By Joe Bousquin, Multifamily Editor and Writer

For Mark Gluskin, chief financial officer at Sherman Residential in Deerfield, Ill., negotiating annual contracts with every vendor that serves the firm’s 15 properties can be a daunting task. While he re-visits the pricing he gets from major partners who serve his entire portfolio annually, reworking contracts with the smaller suppliers he buys from in each market can fall by the wayside.

"Obviously, if you’re talking about someone like HD Supply or Staples, which we use at all the properties nationally, it’s worth it to talk to them every year," Gluskin says. "But let’s be honest. When it comes to the carpet guy we use in Dallas, are we reviewing that and sending it to bid every year? Probably not."

That’s why Gluskin’s eager to implement OpsAdvantage, a new offering from RealPage’s OpsTechnology unit that extends pre-negotiated discounts from multiple vendors to apartment operators. RealPage President Dirk Wakeham unveiled the product at the 2009 RealPage User Conference in Dallas with a rundown of its advantages.

"Members will save up to 20 percent on every purchase from contracts that are negotiated with suppliers on behalf of their collective buying power," Wakeham said. "Based on an estimated annual spend of $400 per unit, you can add up to $80 per unit to your NOI. That’s an annual savings of $16,000 per site."

That introduction rang true with Gluskin, who’s already been a user of OpsTechnology’s OpsBuyer spend management application since 2004. With OpsAdvantage, he sees an opportunity to get better, updated pricing on everything from light bulbs to ceiling fans to paint for the 4,000 units he oversees. But he’s also looking forward to the product standardization and efficiencies that a centralized purchasing program can deliver.

"Of course, we’re always focused on hard costs savings, especially in this environment," says Gluskin. "But I think there are also a lot of soft cost benefits to a system like this in terms of more efficient operations and more accurate reporting capabilities."

For instance, he already tracks the $10,000 to $15,000 in expenses each of his properties incurs each month using OpsBuyer. When he bolts the pre-negotiated buying power of OpsAdvantage onto that system, he’ll enjoy bigger discounts than he could ever get individually, while being able to monitor all of his costs in a single system. "It allows us to use Ops as our very own purchasing department, which we could never develop in-house," Gluskin says. "We’ll be able to see whether our pricing is competitive with the pool supplier we have in Dallas, for instance, or if not, have four other vendors to choose from."

That’s exactly the vision that Sukhi Singh, co-founder of OpsTechnology, had in mind when RealPage acquired the company in 2008. Pouring through RealPage’s client lists, he realized he could offer clients without in house purchasing departments a service that offered real value.

"OpsAdvantage was really born out of the idea that small to midsize property management companies can’t invest in developing their own purchasing programs," Singh says. "What OpsTechnology and RealPage are offering here is a ‘purchasing program in a box’ to give them pre-negotiated discounts as part of a larger buying group." As part of its launch, customers can sign up to become members of OpsAdvantage at no cost for a limited time.

By combining OpsAdvantage with the broader suite of OpsTechnology’s systems, operators like Gluskin will see who’s spending what at each of their properties, while limiting purchases to pre-negotiated goods and services. "That’s when the fireworks really start going off," Singh says. "You’re maximizing your returns from having a purchasing program, and then you’re tracking and monitoring purchases down to the user level to make sure you have compliance."

That pairing solves a problem that’s plagued multifamily operators for years: knowing what your sites have already ordered and paid for, versus what they’re dragging their feet on to stay within their monthly budgets, at least on paper.

"In the past, you’d go to reconcile your ledger, and you’d ask your managers if they had any outstanding invoices. Almost always, they’d say no," Gluskin says. "Then, the next month, you’d get hit with eight invoices for carpet repairs that were sitting in a drawer somewhere. By combining the two, it takes that possibility out of the equation, because the purchase order is already in the system to begin with."

OpsAdvantage will be available to customers in the second half of 2009. HD Supply and Staples are among a growing list of suppliers already in the network.