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Survey Says: More Multifamily Firms Outsource IT

APARTMENT FINANCE TODAY • May/June 2010

BY Chris Wood

SPENDING ON OUTSOURCING nearly doubled last year, comprising 23.6 percent of apartment IT budgets, compared to only 12.6 percent in 2008, according to a recent report from the Washington, D.C.-based National Multi Housing Council (NMHC).

According to the study, Information Technology Investment Benchmarking Survey: A 2008-2009 Comparison, the move to outsource tech functions was most prominent among smaller multifamily firms (those with less than 200 employees), which spend an average of 42.4 percent of their technology budgets on third-party IT outsourcing, compared to less than 1 percent spent by firms with more than 1,000 employees.

According to NMHC director of technology Lauren Dwyer, firms participating in the survey were generally looking to outsource internal, employee-facing systems rather than customer-centric software and services.

“Outsourcing leaned more towards day-to-day IT operations such as help desk support and other internal operations rather than software development,” Dwyer says. Other traditionally internal functions, such as call centers and lead management activities, are also increasingly being moved to a third-party provider.

Additionally, the survey finds that IT spending as a percentage of gross revenue increased 250 basis points last year to 0.95 percent of gross revenue, up from 0.7 percent in 2008.