OSCRE, short for the Open Standards Consortium for Real Estate, likens itself to a car that requires a company to build it and savvy engineers to keep it running smoothly. The forces propelling this unique non-profit organization are the multitude of real estate groups that form its membership base, representing 12.3 billion sq. ft. of space and more than $2.1 trillion in real estate assets.
Members include CoreNet Global, BOMA International, TIAA-CREF, Real Capital Analytics, the U.S Department of Defense and such direct competitors as Yardi Systems and Intuit Real Estate Solutions, as well as Colliers International and CB Richard Ellis. But these entities don’t let professional rivalries interfere with their objective of creating new -exchange standards that will save their industry millions.
Andy Fuhrman, CEO of Santa Cruz, Ca.-based OSCRE Americas and a former consultant for Cisco Systems, talks about the mission and impact of the member-funded consortium:
NREI: How was the company formed?
Fuhrman: Members of CoreNet Global, who were facing the challenges of handling an enormous amount of electronic real-property information, created a discussion group, which grew in interest. It soon became apparent that the industry needed more uniform standards. But CoreNet realized it didn’t want to become a standard organization so it spun us off. We started in 2004 without a dime, but have steadily grown our membership base.
Our timing, I think, was right. Today’s economic climate is telling us we’re going to have to do more with less, only faster than ever and with better quality. So people are now doing the jobs of two or three, and need to find ways to harness their data to save money and time.
NREI: How does OSCRE facilitate this?
Fuhrman: We serve as a gathering point for the industry to address its data-management and software application challenges, and offer a means to integrate it into a form that eliminates manual data input and data scrubbing. Improving data quality is a main objective for us because it allows people to more readily exchange information.
NREI: What types of e-standard inefficiencies are most common and how costly are they to organizations?
Fuhrman: It’s become evident that there are billions of dollars left on the table for lack of what we call interoperable activities. The main areas are software applications that don’t talk to each other and data in various electronic formats that aren’t compatible. For example, we’re participating in a work group with several organizations to automate work order fulfillment.
Corporate and commercial real estate companies process thousands of work requests from their occupants using in-house staff and they outsource service providers. Fulfilling the transaction quickly and efficiently at lower costs with improved occupant satisfaction is critical. We’re working with our members to streamline that.
NREI: How do you find members?
Fuhrman: They come to us. It’s become apparent that people are sick and tired of trying to reinvent the wheel while trying to connect their internal and external applications together with various software products. The travel industry has come together with data standards that we see on competing sites such as Orbitz and Travelocity. We’ve come to realize that it’s time our industry did the same. It’s important to note our members are the most knowledgeable about their own business processes and that our job is to get them together to create uniform standards.
NREI: How do you typically address a company’s data uniformity problems?
Fuhrman: We can’t do this for just one organization. We require a significant cross section of industry participants working in a democratic environment to create an industry standard.
NREI: How do you establish real estate data uniformity?
Fuhrman: For example, take the state of Washington. Some people abbreviate it “WA.,” some “WASH.” And when they run a Washington property report, they get separate totals for each spelling and for wrong spellings. We’re creating uniform guidelines to address that. In this case, we simply refer to the U.S. Postal Standard’s 2-digit code.
We work with our members and industry associations in an effort to get them to harmonize code lists such as “State,” “Country,” “Currency,” “Units of Measure,” “Property Type,” “Floor Space Classifications” and many other code lists as they are the basis of how the industry slices and dices its data. This is particularly important for benchmarking projects, which traditionally have not yielded apples-to-apples results and won’t until we all measure the same way. And this is particularly critical to commercial performance indices.
NREI: Once you’ve identified a solution, how do you disseminate that information to members?
Fuhrman: Actually, it’s our members who develop their own solutions. Our work-group project managers insert their information into a specialized form and convert that into what’s called an “XML Schema” that will become the industry standard, which we post on our Web site for stakeholders and the entire industry to download at no change. It’s interesting, because if we added up labor time of the industry professionals working on these solutions, our Appraisal Reporting Standard alone would be equivalent to 3,000 labor hours valued at $900,000.
NREI: How do you educate the real estate world on what you’re trying to accomplish?
Fuhrman: Our marketing strategy is multi-pronged. We go to various annual conferences and road shows, send out press releases, work with industry associations to educate their members and even do some cold calling. We’re getting great word-of-mouth referrals as well and are getting calls from all around the globe. At RealComm 2008, we did demos of OSCRE standard abstracts, work-order fulfillment and appraisal reporting standards before 250 industry leaders.
NREI: Can you give us a few examples of solutions emerging from your work groups?
Fuhrman: For companies with large portfolios, data about multiple sites and multiple tenant leases takes months of manpower to manually enter. But rents are established off that, so there’s a high demand to get that information integrated more quickly. Based upon demonstration performed by our other work groups and studies performed by other standards bodies, shared business processes that traditionally take months, weeks, days and hours will be transformed to minutes and seconds using OSCRE and similar industry standards.
During a demonstration of our Appraisal Reporting Standard at RealComm 2008, two member organizations, one representing a major service firm offering appraisal services and one from a major organization, showed how they will eliminate at least one hour of work processing appraisal reports.
The service firm produces an estimated 25,000 appraisals per year. Shaving one hour of processing time represents a combined labor savings of over $2 million for those financial institutions also using the OSCRE appraisal standard. These types of approaches represent a seismic shift in the way the industry is going to operate in the near future.