Digital Transformation

By on Aug 11, 2020 in News

The state of commercial real estate has been significantly changed by the COVID-19 pandemic. The industry has seen a steep rise in the need for tech platforms to drive revenue and facilitate remote work to keep offices safe and productivity high.

Spending on advanced technology

According to CBRE research presented by Stuart Appley on a recent Realcomm webinar, 57% of companies were increasing spending on digital transformation prior to COVID. Moving forward, 70% of executives say digital transformation spending is likely to accelerate. A deeper dive into the numbers shows that increased spending is driven largely by business growth opportunities (51%) and increased competitive pressure (41%). The focus of the spending is primarily on modernizing customer touchpoints and enabling infrastructure, 54% and 45% respectively.

In other words, operators are spending on tech that allows them to grow their business and to keep up with the competition, specifically by creating or implementing new systems to eliminate physical touchpoints. Health and wellness standards will need to be consistently monitored in order for offices to return to normal business.

Appley, managing director for CBRE described some of the digital advances that companies are examining and implementing:

  • Drones to perform building inspections
  • Machine learning
  • Robotic process automation
  • Virtual reality training and virtual space planning
  • Blockchain to digitize assets

A poll in the Realcomm webinar, showed that 85% of attendees believe the rate of tech adoption will increase due to the effects of the pandemic on businesses.

Innovative projects and IT strategy

Executive decisions on IT should address several key metrics: increase asset value, reduce expenses, increase tenant retention and drive revenue. “If you build your IT strategy around these points, you will be successful,” said Brian Sutherland, industry principal at Yardi.

Moving payments online is something that has never been fully embraced by many tenants and landlords. With an influx of requests for electronic payments to maintain distancing and remove touchpoints, it seems this concept is gaining more momentum. Paying rent, paying vendors and accepting payments should be done through portals that facilitate security and expedite processing time.

Another key project is going to be 5G network infrastructure and implementation. With so many remote workers and a huge increase in virtual meetings, the demand for top of the line video conferencing and faster WiFi will only continue to grow.

Donnie Law, founder and CEO of REM Logics, shared that their research found 41% of companies are currently using no- or low-code platforms and 84% of those users reported reduced costs. No-code development allows for non-programmers to create software without the use of traditional programming methods. Examples of these cases, per REM Logics, include property calendars, task trackers for property managers, deferred payment agreements, loan management systems and custom lease abstract reporting.

A majority of the attendees on a recent Realcomm webinar voted that the main focus of their IT department for the next 12 months would be driving new IT initiatives in line with business strategy. The 56% who selected that response was greater than all other responses combined, with ‘addressing cybersecurity issues’ drawing 22% of the votes in second place.

Interoffice engagement

Employee surveys are becoming a significant way to gauge the overall mindset of teams. These surveys are helping operators make reopening decisions, as well as inform how the office will look and feel when it does welcome everyone back. Susan Gerock, vice president of Washington REIT, said her company’s surveys show that employees wanted more information about how the company works, what was going on internally and with the competition.

Her team decided to implement solutions like an intranet and a team dedicated to helping maintain lines of communications between departments and HR. “Use influencers like social media would,” Gerock said. “There are key members within an office who can entice others to seize and take advantage of new digital capabilities to further company goals.”

Ilan Zachar, CTO at Carr Properties, added that “IT needs to show we’re a horizontal department, not a vertical department and we need to have insight into all departments to be able to serve all of them.”

IT has been key in maintaining business continuity during these difficult times. Use this trend to drive not just current need, but future evolution from an IT perspective. The digital transformation was always going to happen, but now it is happening faster and with more immediate purpose than ever.