As we enter into the 4th quarter of 2017, we're reflecting on where we stand in CRE and what we can anticipate in 2018. Throughout this year we saw a shift in what end-users demand out of their CRE technology. This point in time we like to describe as the second-ish wave of CRE tech adoption. We're pretty much done with the education portion of why a commercial real estate company needs software. The market now has smarter buyers with clear expectation of what they want from technology. A slick marketing campaign with a great UX is not enough, customers are seeking solutions with defined use cases, they want products that integrate, and applications that deliver measurable ROI.
The Demand for Data Flow
The problem was that decision makers weren't looking at the global impact to the company, and in their defense, a couple years ago most software applications couldn't talk to each other.
One of our institutional customers, JP Morgan, recently shared with our CEO, Peter Boritz, that when they make decisions about technology they are requiring that data to "travel in the right direction". There needs to be a flow from one department to the next so that everyone has access to data pulled/shared from the sources. If employees are dialed-in to an isolated software product they might as well be digging in a file cabinet. It is not helping them do their job efficiently and leaves room for data gaps and inaccuracies.
Companies like JP Morgan are embracing the practice of using think tanks or committees to streamline decision making. These are groups composed of a mix of job functionalities so that decisions are made holistically. These groups focus on three key questions:
- Review what is being used internally - does it "work"?
- What available technology improves efficiency?
- How can different applications talk to each other to build a successful tech stack?
RXR is an example of a company that, several years ago, hired RDM for some parts of our platform. After using our software application RealAccess they realized they had overlap in products and they needed just one system of record. Over time they dropped some overlapping technology and embraced the full one-screen experience RDM platform's has to offer.
We still see companies making decisions at the building/region level, but we're encouraging our customers to look at their tech stack from the very top. This changes the length of our sales and onboarding cycle, but we believe it's better for our customer in the long run.
Global Outlook for Decision Making
The modern CRE industry did well for hundreds of years without the need for technology. Just a few years ago our sales force spent 80% of the sales process simply educating the CRE customer about why they need technology to do their job better. Early adapters made decisions about software at the department or, at best, regional level. When a property manager or broker saw a piece of interesting software they would bring it to their internal team and try it out. Some apps became an operational staple, others died soon after launch because they couldn't "talk" to the information being used throughout the rest of the company.
Today we see less and less of people saying "I don't get why we need this." and more "How are we going to embrace this? What else can it do? How can we make this work with XYZ?" Curiosity has increased and portfolios are looking to jump on things early and get ahead of the curve. Our customers like Brookfield are creating processes for staying informed, making connections and taking demos. Whatever their goals might be, CRE companies are taking more of a proactive approach. Some companies are making investments in CRE tech in order to have a voice in the future of a product.
RDM has been working in tandem with our most forward-thinking customers to roll out new features in our RealAccess application. Our focus is to deliver benefit-rich features that directly impact and improve our customers' pain points. Commercial real estate owners and managers seek tools that save time and provide value. Subscribers are choosing a more strategic path with the goal to streamline performance and deliver tangible value.
We attribute our success to our ethos of helping customers maximize their growth while paying back value 30-60 days after onboarding.
We look forward to the energized marketplace and partnerships we will be forging in the coming months. Our customers are always inspiring and we look forward to sharing our knowledge and experience.