Why we are so slow to adopt tech change in #CRE!
A recent report from the Altus Group gives some insight into the current situation. It surveyed more than 300 international CRE executives and made some findings that illustrate how our industry is lagging in technology adoption.
The study found that nearly 1/3 of the CRE industry worldwide is still primarily using spreadsheets for asset and portfolio management. This represents up to $11 trillion in assets, being managed manually – a stunning figure, when you consider the increased risk of human error and resulting inaccuracies this method involves.1/3 of the CRE industry worldwide is still primarily using spreadsheets. Click To Tweet
While the rest of the industry does employ digital tools for managing portfolios and properties, the study found that ¾ of those users did so in “data silos.” Storing data in separate, unconnected applications may be an improvement over spreadsheets, but it costs precious time by requiring that data be aggregated from multiple (sometimes incompatible) sources before it’s useful. It fails to unlock the real potential of technology for CRE.
A final important point from the Altus report relates to the relative amount the CRE industry spends on technology compared to other industries. It’s low. Taking the relative size of each industry into account, CRE firms worldwide spend, as a percentage of revenue, approximately 50% less than Financial Services and the Public Sector (including Healthcare).
While the industry appears to be coming around somewhat, several factors, including cost, cause tech adoption to be slow and uneven. There are several key reasons for this; some unique to the CRE industry.
Size and Scope of CRE
The America commercial real estate market is roughly the size of the U.S. stock market, with a value estimated at more than $15 trillion. It includes a vast array of property types and is profoundly impacted by economic trends, demographics, legislation, and different tax laws. It involves brokers, investors, developers, vendors, accountants, attorneys, architects, contractors, construction companies, management firms, and many other players. Each segment of the industry has different technology needs, and the process of developing specifically tailored applications is a long one.Commercial real estate market is roughly the size of the U.S. stock market, with a value estimated at more than $15 trillion. Click To Tweet
Variety of Tools
Along with the time it takes to develop the right tools comes the time it takes to select the right tools. There are a staggering number of technology solutions for CRE already available. Many professionals hesitate to dive into the process of selecting technology to try, simply because they are overwhelmed by the options.
Having technology tools that can’t be used together can significantly hamper the timely data-driven decision-making and reporting transparency that investors are increasingly demanding. Users can sometimes be discouraged from adopting new technology because they are unsure about how well it will integrate with what they’re already using. Concerns about data transfer and other details are obstacles to tech adoption.
Many in the industry hold the belief that accurate and current data can’t be obtained through CRE platforms. This goes back to the problem of information siloes, which do make up to date information less accessible. The process of aggregating data from multiple sources is slow, so top-level data used to make strategic investment decisions is often not timely. In fact this is a problem we see very often, that is why we decided to take it upon ourselves to fix.
Many hesitate to adopt technology solutions because they expect it to be costly. As many are coming to understand, the cost for operating without the advantages provided by these tools is much greater. Technology can be gradually integrated and result in immediate improvements in performance.
So you’re convinced, right? How do you get your office to see the wisdom of updating the way they do business? Here are some suggestions for encouraging your colleagues to adopt the technologies that will serve them best.
Focus on the why, not the how. Help them to understand the reasons that technology for CRE is a good idea. Point out redundancies that can be eliminated. Stress the streamlining of routine tasks and the increased access to relevant and timely data.
Suggest starting small. The office doesn’t have to undergo a complete revolution. As new solutions are considered, it can be very cost-effective to pay for software as you use it, and take advantage of cloud-based applications that don’t require any specific hardware, installation, or updates.
Make training a part of the plan. Without it, new solutions will likely go unused by most. Timely instruction and support makes success much more likely. APTO CRM recently had a guest blog that provided a great write up as well as an easy to read and refer infographic
Use all-in-one products for seamless functionality. Products that provide coordinated solutions can be tailored to meet your needs, and features added as your use and expertise increases. The combined power of several applications is greater than the sum of the parts.
If you want to dip your toe into technology for CRE waters, we have cultivated a partnership with select companies to offer their employees a free personalized news feed and visualization tool. Click the big button below to see if your company is one of our preferred partners and start your free REscour account today.
Image Courtesy of “Turtle” by Danilo Rizzuti FreeDigitalPhotos.net