Real estate company refines, expands geographic information system

Marcus & Millichap shakes off its archaic data cleansing and analytics system for more automated processes, enabling the firm to explore its data on a more granular level.

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Marcus & Millichap’s John Chang knew the day he walked back into the office he would need to do a little technological remodeling.

“As soon as we went through the first market share reporting cycle, I knew we had to change it,” he said. Chang worked for the Calabasas, Calif.-based real estate company in the late 1990s; in 2007, he returned to serve as the vice president of research services, a position he holds today.

To produce those market share reports, Marcus & Millichap employees would pull all of the recent sales information and statistics and sometimes manually “scrub” the data by identifying and removing duplicate entries.

The data then needed to be formatted in a specific way so that it could be pulled into the market share calculation system, built on a combination of SQL Server and Microsoft Access software. Ultimately, the process was so labor-intensive, each set of reports took five months to complete, Chang said. That translated into producing the reports an annually rather than semi-annually as they had hoped.

“By the time we generated a report, it was nice to have for benchmarking purposes, but it wasn’t really useful to us in the day-to-day operation of the business,” Chang said.

In other words, Chang said, he had a problem, but he didn’t have a solution. Or at least he didn't think he did; as it turns out, he was closer than he thought.

What is this Alteryx thing?
In the late 1990s, Marcus & Millichap became a customer of SRC LLC, which carried an aggregator of demographic data and geographic information systems (GIS) components. In 2010, SRC officially changed its name to Alteryx, which also happened to be the name of its analytics platform for integrating data from multiple sources and building applications with geographic data.

Marcus & Millichap had the foresight to negotiate access to the Alteryx platform before it was commercially available. The only problem, Chang said, was figuring out what to do with it.

“It was difficult for my staff members to communicate to me effectively what it could do,” he said. Even after attending a user conference, Chang’s team seemed impressed by the technology but couldn’t articulate where or how to apply what they saw at Marcus & Millichap.

“As a result of that, it sat in incubation for almost a year,” he said.

The following year, Chang attended the user conference and came away with a list of 20 different project ideas.

“I came back to my office, pulled together a team meeting and immediately began applying the software,” he said.

While some businesses integrate new technology slowly, Chang chose the opposite approach by taking on the largest project he could: Rebuilding the market share system.

And, although the project required custom development, which meant paying Alteryx consultants to help with the build, Chang said convincing executives to move forward wasn’t difficult.

“We had the advantage,” he said. “We already had the Alteryx software.”

Today, Marcus & Millichap continues to use Alteryx as a GIS for things like making maps, integrating demographics data, identifying locations and geocoding addresses. The Alteryx system also collects and combines data from different sources for analysis. And Alteryx has helped to automate certain processes.

Each quarter, for example, Chang’s team produces a set of PowerPoint slides breaking down every major market. Now those slides are produced by the Alteryx system. In some of the more repetitive cases, Chang’s team builds modules to create “push-button” reports. In other cases, such as the market share reports, fuzzy logic capabilities can flag potential data duplications and help reduce the time it took to scrub the data.

According to Chang, automation has replaced more than two full-time positions.

“I’m not saying companies need to lay off staff and automate everything,” Chang said. “What I’m saying is that you can divert those resources from labor-intensive projects to higher-value projects.”

For Chang’s team, some of those hours are spent analyzing the data on a more granular level than ever before.

Making its move
But Marcus & Millichap uses Alteryx to do what it was created to do back in the late 1990s -- develop applications for geographic data. Today, Alteryx is attempting to make a name for itself as more than that.

In April 2011, Alteryx secured a $6 million series A funding for SAP Ventures to “support accelerated growth opportunities.” Jai Das, managing director of SAP Ventures, joined the Alteryx board of directors; executives from Hewlett-Packard and Malibu Ventures later followed. And both George Mathew, formerly of SAP, and Rick Schultz, formerly of Oracle, have both taken positions at Alteryx.

This year, Alteryx elbowed its way into the Stamford, Conn.-based Gartner Inc.’s Magic Quadrant for Business Intelligence Platforms for the first time. According to the report, Alteryx customers are using the product for “complex analytics on large data sources,” a popular topic in the analytics industry today. Still, although it notes the company’s plan to expand its predictive analytics capabilities, Gartner says Alteryx’s use cases make it a classic niche player.

Chang may argue against Gartner’s description. In fact, he described the tool as having a “wide range of applications.” Because of that, he said, executive sponsorship is needed to successfully deploy and use Alteryx.

“You need to have someone with a strategic perspective to be involved in planning how to use this software,” he said. “Someone who has an appropriate base of knowledge and information about the company’s goals and a vision of how the tool can be applied.”

Without an executive who can provide the big picture perspective -- someone who can provide direction -- Chang said, a tool like Alteryx is at risk of being overlooked and undervalued.

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