Commercial Real Estate Strategy Begins with People, Process, and Technology
Commercial real estate has been notoriously slow to adopt new technology compared to other industries; in some cases, firms may have to make up ground before accelerating into the future.
This was already the case prior to the spring of 2020. But since then – and since the COVID-19 pandemic upended lives around the world – the need for a comprehensive strategy to help provide clearer insight and better efficiency has only become more pronounced. Many firms literally will not survive without it.
But where do you begin to develop a strategy for your real estate firm? What are your goals? What are the components of that strategy? And what should you expect in terms of value?
The Goal of a Commercial Real Estate Strategy
Many of the pain points that commercial real estate firms have in common can be tied back to manual, high-touch processes. If headcount rises when assets under management increase – it likely points to a lack of automation. If reporting is a time-consuming chore, it could be because critical data is trapped in spreadsheets, scattered outside of a centralized system.
Typically, you will spend a third to half of a quarter putting together reporting that isn’t even accurate because of disorganized data. You may spend lots of time and effort to deliver something that is riddled with errors.
The goal of a comprehensive strategy is to establish repeatable processes for collecting, integrating, reporting, and analyzing your data. Then you can identify the tools you need to automate. Doing so will save time, eliminate inefficiencies, and positively impact your bottom line.
Where Do You Start?
At Saxony Partners, creating a strategy begins with a focus on the firm’s people, processes, and technology.
“Implementing technology for technology’s sake is just going to make things worse, faster,” said Derek Thornhill, Vice President of Real Estate at Saxony Partners. “It’s not going to solve your problem. Instead, you have to do the due diligence on the front end to understand what problems your employees are facing and what issues are presenting within their workflows. Then you can begin to devise a roadmap aimed at solving those issues.”
First, there’s an assessment. During this phase, consultants conduct focus group meetings and gather information on pain points employees are experiencing. Business processes and workflows are examined in detail. The current technology stack is assessed to identify opportunities for upgrades and optimization.
From there, business consultants collaborate with technology consultants and begin the strategy phase. Here, initiative-specific business cases are developed and prioritized. A high-level implementation plan is developed and reviewed with key stakeholders. It’s at this point that specific fixes for those pain points are introduced.
“We drive technology decisions toward centralizing your data,” Thornhill said. “In practical terms, that’s getting your data out of Excel and into a Yardi System.”
“Once your data is centralized in your Yardi system, then you can start to fix all the other components: your accounting system and business processes within the company. The integration is the key to eliminating errors and redundancies.”
Centralization leads to automation. All we want you to have to do is tap in and analyze your data after we have consolidated it for you. We eliminate the grunt work of pulling data down, consolidating it, and cleansing it by having all those rules as automated as possible. Once you are accessing your data from a singular, centralized point like Yardi, there are fewer chances for discrepancies to happen.
Finally, the roadmap is developed and implemented. Primarily, it is implemented with scalability in mind. Technology that is built for the present is out-of-date as soon as it is implemented. The key is to incorporate future state ideas and workflows into your current Yardi strategy to ensure that what’s devised can grow and evolve along with your business.
The Value of a Yardi Strategy
Now that you have a Yardi strategy, what should you expect to get out of it?
Operational Efficiencies: With a Yardi system implemented and automation employed, firms will be able to reduce the number of time employees spend on routine, repeatable tasks. This allows your staff to focus on activities that add value.
Clean Data: With a single source of truth in Yardi, gone are the risks associated with duplicate data collection processes and siloed data.
Reduced Risk: The likelihood of errors and associated costs due to a lack of understanding of your Yardi data are all but eliminated. Process-related risks – those associated with too few people knowing how to navigate your Yardi system – are reduced. Reputational risks – those associated with reporting incorrect information internally or externally, are eliminated.
Future Automation Opportunities Enabled: Effective Yardi strategy and data governance provide the foundation necessary for future Yardi add-on implementations. Getting a scalable, adaptable strategy in place will put your firm in a position to take advantage of the next Yardi upgrade.
“The real estate industry is becoming more sophisticated when it comes to data and technology,” Thornhill said. “We have more and more people entering the workforce who have never lacked instant access to data. Yardi is the future of commercial real estate – without a doubt. And now is the time to embrace it.”