staff.  Copies of each document are mailed to the numerous participants who require information contained within the document. The process is repeated as revisions are made, inevitably causing some parties to refer to outdated versions.

To specifically support the unique demands of the affordable housing industry, Starta Enterprise System, developed by Starta Development, is designed specifically to support the affordable housing industry.  There is no cost for anyone to use the system for any development that does not receive funding.  In theory, a developer could use the service indefinitely and never be charged (of course, this would mean they are not a successful developer).  It is important to note that at the time the development is awarded, the Starta technology is billed as a service to the development.  Starta is not absorbed by the developer as an overhead or fixed cost, but rather by each community that receives its value.  Some developers classified a portion of the servicing fee in eligible basis by demonstrating the savings created by the use of the Proposal Management module.

To effectively manage the flow of information, it is best to enable all third parties and investor to access relevant information and document.  Starta has simplified this challenge by allowing developers to specify exactly how little or how much outside parties may access or modify.  Once a development is added, the developer selects their participants and assigns roles for each person.  A person only has access only to developments where they are participating, and their role at each development limits what information and documentation they may view or modify. 

Developers should also dedicate their time to developing, not technology issues. Starta development documents are maintained in a central repository that is continuously backed-up to two offsite locations.  Internal and third party participants may submit their documents via the web, a toll-free fax line, or email.  As documents are contributed, each participant who has been granted access to the document is notified of its availability.  Outdated versions of each document are maintained for reference, but the most recent version is always presented by default.  Customizable checklists extend the value of the base document management system by providing an immediate status of every application and closing binder.

Tracking progress of each project and analyzing the status across a developer’s portfolio is more than an idea with today’s technology.  The Starta system has easy-to-use checklists that track the receipt of documents.  Reports may be quickly created that analyzes the entire portfolio or across multiple communities.

For the inevitable audit, partners may grant auditors access to one or more developments.  The auditor may be allowed access to all documents or to a specific collection with minimal effort.  In addition, the auditor may perform the audit from anywhere in the world, saving time and travel costs.  What was once a time demanding task may be accomplished in minutes with the proper system.

 

Fast Facts

•  The average company spends between 7-14% of its total costs on document processing in a paper environment

•  An estimated 7.4% of staff time is spent searching for documents

•  Average storage cost per page = $0.014 per year, or about $1,400 per file cabinet

•  Storage requirements for hard copy documents DOUBLE every 3 years

•  The average company spends 280 hours annually per employee looking for lost documents

•  Due to a lack of solid disaster recovery planning, 70% of companies Never fully recover from a disaster

 

Source:

American Records Management Association (ARMA), IDC

Starta Development Releases Tax Credit Allocation Management System

Starta Development Releases Tax Credit Allocation Management System

Web-Based tool extends features beyond managing community development

Raleigh, North Carolina, October 25, 2008:  Starta Development today announced its ability to manage tax credit allocations via a secure, web-based service. Although its service remains the most robust tool for the development of affordable housing communities, Starta has added specialized features to track the full-life cycle of tax credit allocations.

Christopher M. Park, Starta’s Chief Technology Officer, explains that “the Starta Enterprise System combines features typically found in CRM, ERP, project management, and document management systems to give your staff a consolidated view of your business.  Our robust framework allows you to quickly get your current projects up and going, while our deep customization options and custom programming services allow you to tailor the system to your exact needs.”

“This is a major step forward for Starta,” notes Gordon Blackwell, Starta’s president. “Syndication of tax credits remains a challenging operation with increasing business risk. Starta minimizes these risks by integrating client-created forecast models that synchronizes with Starta. As the models are revised, Starta imports hundreds of variables and captures snapshots of every worksheet.  This process enables analysts to make accurate and timely decisions.”

About Starta Development, Inc.

Based in Raleigh, North Carolina, Starta provides standard and custom technology services for all members of the affordable housing industry. The Starta Enterprise System was initially released in February 2001 as a turnkey solution for managing development portfolios, from the initial concept through development and asset management.