Technology is (almost) always a good thing for an industry – it signifies growth, innovation, efficiency, capital investment, modernization, and much more. We roll our eyes at the buzzword "disruption," but if anticipated correctly, it is a radical way to create entirely new value for a market.
Every company is a tech company. Have you heard this idiom? Sweetgreen makes a mean salad but they aren't just a salad company. They are a tech company. Now, this isn't as intimidating as it sounds. Not every company needs to physically build and own their own technology offerings. No, what it really comes down to is: which companies find a way to embrace technology and which companies ignore technology altogether.
Now, timing plays a factor here too. There is something to be said for first-movers – proactive innovators who are known for moving the industry forward. And customer expectations are the essential driver of this concept – when digital disruption comes knocking, will users walk through your doors or move on to the next? Are you blazing the path or playing catch up?
For CRE professionals, the tech tipping point is here. Tenants have the same expectations for their workplace as they do for their personal life, the way they travel (think Airbnb and Uber), their favorite brands and retail stores, etc. And for most of the more progressive CRE leaders, they are already finalizing their proptech strategy to attract, engage, and retain tenants.
One of the major questions we get asked: what is the best approach to adopting technology that will positively impact both our top and bottom line? How do we go about devising a strategy that makes the best use of our time, effort, expertise, and capital? CRE professionals typically have little to no tech background so it makes sense that this is all very daunting. And the idea of wasting time, effort, expertise, and capital on technology that could quickly become outdated is downright scary.
The first decision owners and operators have to make is: should they build their own technology in-house? Or should they partner with a proptech platform? It's important to kick off this exercise by asking a few questions that will help dictate the strategy:
What technology is most important for you to implement this year?
Think ahead not only to what technology you wish your property had now, but to what you know you will need in 6-12 months time. You don't want to get too big in scope, but you also don't want to be too shortsighted, ensuring your tech will be outdated as soon as it's released.
What are your competitors doing and how are they implementing this technology?
Do a competitive analysis and consider the innovation that will set you apart. Playing catch up is almost always necessary, but playing innovator is a great way to be position yourself as a thought leader with TAMI (Technology, Advertising, Media, and Information) tenants and other advanced industries with expectations for proptech.
Does your current team possess any expertise in this area?
If you're looking to implement IoT solutions or an entirely new software platform for your building, who on your team has the capability to build or oversee the build of this tech.
How many people would you need to hire to build this technology?
If your team is made up mostly of CRE experts, rightfully so, you will need to speak to a tech expert about what will go into hiring someone who can then lead a tech team and manage this for your company. Any mistakes in executing and managing this process can cost you hundreds of thousands of dollars and months of your time.
How long will it take you to hire a team?
Can you afford the time that goes into putting a solid team in place that will deliver on the technology that matches your brand and reputation in the CRE industry? If you are even remotely playing catch up on tech with your competitors, take into consideration the extra time that will go into building your team.
How much will it cost to hire a team?
Once you take into account the team size needed to execute your technology strategy, work backwards to understand total costs: salaries, benefits, equity, etc.
What is your budget for this technology?
You need to consider the capital that is available to invest in technology that will make you competitive in your space. Once you have an idea of your budget, you can begin to have conversations and map out the best option to move forward as quickly as possible.
Who provides this technology and what does it cost?
If you're intimidated by the idea of hiring and building proptech inhouse, search for a tech provider that matches your expectations for benefits, costs, team makeup, and general work style.
Is the tech partner simply developing the tech on your behalf, or do they own the platform and technology?
If you opt to work with a development shop, you will be responsible for the work that goes into making the platform and/or mobile app tick. You will also beholden to their availability, deliverability timelines, and costs in order to make updates and improvements over time.
Do you have the internal resources to keep the product up to date?
Not only does the technology itself need constant and consistent refreshes to stay current, but the information within the app is equally as important to keep updated. For instance, with tenant engagement software, your property manager, asset manager, community builder, etc. should be constantly creating content that builds community, procuring the best and new amenities, and sharing information about the building and events. This is more than a full time job but is critical to drive engagement with tenants using the app.
If you're interested in leveraging tenant engagement software this year, but are still on the fence as to whether to build it internally or work with a partner like HqO, please refer to this quick cheat sheet.
If you are still unsure where you land on this debate, give us 20 minutes to give you a demo of our software and the process we take to transform your property into a place where tenants love to work.