Countdown to NAPE - Part 3
Countdown to NAPE Summit
Are your Field Acquisition Methods Obsolete?
Delivering More for Less: Increased Efficiency = Increased Competitiveness
Note: This series is geared toward land brokerages. It is designed to help them realize how they can differentiate themselves and therefore be more competitive by utilizing technology solutions already available to them. Obviously, if you are engaged in the hiring of brokerages, this information will be helpful to you as well. A more efficient brokerage can deliver more for less, and everybody wins.
Part 1 of 5 – Broker and Client Billing
Part 2 of 5 – Title Management
Part 3 of 5 - Field Acquisition
Part 4 of 5 – Asset Tracking
Part 5 of 5 –The Status Quo is too Expensive
Field Acquisition
Land industry lore is full of accounts of landmen carrying their pre-printed lease forms and their manual typewriters with them in their cars when visiting landowners. While these accounts may seem like quaint reminders of a bygone era, they are actually perfect examples of land industry professionals being just that—professional—by employing the best methods available to them at the time. At least the leases were not hand-written…
I entered the land industry in the mid-90s, running title and dealing with landowners. In my case, I started on a 3D seismic shoot, which meant that our team acquired a variety of agreements to facilitate the project. We had seismic permits, seismic permits with the option to obtain an oil, gas and mineral lease, straight OGMLs, rights of first refusal, rights-of-way, tenant farmer agreements and more. (“contracts”). In our case, we prepared our contracts by using either pre-printed forms filled with (electric) typewriters or by having the entire document in the industry-favorite Wordperfect for DOS. Again, this was the best means available at the time, but that experience, as well as those to follow over the next ten years, provided much insight as to the pros and cons of such methods, as well as what a more ideal method would look like. As with previous articles, let’s take a look at what options are available to landmen today.
Let’s begin with an overview of the more or less common steps needed in the acquisition of a contract. To simplify, we will assume that the landman is running his/her own title. First, it is common to maintain a list of assigned tracts (or landowners). Either way, some sort of log is kept, usually on a spreadsheet, with key information so that the spreadsheet can also be used as a report to provide a status of progress to supervisors and clients. A typical tract-tracking spreadsheet may have a tract ID, landowner(s) name(s), gross and net acres, location, contact history, title status, leasing status, comment or more. This is information that is keyed in and updated regularly. A contact letter may or not be prepared, but if so, it will contain much of the information on the tracking spreadsheet. When time comes to prepare the contract, much of the same information is used again, then again on the payment (draft, order for payment, check request, etc.), then again on the LPR or similar report, again on the lease schedule. The contract is then forwarded to the client in the form of a lease packet. Afterwards, the same information goes into one or more title opinions, division orders and other legal and reporting forms.
This subject matter of this article alone could easily comprise a full ‘Countdown’ series, but in order to keep this article as brief as possible considering the vast nature of the subject matter, I will approach our familiar three categories with an eye to the following areas, each assigned a rating of 1 for lowest and 5 for highest.
Efficiency - the extent to which information is retyped or copied/pasted throughout a process. A low rating indicates that virtually all information is manually transferred between stages of the process. A high rating indicates that information is captured once and then available for re-use as appropriate for each stage.
Flexibility – the extent to which document preparers can adapt quickly to changing circumstances without being bound by a rigid process. A low rating indicates a lack of ability to address needs via customization.
Accuracy – the extent to which mathematical results and presentation depend on automation vs. at least some manual calculation. A low rating indicates that numerical results are manually calculated.
Consistency - the extent to which documents (whether contracts or reports) are uniform from document to document, landman to landman and project to project. A low rating indicates that preparers have a great deal of leeway in formatting of documents and reports, such as fonts, margins, bolding and underlining, column widths, column orders, etc.
Control – the extent to which individual contract preparers can change the wording of the ‘body’ of the contract or riders. A low rating indicates no control, meaning the preparer can change content at will.
Integration – the extent to which information can be further used for additional purposes, such as dynamic GIS presentation and other critical metrics. A low rating indicates no integration.
A true paper only is simply not feasible nowadays, but for the purposes of this article, I will consider the use of word processors and spreadsheets, as long as no automation connecting data and documents is involved, under this category.
Efficiency (1-2) The only reason this does not receive a 0 rating is that copy/paste does in fact speed up the process and reduces the instance of error as compared to manual entry. I assigned a range due to the fact that the benefit will be determined by the preparer’s ability and willingness to take advantage of it.
Flexibility (5) By far the best defense of a paper only system. Preparers have the ability to change their documents at will.
Accuracy (3) Spreadsheets are very efficient with regard to mathematical functions, but it is the preparer’s ability to ‘tweak’ the functions and therefore errantly report figures that keeps this from being rated a 5.
Consistency (1) When preparers have free rein over formatting and presentation, output will vary.
Control (1-3) This category receives a range since portions of word processor documents can be locked for editing, but that feature is often not used. Even if it is, preparers will generally have the need to add or edit riders, which there is no way to control effectively using a distributed word processor-based document.
Integration (0) By definition within this article, the paper only method does not include integration.
The use of integrated desktop applications (word processor, spreadsheet, database, imaging software, etc.) is common, and a big step above paper only, but far from being ideal. The idea is to take advantage of the integration already available within a system like Microsoft Office to allow programs to ‘talk to each other’ and therefore increase productivity. In reality, while the technology is there, it is the implementation that becomes unwieldy very quickly. First, these systems require many man-hours to build, generally evolve over time and require continual maintenance—all of which is costly. Second, once the decision is made to rely on such a system, uptime becomes an issue and distribution throughout an organization is difficult, creating a whole host of additional issues to be considered and addressed.
It is also important to note that in regard to system design, there is often a tradeoff between flexibility, control and accuracy. More flexibility means control and accuracy suffer. More control means higher accuracy and lower flexibility. Only a relatively elaborate system can accommodate all ends simultaneously. For the purposes of this article, I will assume that control is the objective.
On a personal note, I spent most of the last 5 years of my time as a landman designing and building various systems as described, before realizing the ultimate futility and moving on to create the TotaLand system over 10 years ago.
Efficiency (4) A well-designed system can indeed almost eliminate an individual preparer’s need to retype or copy/paste information by capturing once and reusing over and over. The reason this does not receive a rating of 5 is that, as long as the data is not available via a central, wide-area (internet) network, a fair amount of manual compilation is still required.
Flexibility (3) The biggest complaint of users of this type of system is the lack of flexibility, particularly when speed is a concern (as it often is). This lack of flexibility is usually addressed by simply permitting the preparer to go outside the system in ‘emergencies’.
Accuracy (5) A well-designed system will have the functions in place and pull the correct data from the correct places, ensuring accuracy.
Consistency (4) Report templates and mail-merge functionality are greatly conducive to consistency, as long as the preparer is prevented from formatting the document.
Control (5) Since this analysis that control is an important objective, it is set at 5 here. However, it should be noted again that a system that provides meaningful controls must be carefully planned and implemented.
Integration (4) By definition, this system is very well integrated. When designed well, it can easily link to GIS functionality. Short of wide-area (internet) integration, however, its potential is severely limited.
A web-based system, particularly a SaaS model (software as a service), essentially has the advantages of the integrated system described above, but with the significant benefit of a wide-area network. Since data does not need to be compiled, results are real-time, meaning if a user indicates that title is complete or that a landowner is signed, anyone with the authority to do so can view reports and maps that will reflect that updated data.
The importance of a SaaS model comes down to cost. Maintaining a staff of developers, along with redundant hardware and data, can be very expensive. SaaS products spread those costs over thousands of users and over long periods of time, enabling all brokerages, from the smallest to the largest, to enjoy the best technology without the cost or wait.
It may not be a surprise that a well-designed system should receive ratings of 5 across all categories. I will however, concede that the biggest knock against many SaaS systems is a lack of flexibility. A well-designed system should provide a balance of standardization and customizability. As with the previous method, lack of flexibility is usually addressed by simply permitting the preparer to go outside the system in ‘emergencies’.
Finally, web-based systems as a rule do not require software to be installed on the user's computer, and provide hardware redundancy (for maximum uptime) and data redundancy (multiple backups spread across multiple locations). Referring back to the build or buy question, this is simply too costly for almost all individual brokerages to do themselves economically.
We at TotaLand have seen dramatic improvements in the lives of our clients, reducing field acquisition costs through increased efficiency, and allowing them to focus on what the client is paying them to do. How much is that worth to any organization, particularly one trying to remain competitive in a difficult environment? If your organization is not utilizing such technology, come visit us at booth 2552 next week at NAPE Summit, or give us a call at 800-465-5877.
Most importantly, now is the time to implement a quality, web-based field acquisition system. When things get busy again (and they will), the golden opportunity to become more efficient will have passed.
As we approach NAPE next week, we will be posting more articles about how brokerages can become more efficient, and therefore more competitive. See you at NAPE!
Bill Justice – Founder / President, TotaLand Technologies