Takeaways from EY’s report on technology adoption and implementation in CRE space

We have always been reinforcing a fact that an ad-hoc technology investment particularly on O&M wouldn’t solve the strategic problems. In fact, it will only create the next one. A long-term strategy that aligns O&M’s tech stack with the company’s broader digital transformation goals will have to set in place.

Recently, EY came up with a survey report in collaboration with CRETech, the survey is about the leading decision-makers in Commercial real estate space including technology providers to facility management firms.

Interestingly, the survey report focus on two critical aspects - Disconnect between the technology provider and a real estate owner and between an owner and a tenant, mind that this is how any CRE technology has to navigate to reach the end-users or facility occupants. Naturally, it has to go through multiple tests in between its ideation to final employment.   

Automation to leveraging data

Tech Implementation can be divided into small parts of the transformational journey, which can touch upon cultural, behavioral and capacity building aspects of the firm. Forward-thinking facility management firms have realized that they need to automate certain processes to eliminate manual errors and provide a seamless experience to tenants, hence there come smart visitor management, workspace management applications.

According to the survey, 69% of respondents are ging high priority to Technology as a strategic agenda for the future, while 61% of them have already adopted one or more technology tools (although the adopted tools are in an early stage of their development)

These facility management firms also need to leverage their internal and external data (asset to work orders, financial to sustainability-related) to make better investment and operating decisions. Explore new revenue streams to diversify their business. This is particularly true when other tech giants are already making moves in the smart building management industry.

Reasons for the low adoption rate?

Things have been working out well for property owners as well as facility management firms as there were no external or survival pressure to reduce operations cost or maintain sustainability standers as they are experiencing now. 

The report also pointed out various reasons why the tech adoption is limited to management and system automation tools and marching slowly. Cost and ROI are still the main drivers for any system implementation. 

Second, comes the required skillsets to work with such tools, both technical and change management. 53% of the survey respondents recognize that they do not have the required tech talent. 

Applications need to find out ways to make Operations and maintenance staff feel secure and comfortable around them. 

Three approaches to long term tech strategy

The report also builds upon the survey responses to come up with strategies to increase the rate of successful tech implementation. I know you might recall one of our popular blog series on planning and implementing asset performance analytics trials which share similar strategic suggestions.  

1. Develop a technology strategy:

“We had lots of false starts before we finally got onto the right path of implementing technology the right way in our business,” said an Australian REIT.

A facility management firm’s technology strategy must align its tech architecture with the digital transformation strategy. The ideal strategy should also focus on Improving integration, interoperability and interdependency among various business processes. And most importantly should provide flexibility for the faster rollout of new technology. It shouldn’t take a long time to decide on risk/benefits equations while testing new applications to optimize asset performance management.

2. Build Tech Implementation strategy:

According to the survey, 58% of respondents say new systems do not integrate easily with their existing tech architecture. Pointing out the need to change their IT or business process to implement new technology.

It’s a known fact that the smart building management industry lacks fully integrated horizontal and vertically developed solutions that perform asset management to workflow automation to workspace management tasks on a single platform. It’s both a good and a bad thing as it provided endless customization choices to the end users it also increases integration complexities.  

Well planned implementation strategy can help FM teams test out new tools periodically and set up high evaluation standards.

3. Develop a sourcing plan:

Building a required solution or buying from a tech vendor can be a difficult decision, for trial purposes this shouldn’t be a big concern but for scaling it to multiple sites then the decision should be based on certain factors. It could be a strategic or functional move to source it from 3rd part so accordingly cost and ROI should be evaluated.   We have elaborated this decision-making process in one of our earlier blogs Build vs buy - where to start? 

The report also highlighted the change that now technology providers and real estate owners working together to create products that have the potential to be commercialized. There are multiple startup incubators run by FM firms such as CBRE India’s Proptech challenge, Aldar properties (UAE) scale-up program, or JLL’s IDEAs initiative. These programs evaluate and co-develop GTM ready software products/IP solutions.

Besides these three strategies change and transformation management is also difficult areas many FM firms need to work upon. Attracting and Upskilling the existing talent pool should be a priority as firms are facing a scarcity of quality talent from mid to top-level management. 

So which of these strategies are most relevant to your team? Let us know your experience with adopting aa new tech applications.