Hi, I’m Derek and welcome to another episode of EnerTV.
I was sitting at a panel this morning watching some of the top investors in the real estate tech space talk about technology adoption within and across their portfolios.
With Tishman Speyer, Brookfield, EQ Office, Newmark, Camber Creek among them, it dawned on me that there is a non-linear, symbiotic model that exists between technology adoption and organizational change and how interdependent one is upon the other.
When a real estate company first decides to enter into the technology market, they enter by evaluating a number of solutions for say, asset management, brokerage, and integrated building operations platforms, to see which ones add the most immediate and long-term value to their portfolios.
So, they spend the first year or two adopting a few solutions across a few buildings, seeing where and how value can be extracted in news ways. As they define and decide on these value streams, they want to be able to adopt this across their portfolio, both horizontally and vertically so they can benefit from the non-linear growth potential.
As they expand across a portfolio, they’re unlocking more and more data streams out of these buildings and reach a point where they want to integrate vertically across other technologies within their portfolio. As these data streams are unlocked horizontally, they can now communicate with every other system, trading data and value to the point of transformational adoption.
They’re now unlocking value streams that were not accessible to them previously, which leads to an optimization in tenancy, tenant retention, and cost reductions, ultimately bringing in these new and increased cash flows that allows them to invest in the assets they’re interested in.
Now, there is, as I said, an interdependent relationship to organizational change that is non-linear and symbiotic in nature.
So, as you enter the market and adopt these solutions, you’re really at a point where you are undefined in terms of processes and workflows related to these technology solutions, at least compared to where you were yesterday.
As you bring in these new solutions, seeing where and how they add value to the organization and where your employees interact with the data, you get to the point where you can define workflows. This means you define who’s responsible for what, when, where, and how this information can be shared between individuals within the team.
Once processes have been defined over a few years, you can then de-silo the organization. Once you can horizontally and vertically integrate these solutions, you’re essentially vertically integrating each silo of your organization. Your brokerage teams, your asset management teams, your engineering teams, you’re giving them the ability to share data and really share value with one another in a way that really wasn’t possible before.
So, if asset management wants more value streams accessible to them around optimizing profitability, they might talk with their engineering team about what’s going on with costs and expenditures related to maintenance and operations that may help them make more informed decisions on current and future investments.
As you continue to de-silo the organization and share these value streams across the company, you’re then reaching the point where you can be more predictable in terms of where you should allocate certain resources to continue to unlock these value streams.
The ultimate goal is an optimized organization where you can minimize the costs and efforts that you need to put into each value streams so that way you can extract the most value - a more optimal cost to value ratio. As we see this non-linear growth in value from unlocking new data streams, we should ideally see a non-linear growth in the ability to organize your company in a way that is more de-siloed, more predictable, and more optimized in nature.
And I think we as a community really need to start talking about this more. Instead of “what technologies can we insert and extract value from,” or simply “how can I make my business more profitable,” it’s more about the interdependencies of the individuals in my company and the solutions they need to provide value to the organization as a whole.
I think as we continue to see these solutions deployed horizontally and vertically across buildings, portfolios, and the industry as a whole, we’re going to see massive transformation in terms how of technology interacts with all of the relevant stakeholders. I think there is more value to be unlocked that we don’t see yet.
Again, I’m Derek with Enertiv and this is another episode of EnerTV, thanks.