Why “Outsourcing” is No Longer a Dirty Word for Multifamily IT

Not many multifamily IT departments can say that they make a direct positive contribution to the bottom line. The administrators, technicians and engineers who keep property management computers running, linked to the internet and out of harm’s way are usually viewed as a drain on expenses. “Most IT departments are considered a black hole,” says Steve Gallagher, vice president of IT for Avenue5 Residential. “The company is going to put money in it that will disappear.” This isn’t the case for Avenue5, which is among the fastest growing companies in the industry and ranked on the National Multifamily Housing Council (NMHC) Top 50 Managers List. In 2014, Avenue5 Residential outsourced much of its IT so its team could look at the bigger picture rather than be mired in the daily “help desk” mentality. Not that the administrative functions weren’t important, but by offloading them to a third party the IT department could focus on strategic initiatives to become an asset for the company’s growth plan. Freeing up time and resources, reducing costs Just over four years later, Avenue5 Residential has fast-tracked to managing 200 units to more than 56,000 units without the burden of adding more and more bodies. Outsourcing has put the IT department in a position to operate at net-zero or contribute positive cash flow, Gallagher says. Something unheard of in any industry that relies on an IT department to navigate the growing complexities of the internet of things and computer technology. “When you look at building out an internal team, you can’t recoup that cost,” he said. “One way to offset it is use the outsourcing. You get a whole host of engineers and support level technicians. That  would be a substantial cost if you had to do internally. “That allows us to be creative and look at new ways to bring in revenue for the company. We can get creative and actually earn money,...