Take a moment and take stock of your own devices. How many systems are you logged into right now?
Depending on your role in real estate, you’re likely using some combination of Excel, ArcGIS, Yardi/MRI/Sage, Procore, email, a task manager, Slack, Costar, ARGUS, Word, Realpage, Entrata, Powerpoint, Plangrid and/or your local jurisdictions’ zoning tools. All of these are open at once—and they’re just the programs on your computer. Now look at everything that’s open on your phone. Feeling stressed yet?
The average business already uses 16 SaaS applications. That means if you want to get a full status update on the scope of your business, you will have to log into 16 different systems to compile what you need, and it certainly won’t output into one neat, organized document.
Just think of everything real estate developers must do to process a change order or submit a draw. Both are complicated and require many systems and many hours to get done.
The price tag of a new system isn’t the only cost to your business. When you’re deciding whether to invest in new technology, you also need to take into account all the different types of “costs.” Like the learning curve cost. How long will it take your team to get up and running? That’s time away from other work, which can slow down processing payments and getting new projects started. Or the psychological cost. It’s been proven that we can only manage two tasks at once and while multitasking may seem efficient, it often takes more time (up to 40 percent of someone’s productive time) and can result in more error-prone work.
There is also the maintenance cost. A newly implemented system will need to be regularly updated, de-bugged, and troubleshot. Don’t underestimate how long it can take your team (or an outside consultant) to keep this system running smoothly. This included the information management cost: How well does the new system play with everything else you have in place? Information in one system often needs to be in three other places, which can result in an employee spending several hours each week transferring and translating information from one system to another.
Even worse, this doesn’t take into account the additional headache for sharing information outside of your organization. You have to resort to middle systems (think: email, Dropbox) just to share static pdf’s and spreadsheets with one another. And the process repeats, over and over again. With all of these costs, could you imagine adding one more system to that process?
Despite the challenge of adding more technology, I believe there’s a better option than this cluttered status quo.
I’m making the case for adding a 17th system—but only one that truly pulls its weight—and I know there are others who share this mindset. When my company Rabbet recently surveyed commercial real estate lenders and developers, we found that 71 percent of lenders agree that certain aspects of the “draw” process can be automated and 67 percent of developers think automation should expedite the process.
That tells us that there’s clearly an appetite for a solution that automates existing processes and consolidates information. So in implementing the 17th system, I believe you should only take it on if it brings connectivity and consolidation to your existing network and processes.
When you’re evaluating a new system, here’s what needs to be true for you to move forward:
The benefit of using the 17th system will outweigh the burden of taking it on
The original reason for adding the system—the singular problem you are trying to solve—should be painful and compelling. This is simple ROI math: the problem you are solving should be more costly to the organization than the all-in cost of the solution. Marginal improvements won’t cut it.
Take the change order process. It’s complicated, has multiple stages, and errors could cost your business cold hard cash. If you could implement a system to help you better track and understand fluctuating costs on a construction project, that would be a worthwhile system to take on.
Alternatively, consider the value that robust on-demand reporting would bring to your relationship with your investors and lenders. Not only will it save you time, but it will also help you build credibility with the parties you’re working with.
It won’t feel like an extra burden if it makes a meaningful difference.
The 17th system connects multiple people/parties in and outside your organization
Remember the middle systems I mentioned, like email and Dropbox, that serve to transfer static information? The 17th system should minimize these and facilitate real-time communication. Adding another system that relies on middle systems only exacerbates the problem of outdated information and poor communication.
Every real estate developer or property owner knows the impact of a site visit. Without a doubt, real-time communication and feedback create momentum and accountability. Technology should facilitate collaboration, not build walls to hide behind.
For example, wouldn’t it be great if developers and lenders could easily note and communicate about items missing from a draw submission, all in one place? A new system should bring the value of an actionable in-person meeting to the digital space.
The 17th system “plays nice” with your other systems
The most important factor is determining whether the new system integrates with your existing systems. Ideally, the new system should centralize your information and give you a single access point to find everything you need.
Think of connected buildings, loaded with smart building technology. Here we see office and conference room temperatures adjusting to match both occupancy levels and user preferences, as well as overhead lights brightening and dimming according to sunlight presence. This is all effortlessly managed within one system.
For property managers, this might be a platform that integrates with your existing systems so that you have a central view of your accounting, marketing, applicant screening, online rent payments, lease agreements, and upcoming work orders. A system like that could improve your operational efficiency and help you make more informed decisions.
As the commercial real estate industry becomes even more complex and fast-moving, you want to make sure that your team isn’t maxed out. Developers are required to make decisions quickly—so the best thing you can do for your business is to employ a solution that solves a real problem, facilitates communication, and consolidates information. When it comes to the 17th system, connectivity is the new currency.