CRE Software: Challenges
Resistance to change, the lack of time and other resources to properly evaluate alternatives, and the lack of success metrics are three challenges that real estate companies are facing with respect to the adoption of commercial real estate (CRE) software.
Resistance to Change
- This challenge pertains to the refusal or hesitation of some employees to engage with new software. Some employees of CRE companies resist the adoption of new software because they are afraid that the technology will make their jobs obsolete. They fear that the software will replace them and they will eventually lose their jobs.
- It is also possible that some employees do not see or understand how the new software can help them in their jobs. They fail to see any personal benefit, so they are not motivated in any way to use the software.
- Shelley Cernel, writing for Investor Management Services, an investor management platform provider that operates in the CRE industry, identifies resistance to change as one of the challenges that CRE companies face when implementing new technology. Cernel is the marketing director at RealPage, the real estate software provider that recently acquired Investor Management Services.
- Cernel, who is most likely speaking from experience, says that the solution to this challenge is the clear and proper communication of the inefficiencies the new software is designed to address. From her experience, the clearer the communication, the higher the chance of success. It is also beneficial for companies to have internal champions who can encourage their colleagues to use the software.
- Apto, a company that offers customer relationship management (CRM) software for CRE brokers, have the same recommendations. It appears that from its experience with CRE brokerages, stakeholder buy-in, executive sponsorship, communication, training, and the identification of internal champions are effective ways of improving CRE software adoption.
- When leading CRE firm CBRE implemented its groundbreaking application Dimension, it handpicked a champion or leader to spearhead the adoption of the application. Mahan Thomas, the chosen champion, worked first with the most progressive brokers in the firm. When other brokers saw how this first batch of users were winning business with the software, the rate of adoption grew.
Lack of Time and Other Resources to Properly Evaluate Alternatives
- Thirty-one percent of CRE professionals cite the lack of time and other resources as the biggest obstacle to replacing less effective software or solutions. Employees at CRE firms, like other employees, have busy schedules that would be disrupted if they are tasked with the additional burden of evaluating alternative software.
- CRE companies are often overbooked or overwhelmed by other tasks, and the sourcing and vetting of various CRE technologies are not something they can easily handle.
- CRE companies appear to remedy this by creating a whole new unit for this sole purpose or by hiring the services of a third party. For example, Cushman & Wakefield, a CRE brokerage, has enlisted the help of MetaProp NYC in evaluating and adopting new software or technology. MetaProp NYC, which offers advisory services for real estate firms, has a startup accelerator that deals purely with real estate technologies.
- JLL, another CRE brokerage, recently launched a new unit called Spark, a new division dedicated to the incubation and development of CRE technologies, and the selection of CRE technologies that the company can invest in.
Lack of Success Metrics
- Some CRE companies are having difficulties with software adoption because they could not successfully demonstrate or prove the effectiveness of the software. The return on investment is not clear because they have not established benchmarks or metrics by which success can be measured.
- Cernel, the director of marketing at real estate software provider RealPage, identifies the identification of success metrics as one of the challenges that CRE companies face when implementing new technology.
- She recommends the immediate determination of success metrics since based on her experience, success metrics drive software adoption and accountability.
- Bridge Commercial Real Estate, an office operating company, used a number of metrics to assess the success of its partnership with software provider VTS. Among these success metrics are the reduction in deal cycle time, the reduction in deal approval time, and the time saved from the elimination of manual processes.
- The company availed VTS’s platform because it has inefficient leasing and approval processes and it wastes a lot of time on report generation.