With a fresh new year comes a fresh new perspective. 2016 yielded many newsworthy events and a handful of game-changing trends that are repainting the landscape of our industry.
Switch Automation CEO, Deb Noller, shares her forecast for the Top Five Emerging CRETech Megatrends and considers their implications for 2017 and beyond.
- The Rise of the Building Technology Evangelist (BTE): Professionals at all levels of building management are acknowledging the need to become more IT savvy. Millennial graduates are embracing technology in the workplace. Buildings themselves are becoming more connected to the internet. Frustrated with outdated systems and inefficient reporting methodologies, the BTE is an internal stakeholder who sees the value of implementing technological solutions to reduce costs and increase ROI. This person is an advocate for emerging technology and realizes it’s time to take advantage of this connectivity. What makes the BTE unique is his or her ability to affect change by understanding the budget, navigating the political landscape of traditional thinkers and implementing critical technological initiatives.
- Visionary executives are formatting change from the top down: Pressure is intensifying to operate large portfolios more efficiently and, as a result, the C-suite is more acutely focused on maximizing real estate performance than ever before. Leaders are fueling change by pushing traditional management teams to explore technological solutions to ROI challenges. These execs are spearheading evolution by replacing conventional management personnel with fewer but more tech savvy counterparts. The old-school facilities manager position is disappearing and in its place are a core group of BTE’s who drive customer service management and facilities maintenance through real time reporting and analytics. It’s the dawn of true proactivity, as the questions become “What did we prevent?” vs. “What did we solve?” and “How much did we save?” vs. “How much did we spend?”
- Systems will become part of the product and brand identity. Let’s examine the startup giant, WeWork. They invented a new class of real estate and attract a top-talent workforce to their customer-centric coworking spaces. By focusing on the client experience they are known as a brand who delivers superior service. How did they do it? They created a standardized experience of excellence across their portfolio. Now, other portfolio managers are beginning to follow suit.
- Emergence of centralized control & command. Traditional facilities managers who know the buildings and their individual systems are retiring out of the workforce, and their unique knowledge is leaving with them. A new, more technologically inclined workforce is rising through the ranks to take their place, and they are ready to helm a modern solution. Labor costs are rising and it’s no longer cost-effective to have an onsite FM in each building. The industry wants fewer people to manage, less overhead to incur, a slimmer margin of human error. The timing is ripe for change.
- Real estate operational data will become an asset. Companies are tired of paying vendors to gain access to their own building data. Historically, outsourced facility management groups hold the data, and the company must buy it back to analyze it, utilizing tools like Tableau and Power BI. Companies no longer want to be beholden to external service contractors to gain access to their own building data and they are demanding ownership of centralized real-time portfolio information.
Bonus Megatrend: Companies investing in the solution are already pulling ahead of competitors. In both Australian and American markets, those who made the front-end investment are ahead of the curve, and their savings over time will compound like interest. Forest City, Intel, Microsoft and AMP Capital are just a few trailblazers who intentionally set out on the path to scale savings across their entire portfolios. Consider your 401K. If you begin investing in a retirement fund at age 25 you’ll have a far greater ROI than starting at age 35 due to compounding returns.
The problem is worse than you imagine but it’s also easier and more economical to solve than you think. Motivation based on urgency is driving a revolution of change that’s catching on across the global market like wildfire. Once the CRE community fully realizes the implications of this technology, portfolios will be in a race against time to maximize ROI and reestablish a competitive edge. Those who don’t or can’t adapt quickly enough will fall behind, and the gap between success and failure will widen exponentially.