In the previous blog post, we identified company profiles and defined issues that best represent when it’s the right time for a mid-sized company to automate CRE workflow to manage their real estate portfolios, and how with all of the technologies in the industry, what works for one company may not work best for another. Transitioning into this new technological world impacts each company differently, and it’s essential for leadership to carefully determine what technology will best match their current and future strategies.
To compare the degree of change each type of company faces, consider this analogy; Christopher Columbus sends two expeditions to the New World. The first had a ship powered by rowers, the second powered by sails made of materials of the day. On their last stop before hitting the wide seas, both were given the option to switch to wind power solely to propel the ships. This will reduce travel time and associated costs, but each vessel must retool with sails made of nylon.
The ship that began utilizing wind power simply changed out the sails and continued the course. The ship that began with rowers had to buy wood and tools and train the rowers how to build masts, thus stopping progress of the mission, less normal drift. Once the masts were constructed and the sails were raised, now two-thirds of the original rowers are idle with nothing to do and the captain is concerned because there isn’t enough rations due to the purchase of the new sails and materials. Talk of leaving men behind begins (much like a company’s reduction in force) and unrest is brewing among the deck hands. Meanwhile, back on the second ship, the captain did not have to reallocate for labor, investment was minimal, downtime slim, and the mission continued without incident.
This is of course an overly simplified story to illustrate the varied degree of change these companies could face. One thing is clear though, managing a real estate portfolio through spreadsheets is not sufficient for companies who recognize the importance of their real estate. So, what are the questions leadership should be asking?
According to Anthony Nazarro at NOI Strategies, leadership should be initially looking at the business operations to identify improvement areas. “I would start by looking at operations and financials. The business first, as opposed to technology. Then I look at how technology supports those processes. Corporate leadership should look at the way they use real estate and demonstrate how it’s connected effects their people and their profitability. Unfortunately, many of these companies don’t have the time to really take a step back, prioritize, and develop a strategy on the management of their real estate.”
As any therapist will advise, one must first face the problem before it can be overcome. The second step is to get help, and this same principle applies to corporate real estate. Don’t go it alone, there is simply too much at stake and an overwhelming selection of technology solutions available.
The best advice is to identify and engage a consultant who is familiar with real estate processes and corresponding technologies. One excellent way of locating prospective consultants who have a proven track-record of success and are within budget is to source information from industry peers. A few emails, phone calls, and messages via LinkedIn to other CRE executives will prove priceless relative to the intelligence you will gain.
Another great source of information can be gleaned by attending CRE technology conferences such as Realcomm, Corenet, and CoreTech. These conferences are exactly where the thought leaders congregate to share ideas and experiences.
Corporate leadership should consider:
- If our real estate encapsulates our operations and should be the “vessel” of our mission, how aligned is it with our strategy and image? Are we utilizing space effectively? Are we considering any acquisitions? Is our real estate located in areas that advance sales, recruiting, new markets?
- To what degree are the people who choose our locations involved in the process of shaping corporate strategy decisions?
- Does our real estate team have access to the information they need to ensure their direction is in line with our mission?
- Management is routinely asking for projections on expenses and other obligations. Why aren’t the rents, CAMs, utilities, parking, and other financial elements directly integrated with accounting and finance?
- If we decide to utilize technology to improve our processes and increase communication, what tools to do we need? Outsource versus in-house? What are the key indicators we should use to measure tangible improvement?
- Where do we find the experts we can afford to help direct us?
Once these questions have been answered and leadership has determined the time is right to implement a CRE technology solution, the final question then looms. Out of all the CRE technologies available in the industry, which one is right for the company?
We’ll cover tips for uncovering answers to that question in our next blog post, the final one in this three-part series about CRE technologies for mid-sized companies.