Digital Transformation Guide for Commercial Real Estate Businesses

Digital transformation is no longer optional for commercial real estate (CRE) businesses.

It is not a luxury; it's a must for CRE companies to remain competitive, provide excellent customer service, streamline operations, and meet the growing expectations of clients and other stakeholders.

CREs are becoming proactive and prepared for technological advances to take advantage of new trends and opportunities in the industry. There are several reasons for this.

Why are CREs increasingly focusing on digital transformation initiatives?

There are several reasons why CREs are undertaking digital transformation initiatives.

Some common motivations include:

• Increased competition: With the commercial real estate industry becoming increasingly competitive, companies are motivated to their competitive position in the market using new technology and data-driven decision-making.
• Changing customer expectations: Today's customers expect a high level of convenience, personalization, and transparency in their interactions with businesses. CREs are motivated to curate seamless occupant experiences using insights into their building performance.
• Improved operational efficiency: Digital tools and technologies can help commercial real estate companies automate repetitive tasks and streamline workflows, resulting in improved efficiency and cost savings.
• Access to valuable data: Digital tools and technologies provide CREs with valuable data and insights into their operations and performance to make data-driven decisions, inform real estate sales techniques, and improve the bottom line.
• Staying compliant with regulations: New regulations and laws are emerging that make it mandatory for companies to have digital data.
• Preparing for future trends: The post-pandemic world has set a new standard of expectations from CREs. Early adopters of digital tools and technologies will be well-positioned to benefit from the more advanced solutions coming up every day.
• Environmental impact: Digital transformation of CRE businesses also includes building management systems and smart building technologies, which help reduce energy consumption and improve the overall environmental impact.

Common obstacles CREs face in their digital transformation journey

CREs face a wide range of challenges when evaluating solutions for digital transformation and need to have a clear understanding of their needs, create a governance structure and have a dedicated team with relevant expertise, plan a budget and measure progress and adapt as needed.

• Lack of technical expertise
• Resistance to change from employees
• Limited budget
• Difficulty in integrating new systems
• Managing data security
• Difficulty in measuring the return on investment
• Data silos and lack of data integration
• Technical debt from the outdated technology stack
• Challenges in complying with regulations and laws

Additionally, establishing clear objectives and goals for digital transformation can help ensure that the investment produces the desired results.

Common goals for digital transformation in commercial real estate

CREs are faced with new expectations that were not imagined before the pandemic.

Most times, these expectations are also compliance regulations.

Depending on their business and customer needs, CREs have different goals and objectives for digital transformation initiatives.

Some common goals include:

• Improving occupancy satisfaction and experience with IoT-enabled solutions
• Lease management
• Better collaboration between tenants, landlords, and property managers
• Enhancing security and access control in the building
• Optimizing space and energy consumption with smart building technologies
• Improving forecasting, budgeting, and forecasting with data analytics.
• Streamlining paperwork, contract management, and transactions with e-signatures and digital documents.
• Enhancing customer service and personalization
• Increasing revenue through improved marketing, lead generation, and transaction management
• Gaining insights and making data-driven decisions

CREs view digital transformation initiatives as strategic investments impacting the bottom line rather than just process improvements for day-to-day operations.

How to get started with CRE digital transformation?

Here's a short checklist of things to do before you embark on your journey of digital transformation:

• Assess current digital capabilities and identify areas for improvement.
• Develop a digital strategy to align with the overall business strategy and includes specific goals, objectives, timelines, and budgets.
• Identify the right solutions that support the digital strategy.
• Create a project plan with specific steps, timelines, resources, and responsibilities.
• Build a dedicated team of experts to drive digital transformation.
• Implement, test, and train your people for the new technology.
• Monitor and evaluate progress to make adjustments as needed.
• Communicate and align with all stakeholders and ensure data privacy and security.

Once you are clear on your goals and business objectives, it's time for what is perhaps the most challenging part of digital transformation - choosing the right software and tools to aid your vision.

For instance, take the need for digital transformation in Facilities Management.

Quick history, trends, and predictions for CRE facilities management

In the 1990s, when facilities management (FM) began to emerge as a distinct profession, FM was defined as the function of maintaining and repairing buildings and equipment. FM practices were primarily reactive at this time, with little emphasis on preventive maintenance or sustainability.

The next decade witnessed the advent of computer-aided facility management (CAFM) software, which promoted automated and data-driven approaches to managing facilities. At this time, CaFM were mere records systems and enabled preventive maintenance scheduling.

The 2010s saw the growing popularity of building management systems (BMS) and the Internet of Things (IoT) that enabled automated systems to manage everything from HVAC to lighting systems to security and access control. This period also saw a sharp increase in the popularity of point solutions for specialized needs to complement or fill the gaps that CaFM left in creating "smart buildings."

Fast forward to 2020 and the post-pandemic era, which accelerated the shift towards remote or hybrid work, and forced facilities to reimagine occupant safety, health, experience, and better space utilization - the legacy CaFM and multiple point solutions that don't interoperate quickly became inadequate, especially for large facilities with numerous assets, buildings, or locations.

Today, the role of FM has evolved from a backend operations team to a more holistic function with strategic importance. As a result, use cases like occupant experience or space utilization that were thought of as advanced use cases only a decade ago are standard expectations and, in many cases, compliance regulations today.

This shift demands more from facilities, their owners, and operators. Unfortunately, legacy CaFM and a stack of point solutions to fill the gaps may create more silos and inefficiencies with less-than-ideal investment returns for the modern use cases we discussed. They are not upto the task.

Enter - Property operations platforms like Facilio to become a central command centre for all things O&M.

With technology advancements, the emphasis on sustainability, energy efficiency, security, and employee experience, FM increasingly relies on platforms to do more with less and upgrade to more advanced O&M technologies based on data-driven insights to unlock game-changing O&M efficiencies.

To sum up, the key is to intimately understand your digital transformation objectives' goals and pick solutions that enable further efficiencies as your business evolves and scales.

Not all new problems need new innovations and tools. Instead, reimagining the approach to existing core systems and making the most out of them is often best in the long term.

That said, we've put together a list of SaaS tools trusted and loved by CREs to help you explore the many areas that could benefit from digital transformation initiatives.

Essential SaaS tools for digital transformation in commercial real estate

Commercial real estate businesses can benefit from various SaaS tools as part of their digital transformation.

Some essential SaaS tools for CREs include:

Property management software

For managing leases, track properties, rent payments, and maintenance operations.

1. Facilio property operations platform for end-to-end O&M optimization.
2. Sage 300 Construction and Real estate for managing the entrire project lifecycle
3. Re-leased for accounting, portfolio management, tenant communication, inspections, document storage and compliance management.

Marketing automation software

For automating tasks like lead generation, email marketing, and drip campaigns.

1. BoomTown for generating and managing leads, consumer websites, CRM, and in-house lead qualification services.
2. Chime for lead generation, marketing automation, advanced lead management,and sales acceleration.

Customer Relationship Management (CRM) software

For managing and tracking interactions with clients, and track leads and deals.

1. Salesforce CRM for opportunity management, lead management, email integration, sales forecasting, and files sync and share.
2. Hubspot CRM for social media marketing, content management, web analytics, landing pages, customer support, and search engine optimization.

Transaction management software

For managing and execute contracts, closing deals, and other related tasks.

1. Qualia for commission management, file sharing, task management, electronic signature, and accounting.
2. Dotloop for brokers, agents and teams to closes deal faster.

Property Intelligence and analytics tools

For enables users to access, leverage, and utilize property information to make property-centric decisions.

1. Facilio for capturing simultaneous snapshots of live performance data of all your systems and enabling portfolio-wide optimization within the context of facility management and sustainability management.
2. Crexi for accelerating deal velocity and democratizing access to both properties and industry data.

GIS mapping and property visualization tools

For visualizing and analyzing real estate properties and data on maps.

1. ArcGIS Online for connecting people, locations, and data using interactive maps with intuitive analysis tools to deliver location intelligence.
2. Maptitude for data visualization and geographic analysis, a comprehensive library of maps and GIS data for your country.

Communication and collaboration tools

For fostering seamless communication among teams and streamlining workflows.

1. Workstorm for seamless collaboration capabilities that improve client service, productivity, employee engagement.
2. AirSend for simplified conversations, voice and video calls, file sharing, task management and note keeping in one space.

Project management software

For managing and organizing the different tasks and timelines associated with a project.

1. Zoho Projects for schedule management, document handling, real-time collaboration, detailed planning, custom templates, and resource utilization.
2. Proofhub for tracking listings and potential offers, resource allocation, client interactions, contractor management, and team collaboration.

Asset management software

For managing portfolios of properties, including financial and performance data.

1. Facilio to gain a portfolio-wide visualisation of your 360* asset lifecycle, simplify assessment, and digitize compliance to see improved asset value. Optimize the performance of assets and energy with data-driven insights on asset health and energy consumption.
2. Asseti for managing rent rolls, property portfolios, operating expenses, and financial consolidation for property assets

Financial management software

For accounting, budgeting, and financial forecasting.

1. Buildium for managing the entire tenant journey, lead generation, tenant screening, lease application processing, property maintenance-issue management and business-performance analytics tools.
2. Intuit QuickBooks for invoicing, payment acceptance, estimates, contractor management, receipt capture, and bill pay.

Lease abstraction software

For automating the process of extracting key data from leases.

1. Dealsumm to automate agreement review, activate revenue potential, simplify document management with Artificial Intelligence (AI)
2. Prophia to access validated portfolio data in real-time to inform your business strategy and maximize investment potential.

Proposal generation software

For creating, presenting, and sharing proposals quickly and easily.

1. Jotform for creating proposals, collecting relevant data like contact information, and e-signatures on proposals.
2. Pandadoc to upload, create, send, track and e-sign documents, and collect payments.

Energy management software

to monitor and optimize their energy consumption and reduce costs.

1. Facilio for portfolio-wide sustainability management, full operational life-cycle from equipment to energy performance, real-time IoT data, asset vendor accountability, retrofit evaluations, shareable dashboards and custom reports.
2. Autodesk Insight for architects and engineers to design more energy-efficient buildings with advanced simulation engines and building performance analysis data integrated in Revit.

Space planning software

To create and visualize floor plans and layouts, office hoteling, and space utilization.

1. Facilio's IWMS to drive excellent experience by covering all aspects of your workplace management with intuitive space visualization, room booking, occupant service request, and an end-to-end visitor management.
2. Robin for conference room scheduling, desk booking, maps and analytics

This is, of course, not an exhaustive list for types of software to aid digital transformation initiatives for CREs. They may deploy several different software depending on specific needs and goals.

To find solutions that best fit the needs of a specific function in your organization, consult with the right stakeholders from the get-go. For instance, if you're looking for marketing automation solutions, you should involve department heads, project managers, marketing advisors or consultants, and the end users in the evaluation process.

This list contains both, platforms which offer solutions for a wide range of problems in their domain, and point solutions, which are purpose-built for very specific use cases.

Yes, this is another important decision to inform your digital transformation strategy.

Platforms Vs. Point Solutions: Which ones are best for your business?

One of the first touch points for evaluating SaaS tools for your digital transformation efforts is to understand if you should choose platforms or point solutions.

Platforms like Facilio for property operations are comprehensive solutions designed to cover a wide range of functionalities and enable interoperability with other systems. Platforms are flexible and can be customized to meet the organization's specific needs.

Additionally, they can offer an end-to-end workflow solution and the ability to scale up as the business grows.

Point solutions, on the other hand, are specialized solutions designed to solve a specific problem. They are often more affordable than platforms but can quickly become problematic if they do not interoperate with your existing essential software, generating tech waste.

Platforms or point solutions is a strategic decision CREs must make to align with their business goals, digital transformation objectives, stakeholder interests, and budgets.

For large organizations with multiple properties, a platform solution may be more suitable as it can manage multiple properties under one platform, become a central command control for all data and reveal more efficiencies for portfolio-wide optimization.

Point solutions might be more suitable and cost-effective for small organizations or those with a single property.

Tips for setting clear goals and objectives for digital transformation in commercial real estate

Commercial real estate businesses can establish clear objectives and goals for digital transformation by:

• Identify the current state of the business, areas that need improvement and opportunities for growth.
• Define overall business objectives that align with the overall business strategy and are specific, measurable, achievable, relevant, and time-bound (SMART).
• Identify key performance indicators (KPIs) to measure success and align with business objectives.
• Set specific goals to align with overall objectives and KPIs and are specific, measurable, and time-bound.
• Develop an action plan with specific steps, timelines, and responsibilities.
• Monitor and evaluate progress against goals and KPIs and make adjustments as needed.
• Communicate and align with all stakeholders and assign a project leader to manage the initiative's coordination, communication, and management.
• Conduct a gap analysis to identify gaps between the current and desired state of the process.
• Prioritize objectives and goals based on their level of impact.
• Establish a governance structure to oversee the digital transformation process.
• Define a budget and allocate resources for digital transformation initiatives.

Once you have answers to these questions, you will be in a better position to evaluate the right software solutions for your business' objectives.

Questions to ask while evaluating any software solution for your CRE business

When evaluating software solutions for CRE digital transformation, there are several important questions to consider:

• What specific business objectives are you trying to achieve with this software?
• How will this software integrate with your current systems and processes?
• Does the software have the necessary flexibility and customization options to fit your specific and evolving needs?
• Does the software have built-in security features to protect sensitive data?
• Does the software have a dedicated customer support team that can help with implementation and ongoing maintenance?
• Does the software have the necessary analytics and reporting capabilities that will enable you to monitor performance and measure results?
• How will the software help you to comply with regulations and laws?
• Does the software have built-in training and support resources?

Digital transformation is no longer optional, its survival - Do it right, do it now.

Digital transformation is critical for CRE businesses as it allows for an improved customer experience, increased efficiency, better data insights, a competitive advantage, cost savings, improved security, better decision-making, better compliance, better collaboration and adaptability to flexible working arrangements.

With the fast-paced changes in technology, increasing competition in the market and the evolving nature of demands from CREs, companies that do not adapt, die.