IMS recently hosted a webinar on the topic of best practices for building a CRE tech stack to unlock back-office efficiencies. The webinar featured Kristen Thomasino, VP of Real Estate Solutions Group at AvidXchange, and Ron Rossi, VP of Business Development at IMS, who discussed which tools and technologies are essential for the 21st-century CRE professional, how to leverage technology to drive back-office efficiencies, and best practice criteria to evaluate tech vendors.
What Tools Are 21st-Century CRE Professionals Using?
According to Bisnow, “Commercial real estate is falling behind on investing in tech and data analytics, and it’s creating potential roadblocks to effective asset management, decision-making, and deal flow.” While many CRE firms leverage property management tools, accounting software, and email applications, there are still many opportunities for firms to automate workflows and manual processes. Some of the risks associated with an incomplete tech stack, for both sponsors and investors, include the following:
- Weak data security
- Misuse of human capital
- Creation of data silos
- Decreased back-office efficiency
- Risk of personal information breach
- Limited data accessibility
These risks and inefficiencies can make it difficult to scale the firm and to build trust and transparency with investors. Further, 1 in 3 CRE firms has experienced a cybersecurity incident due to lack of a complete and comprehensive tech stack.
Purpose-Built vs All-Purpose Solutions
When building out a tech stack, it may be tempting to implement an all-purpose solution, but the one-size-fits-all approach often requires customization to make the technology relevant to the CRE industry and its specific challenges that need to be addressed. They also typically have the added complexity of unnecessary features that don’t support the firm’s needs. Industry-specific solutions, on the other hand, are developed explicitly to address the needs, challenges, complexities, and priorities of the CRE industry, making them more relevant and valuable.
Building the Tech Stack
Ron and Kristen explained how both IMS and AvidExchange leverage automation to revolutionize processes and how a CRE tech stack is a recession-proof means of driving efficiencies because these technologies provide value regardless of the state of the market. Leveraging technology allows firms to remain competitive, relevant, and nimble.
Build, Buy, or Partner?
Building an in-house technology project can be problematic. Fifty-two-percent of these types of projects will either go over time, go over budget, or sacrifice functionality. Ron and Kristin emphasized the value of partnership as the best approach to tech adoption. Kristin shared,
“A good organization will take you through an evaluation, and they’re not going to rush you; they’re going to want to understand what’s important to your business, and then they’re going to want to be able to say, ‘Here’s the value that we can get from being partners’.” Ron drove this point home, saying, “Partnering with firms like ours to bring that technology to bear is certainly what we have found to be the best approach.”
The key considerations for evaluating potential partners center around a comprehensive, best-fit philosophy. Companies with a background in CRE are more likely to understand the needs and pain points of your firm. Further, a vendor that has a dedicated team to assist with data migration can streamline the onboarding process and reduce implementation time. Other best practice considerations include pricing, customer base, data security, and product downtime. Weighing these factors will help guide decision-making that results in a strong partnerships and long-term value.
Technology as an Opportunity
It’s easy to think of technology as a cost, but the speakers urged listeners to view tech as an opportunity. According to Altus Group, firms that embrace integrated technology solutions are better positioned to streamline their processes, gain better intelligence from their data, and transact faster with investors. Partnering with a tech provider drives lasting value and aids in scalability, making it a smart strategy and a must-have as investors come to expect real-time data access.
To learn more about unlocking back-office efficiencies, watch the on-demand webinar!