What “at scale” really means in tech adoption
Summary
Some technology lends itself to being rolled out across an entire portfolio. Leasing and asset management platforms like VTS, BI solutions like NavigatorCRE, and data companies like Cherre are good examples.?
The value of these platforms lie in their ability to aggregate large amounts of data from multiple sources. None of them would work in just a few buildings; it’s “at scale” or bust.
The messy world of operations
But there’s another end of this spectrum. Technologies focused on on-site workflows can actually deliver value and serve the needs of the personnel in just one building.
That’s why technology designed for property managers and engineers has been adopted on an ad hoc basis by individual building or regional teams.
At scale however, this becomes unwieldy for asset managers and ownership. With so many different systems, it’s impossible to aggregate data to gain transparency and make better decisions.
If it ain’t broke?
The thing is, up until recently, it didn’t matter.
As long as the work got done, the details of how it was being done on site wasn’t important.?
Increasingly however, commercial real estate portfolios are feeling the pressure to aggregate and utilize the data trapped in these siloed systems.
Part of that pressure is financial. The vast majority of respondents (90 percent) in a recent survey saw an increase in their expenses with an estimated mean increase of 9.1 percent, largely due to labor costs.
That quickly leads portfolio managers to want to know what’s happening in their building, what the protocols are and how equipment is operating. They want to know what the plan is to reduce energy and maintenance costs, and whether those are being followed.
But it’s not just financial pressure. The world has changed. Tenants have become significantly more savvy in a post-COVID-19 world, often hiring consultants to review HVAC systems, documentation and maintenance plans.
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Investors too now want to see ever-increasingly granular details about the operational performance of the portfolios they back.
To do any of this, there needs to be transparency at the portfolio level and the data has to be broad, spanning multiple aspects and areas of operations.
Transparency requires standardization
It no longer makes sense to use the same tools that on-site teams have gotten used to if those solutions don’t support portfolio-level management.
At the same time, a rush to add new solutions that focus on portfolio-level reporting won’t drive action at the property level.
“At scale” when talking about operations requires both - powerful tools for operators that have been re-thought with a modern lens as well as aggregated data for the portfolio that makes any information easily accessible.
Doing so isn’t easy.
The concept is new to commercial real estate and the technologies available, as well as their approaches to achieving portfolio scale are varying and confusing.
Blueprints to success
Like any tangled mess, the problem looks incredibly daunting at first.
Pull one piece out and you have to think about all the downstream processes and connected systems that get affected. Doing that when there are dozens of vendors, competing business priorities and strong personalities is enough to have stopped many portfolios in their tracks.
But there are blueprints to success.
We’ve witnessed it first hand. Portfolios have consolidated their systems and gained a level of transparency they’ve never had before, while meaningfully reducing their operating expenses.
But the path is not one-size fits all. In fact, we’ve seen four distinct strategies play out successfully.
We broke each of those out in our newest white paper.?