Digital Definition

Transformative CRE Tech

By Joel Nelson on Jan 23, 2018 in Technology

What does “digital transformation” mean to commercial property management beyond a catchphrase? Six thought leaders including Alex Stanton, Yardi’s commercial industry principal, provided clarity on the subject in a recent Realcomm-hosted webinar.

Digital transformation extends technology beyond acquiring and managing property.  It’s driven by business factors such as profitability, occupant satisfaction and productivity along with new technologies including the cloud, data analytics and the Internet of Things. Digital transformation is “a strategy lever to achieve broader business agendas and create new levels of value,” according to panelist Marc Petock, chief communications officer and vice president of marketing for IoT technology builder Lynxspring.

Digital transformation aggregates business, operations and IT practices into a common platform for people, processes, best practices and services, Petock said, with new technology embraced not for its own sake but to change thought and organizational culture.

Executed properly, digital transformation can foster better resource planning, empowerment, technology collaboration and risk mitigation. With heating, ventilation and air conditioning equipment comprising a major expense, for example, commercial building owners and operators are incentivized to adopt intelligent building technology that provides new insight into operations and equipment performance.

Commercial real estate has traditionally been slow to adopt transformative technology; when the panelists were asked how much of the industry understands digital transformation, no estimate exceeded 30 percent. But that’s changing in the face of pressures for profits, high sustainability expectations and consumers’ technology sophistication.

“Technology used to mean ‘support’; now it’s at the forefront of driving revenue and services,” said Sandy Jacolow, chief information officer for real estate developer, investor and manager Silverstein Properties. “It has shifted how we do business.  For example, mobile capability is no longer a luxury; tenants say ‘Is there an app for that?’  A poor interface or customer experience will doom the brightest ideas.”

As technology expands into every aspect of managing and using commercial property, Stanton said, “the very notion of a lease is changing. It’s morphing into what brokers are offering and the concept of space, with leases and amenities increasingly blending together,” he said.  “Consumers want the same online and mobile convenience in their retail experience that they have in other aspects of their lives, and Yardi works with our clients to drive that.”

“Retail” in the context of digital transformation means not only the sales space and customer experience, but also the information captured in the leasing process, such as foot traffic, space utilization, building environmental control, purchasing patterns and other activities, Stanton noted.

And whereas 10- or 15-year leases were the traditional standard, the trend toward co-working and space-sharing could produce hours- or minutes-long leases.  “That’s a big push for our clients,” he said, citing Yardi’s acquisition of WUN Systems, a workspace management platform provider, as a step toward meeting that demand.

While tolerance of initial failure during the transition to new technology is healthy, leveraging technology partners such as Yardi can pass that phase quickly, Stanton added.

Dave Clute, vice president/practice lead—intelligent building practice for engineering design firm Environmental Systems Design, stressed the importance of commonality. “Data standards are so critical to digital transformation.  When you’re trying to change things but don’t have a consistent language and can’t communicate with your stakeholders in a common, consistent way, it’s not going to work,” he said.

Bob Rybak of Morguard discussed his role as a change agent in modernizing the Canadian real estate company’s technology platform to lower costs and bring accountability to the user level. Morguard moved its residential, commercial and investment management holdings to Yardi Voyager 7S, a mobile-enabled Software as a Service platform.

The panelists agreed that digital transformation, still in its infancy in commercial real estate, will accelerate in response to environmental, stakeholder and customer demands.  “Commercial real estate is in an operational revolution, with market forces adding new demands on building operators and managers,” said Scott Sidman, chief marketing and strategy officer for software provider Building Engines. “The process begins with accepting that digital transformation is about change and that change is hard. Admit that, then get people to commit and help them understand that technology is an enabler to free them to do what they do best, which is building great relationships with their customers and the people they serve.”

Yardi is a sponsor of Realcomm’s webinar series.