Most real estate tech firms find success by remedying the day-to-day administrative headaches that distract commercial real estate operating companies from their prime functions of managing their assets. One such company, OpsTechnology, has made an industry name for itself by streamlining the work flow between such real estate firms and the many product and service vendors they use.
The San Francisco-based company, founded nine years ago by real estate veterans Rajiv Naidu and Sukhi Singh, helps spare clients such as United Dominion, Camden and Avalon Bay most of the red tape that surrounds their procurement, payables and purchasing processes across thousands of vendor transactions — to the benefit of both operators and vendors. OpsTechnology now handles payables and cataloging functions for eight of the country's top 10. Sukhi Singh, the company’s chief operating officer recently spoke to NREI about that third-party role.
NREI: Can you give us a quick view of your products and what they do?
Singh: Sure.We have OpsBuyer, which is an on-demand, budget-control tool that integrates a company’s purchase orders, accounts payable and its online e-procurement systems with its suppliers’ systems. Then there’s OpsInvoice, an invoice management program that’s essentially a paperless accounts payable process. It eliminates the need to manually enter, approve and stockpile the many invoices that are routed through their systems. OpsPages is our free Internet-based directory of service providers and vendors ranging from hardware stores to temp agencies.
NREI: Many of your customers are large real estate operating and management firms. Can smaller firms take advantage of this technology?
Singh: Absolutely. We have smaller building owners and management companies as customers — all the way down to owners of a single asset. The same goes for our [supplier] network, which ranges from massive companies such as Sherwin Williams, Century Maintenance, Whirlpool, Depot and Home Depot to the small local mom-and-pop window washers and cleaning companies.
One of the beauties of our system is that it allows a company with, say, 20 to 50 users to use same system as companies with 10,000 users. The delivery model becomes very cost-effective for small companies. Everybody is getting the benefit of the same world-class infrastructure. That’s one of the reasons we are viewed as the industry’s best of breed. We focus on one thing and we do that one thing all day long.
NREI: How has technology streamlined your own ability to deliver these services?
Singh: We are bringing the types of tools you use to pay bills and to bank online to this business. With the advent of browsers, we found we could create a catalog of sorts by integrating the internal prices of a company with their external collaborators. And we are able to deploy these solutions relatively quickly because it is all Web-based.
Essentially, we have been able to deliver a system that gives operators much better network expense controls and far more effective collaborations with trading partners. This technology frees up real estate owners and managers to focus more on the important things: customer service and operations.
NREI: Are there any side benefits to your services?
Singh: Yes. An average customer may have 10 to 50 locations that they essentially manage as separate businesses. This system allows them to harness collective buying power and efficiencies and cuts out some of the internal policy hurdles.
NREI: How much do your products cost?
Singh: That varies. We charge people based on the benefits they derive. We have also been able to marginalize our offerings so [customers] can use certain pieces. A company’s costs might range from $10 to $20 per invoice to process their own invoices. We charge only a fraction of that — an average of about $2. This system also eliminates mail costs. In all cases, payback on our solutions has been within three to six months.
NREI: Is there anything new in the works?
Singh: We started in the procurement space and we are moving into total expense management. We have launched a processing service for accounts payable using a centralized invoice collection software that now allows clients to go completely paperless. We are also getting into bid management.
NREI: How does Opstechnology benefit investors
Singh: Investors obviously benefit from better operations. Plus, a more efficient property favorably impacts cap rates.
NREI: Tell us a little about your company’s internal operations.
Singh: Our executives were all real estate operators in the multi-family, property management, acquisition and businesses. That enabled us to come up with solutions to manage the capital expense and asset side of the business while everyone else in the business was looking only at revenue. It also helped us come up with technology that works with multiple partners and at varying levels of sophistication. Over the years, we have grown steadily and methodically and have just passed the $1 billion mark in transaction activity.
Besides our San Francisco location, we have offices in Southlake, Texas, near. We employ 40 people on shore and 40 people offshore in India. Because we had been a bunch of real estate operators, we knew how not to hire a bunch of people.