The Leader Magazine

SEP 2018

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the leader September 2018 27 of players. Also, how do firms make modifications to their internal processes and governance models to put together a more integrated plan? The convergence of technology and real estate demands more collaboration within organizations. CRE will need to partner with other departments, such as finance, HR and IT. In particular, CRE will need to partner with IT to mitigate risks associated with cybersecurity and data privacy. CRE also will need to leverage outsourced partners or add specialized technology skills, such as data scientists, to CRE teams. "The issue is that many CRE teams still don't have the foundational elements of data governance, data strategy, and their overall technology roadmap fully worked out to enable them to scale and capitalize on the opportunities in front of them as it relates to IoT, the cloud, and data analytics," said James. As companies weave-in new technology, they might need fewer people to do the work or the processes themselves might change. This means that CRE needs to be more flexible to accommodate changing business processes. It is no longer just a decision of whether to buy or lease space; it's a matter of how companies control the space or drive changes to the space to benefit business operations. "That has wide-ranging implications from a financial point of view," said Nager. "What we have been seeing in that regard is a trend toward shorter-term leases and the ability to get out of a lease with early termination, because trying to predict what your space needs are going to be five or 10 years from now is pretty tough." So, the actual real estate transaction itself and how you control your space, he added, become just as important to create the flexibility as how you create the space itself. CRE professionals will have to respond to the changing nature of the workplace in years to come. Organizations also must understand how to support the employee at all times, both inside and outside of the workplace and in all industries. The need for people to be physically present will decrease in coming years as technologies like virtual and augmented reality replace that necessity. Workplaces will have to reflect that change. One of the mistakes companies tend to make is viewing technology as a magic bullet. "People think that technology is the panacea or cure- all, when the reality is that you can get the technology implemented, but it is going to take you more money and more effort to get companies to change their processes, and then do change management on the people," said Wagoner. "That is probably where CRE needs to focus and help their C-suites along – to understand that to go on this journey, you have to impact and drive effectual change in all three of those areas, and your process change and your people change are probably going to be the most complicated." Based in Minneapolis, Minnesota, Beth Mattson-Teig is a freelance business writer and editor who specializes in commercial real estate and finance topics.

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