Companies are creating new technologies every day to help property owners, tenants and service providers operate more efficiently and serve their clients more effectively. The velocity of change in real estate technology and the expansion of capabilities can overwhelm even the most experienced real estate executives, so how can you possibly decide which CRE technology solution is optimal for your organization, your portfolio and your objectives? It’s a daunting question.
The answer lies, in large part, in understanding the drivers behind your search and clearly defining your desired outcomes and stakeholders. For instance, does your organization need more visibility into total cost of occupancy to create meaningful revenue-to-cost metrics for the CFO? Is Human Resources focused on recruitment and retention initiatives that require a better experience for the employee and, therefore, better visibility and management of space? Does the real estate group need better data to benchmark internally and provide better service to their internal customers?
The answers to these and other questions will direct you toward either point solutions or Integrated Workplace Management Systems (IWMS). Then, they will help guide you through the evaluation process to the best point solution or IWMS for your organization, requiring the least amount of customization.
Point solution or IWMS?
Typically, organizations will begin evaluating new technology for a combination of three reasons:
- Their existing technology wasn’t implemented properly
- They’ve implemented software they haven’t learned how to leverage, or
- They're being asked to aggregate information that they don't have available to them
The industry is trending away from integrated workplace management systems (IWMS) toward less expensive point solutions that solve for one particular need. Many organizations are already integrating data from many systems (Accounting, HR, etc.) with a Business Intelligence (BI) tool, and the real estate technology becomes an additional source of data imported into a corporate or service provider BI tool. This allows for a fully integrated view of the enterprise without the time and expense of an IWMS software implementation. Understanding the data export/import capability of any software and the availability of that data to integrate with other systems are key considerations.
There’s still a place for IWMS for very complex portfolios, but that decision should be made based on the complexity of the organization and not solely on the size of the real estate footprint. A 3 million square foot laboratory and medical manufacturer with multifaceted space management and financial reporting requirements have a much greater need for the sophisticated data sharing, analytics and reporting facilitated by an IWMS solution than an organization with 50 million square feet of Class A office space requiring little more than lease data.
It’s also key to understand the difference between configuration and customization. All software requires some initial configuration but shouldn’t require extensive customization. The need to customize can be minimized by focusing on outcomes and asking service providers to propose only products that meet those outcome scenarios. Technology solutions, like automobiles, can be initially configured with selected option packages and features. It’s possible to add features after a car’s driven off the lot or after a tech solution’s been implemented, but only with difficulty, added cost and uncertain results. In other words, the less customization, the better.
And we’re just getting started
Only about 10% of large RE companies leverage technology products and solutions, like IWMS to manage their real estate, space, leases, capital projects, etc. An even smaller percentage are using the data they’re collecting to build the analytics and dashboards required to spot trends and make faster, smarter business decisions. Why?
Perhaps the answer lies, in part, in not knowing how - or when - to begin evaluating technology in the context of a RE organization’s needs. We’re still in the early stages of an ongoing educational process for CRE executives, a process that, while it can’t hope to keep everyone current on all the new technology, can clarify the questions that need to be asked to focus the search and improve the odds for successful implementation and long-term value.
Whether your organization possesses the competency to answer such questions internally or you use a third-party service provider/consultant to guide you through the exercise, clear-eyed visibility into drivers and outcomes is critical to choosing the best technology fit.
For more information, contact the author:
Executive Managing Director – East Region Lead