It’s Wednesday, October 19, 2016 and I’m sitting on a plane returning home to Houston from Philadelphia where the 2016 CoreNet Global summit was just held. I attend and speak at quite a few CRE focused conferences every year and without doubt some of the best programming is consistently produced by CoreNet. The reason I even mention that I’m on a plane is to evidence the level of energy and excitement I get from this conference; I should be watching a movie like the guy next to me. Every CRE executive, broker, property/facility manager in the country should expand their knowledge and exposure by attending. And no, I’m not on the CoreNet payroll.
For those not familiar with CoreNet, it has been and continues to be one of the best commercial real estate conferences in the country. The conference is held annually in the US, Europe and Asia and showcases the most current technologies, trends and thought-leaders in our industry. As mentioned, this year was no disappointment.
Here are a few of my observations and takeaways from the conference:
- There was a big focus on globalization, global citizenship and geopolitics. This may sound like a warm and fuzzy for global communion, but it was much more pragmatic and useful. The sessions I attended pointed out the political hotspots worldwide that offered growth as well as risky instability for facilities based there as well as how these areas will affect us here. Dear to my heart were the additional discussions on practices and technologies employed by corporate users and brokers in other countries. Too much to cover here, but suffice it to say there’s some pretty progressive and amazing innovations in far-away foreign CRE cultures.
- Outsourcing of services is changing from arms-length, time based contractual arrangements to partnered incentivized relationships. As the leader of a technology service provider, I agree with this shift. As always, there was a lot of theoretical framework discussed, so I’ll offer a cliff’s note explanation. Essentially instead of hiring a service provider to perform some function or service for a specified cost with all sorts of financial contingencies built into the contract, more corporate users are opting for a results driven plan whereby the outsourced provider is incentivized to achieve certain milestones. The more time, money, productivity savings are realized, the more the service provider is compensated, often more than their standard arrangement. This is termed “vested outsourcing”. By aligning the success of both client and provider to the same objectives, there is more open communication, innovation and confidence to invest long-term in the relationship. There is also a shift toward hiring outsourced partners for their expertise and allowing them to do their job. The point was made; many organization make the mistake of outsourcing non-core functions and then turn around and tell the provider how to do their job. If this practice has the legs to become a standard practice, the quality of ALL service providers will improve and likewise weed out the companies trying to fill need but with little value to offer.
- Cybersecurity and terrorism continues to be on everyone’s mind and after sitting through a session on the risks, rightfully so! The damage one infected email can do to an organization is sobering, especially as it relates to commercial properties. As buildings are becoming increasingly automated, the risk for essential functional operations shut-down and tenant privacy breaches are very real. I was happy to hear the point reinforced that too many IT departments spend the majority of their time trying prevent security breaches than how to rapidly mitigate them once they occur.
- Data Standardization was another hot topic and desperately needed. If I seemed starry-eyed, naïve and utopian in my comments about vested outsourcing, this is where my more cynical side comes out. I’ve been hearing about this movement for twenty years and will rejoice when we as an industry can come to terms to standardizing data terminology and opening up the immense transparency and market efficiencies that will follow. The session was optimistic, I hope their right.
- I saw even more evidence of a continued shift to partnering between tech companies and corporate real estate organizations. This is tangible evidence of the vested outsourcing I mentioned earlier. Software and technology companies are being included more in the upfront and ongoing client discussions than simply supporting their tool for end users. This includes being expected to offer more CRE expertise and process ingenuity than simply providing adequate data fields and reports. The traditional way of licensing/subscribing/supporting software is joyfully over and gone. It also appears tech companies are more actively seeking symbiotic partnerships to expand their functional reach as opposed to building in-house.
- IWMS (integrated workplace management system) continues to be the direction the industry is going, which is a great thing. The primary issue to overcome is designing IWMS platforms that can integrate the near limitless point solutions (applications dedicated to one or few primary areas, i.e. lease administration, work order management or energy management) in a way that enables true control and intelligent analysis of big data.
- This is literally just a surface coverage of the topical programming that was conducted over the last few days. There were educational sessions on CRE business intelligence, finance, global trends, space utilization, employment issues, big data, analytics and decision making, and others I don’t remember. If commercial real estate is you career in any capacity, you should be at this conference.
Which brings me to my final point, our CRE industry is adapting, adopting and embracing technology at a very rapid pace relative to the past. Whereas it used to take years to convince real estate decision makers and organizations to try new tools, now the innovation is coming so fast it can be overwhelming even to the most seasoned IT professional. Very soon nearly every aspect of commercial properties will be connected, monitored, managed and analyzed via sensors, robotics, drones and software. Our industry is changing and it’s being led by many of the very people taking the time and making the investment to present and participate in conferences like this one. Big changes are happening, you should be aware of what’s coming and how to adapt to the innovations. Hope to see you at the next CoreNet conference!
