Part IV: A New Business Model for Delivering Next-Generation CRE Technology

By way of review, we began this blog series by outlining the primary challenge CRE organization’s face when it comes to deploying CRE technology. These organizations have traditionally had to choose between deploying a point solution, which promises to deliver deep but narrow and discrete functionality, or an Integrated Workplace Management System (IWMS).  

Each model has its shortcomings, whether it’s the lack of integration inherent to a point solution or the inadequate ROI many organizations realize from their IWMS investment – a problem often traced to the business model employed to deliver the technology. 

  • In that first blog, we introduced a new business model for CRE technology delivery and outlined its ability to reduce licensing and implementation costs.
  • We focused the next blog – the second in the series - on the next generation CRE technology’s promise of functional improvement; how a pre-configured and pre-integrated IWMS and Business Intelligence (BI) solution can provide superior business process flows or “playbooks” for delivering real estate and facilities services, improve data management and reporting, and improve the user experience.
  • In the third blog, we examined how this next generation CRE technology positively impacts the implementation process, namely its speed-to-value.
  • Now, in the fourth and final blog in the series, we examine risk mitigation, specifically how this new business model reduces contractual risk.
Reducing risk with a pre-configured IWMS technology solution
Many outsource service providers provide technology as part of their solution.
One question arising from such a close connection between the service provider and technology – perhaps the question asked most often by organizations considering the benefits of technology – is:

“What happens if we like the technology but not the service provider; can we switch service providers and still keep the technology? Who owns the data? Can we continue to operate?
Commercially available technologies, whether IWMS or point solutions, boast large user communities, and those user communities are comprised of numerous technology companies and implementers, all of whom understand the underlying technology and are qualified to support it regardless of service provider. Proprietary technologies, owned by a service provider, limit choice. There is one, and only one, firm who has the capability to service the customer without significant cost or risk. This marries the service provider and the technology forcing the CRE organization to choose “all or none”. This exposes them to significant risk. Proprietary technology should not be a reason to continue services.
Because the next generation CRE technology is built on commercial technologies, the CRE organization is free to ensure that best-in-class services are delivered. This next-generation CRE technology is open for collaboration - even amongst competing service providers - so the CRE organization isn’t required to put all its eggs in one basket. The delivery model reduces risk by expanding choice.
Further, the CRE organization contractually owns the data, compelling the technology solution owner to provide the data back to the CRE organization, if needed, in a format usable for data migration to a different solution or continuation of technology support by another firm. This provides the added benefit of focusing the service provider on performance and eliminating a common contractual risk.
It’s worth saying again: CRE organizations considering a choice between a pre-configured solution built on commercially available IWMS technologies vs. a proprietary solution developed by a service provider must ask the question: “What happens if we like the technology but not the service provider; can we switch service providers and still keep the technology?”
It’s not complicated - the answer will be either “Yes” or “No” – but the answer profoundly impacts the CRE organization’s risk exposure.

Alan Nager
Executive Managing Director, Technology

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