The impact of Covid-19 has brought into sharp focus the need for businesses to accelerate their digital strategies.
But with budgets being tightened and uncertainty around what the ‘next normal’ is going look like, how can property owners, investors and occupiers get the most of out of investments in technology?
Futureproof the investment
A key benefit of technology is its ability to help businesses become more agile. When procuring a new technology solution, it is important to consider how that technology will be impacted by future changes.
The recent pandemic has demonstrated that it is difficult to know what changes are around the corner but there are some future changes which are easier to anticipate and which should always be considered:
- Does the technology need to integrate with, or work alongside, existing systems? What will happen if those systems change?
- Is the technology scalable in the event of future expansion? Can reductions be made if demand is reduced?
- Where technology relates to a particular building, can the technology be moved if the tech purchaser decides to relocate? Will the technology contract need to be transferred to the new tenant or owner of that building?
- If the technology involves a capex investment, how many years will the technology need to be used in order to realise the benefit of that investment?
Have a clear strategic focus
All too often customers report dissatisfaction with tech solutions when in fact the solution itself operates correctly but the functionality does not align with the customer’s expectations of the product.
For example, a solution which draws together data on energy use across a portfolio may deliver on this promise, but providing the raw statistics on Kilowatt usage to front line teams, who have to then interpret and apply them, may be not be practical. Any strategic focus needs to have one eye constantly on how those operating the technology will use it. Companies procuring tech need to ensure technology companies understand the strategic focus of the procurement at the outset.
How can this be achieved? One way to ensure that tech procurers and developers have an aligned strategic focus is via joint ventures and other collaborations. Consider for example, the use of augmented reality and artificial intelligence as a means to guide prospective occupiers and investors to the right properties from the comfort of their own home. These technologies have the potential to significantly reduce voids and improve end-user experience, and big-name players have flooded the market in recent years.
The Coronavirus pandemic has also expedited the use of these technologies – one of the global frontrunners in VR tech, Matterport, partnered with virtual reality staging expert VRPM in March last year for example. This signifies that activity in the market is now at an all-time high and it is a better time than ever for developers to collaborate with tech providers.
To avoid the gimmick factor, those investing in technology need to be clear when they are needed and what problems they are addressing. Bridging this gap between what is possible and what is practical, in partnership with those building and developing the tech, is crucial to ensure it can be actual solutions to real problems.
Don’t let potential risks be a blocker
No tech procurement project is risk-free and there are plenty of examples of high-profile projects which have failed. The VP of Scout RFP, one of the top procurement solutions companies, recently suggested that up to 90% of procurement system rollouts end in failure, a staggeringly high number.
The tangible nature of property lends itself to a quest by some would-be-adopters for ‘end-to-end’ solutions to wrap snuggly around the whole property lifecycle. This search for a complete solution, must be weighed against the gains to be made in the shorter term by focusing on technology that improves an individual aspect of the lifecycle. For example, snap shot monitoring of contract data may not be a fully consumer facing solution to managing a portfolio, but it can reduce the risk of missing contractual milestones such as break notices and term expiries. This frees up teams to invest more time in providing a personal and responsive service to customers.
Many potential risks can be mitigated with proper due diligence and planning. Having a well drafted contract which addresses the following issues can help avoid wasted time and cost:
- Anticipate change – Identify in advance areas such as build delays, scope change and input from tenants and agree contractually in advance how those changes will be handled.
- Alternative dispute resolution – many disputes arise out of misunderstandings or miscommunications between contracting parties and are capable of resolution via an informal discussion. Include a dispute escalation clause in the contract to encourage early negotiations in the event of a dispute.
- Exit strategies – Where disputes cannot be resolved, it is important to have a clear exit strategy. The contract should contain robust termination and transition provisions to enable withdrawal from the project with limited financial and practical consequences for the parties.
Create buy in
Technology is a means to an end, not the end itself. It can deliver when it is applied in the right way. End users are often not part of the procurement process and they may therefore need support and training to understand why and how they should adopt new tech solutions. It is human nature to default to a tried-and-tested path in the absence of compelling reasons for change.
Necessity does however, breed innovation and invention. At a time when flexibility has become central to how we work and live, we are making the best of the technology we and we should capitalise on our wins, no matter how small. Any new process requires some behavioural change and the most successful projects are those which involve close connections between building users, those making strategic decisions and those developing the technology.
The property industry is in a unique position to offer insights on the application of the wealth of ‘big data’ it owns and manages. Those procuring and using technology sit in an exciting place with the potential to help bridge the gap between the possible and the practical, that will further transform the part technology plays in all our futures.
Source: PropertyWire
