The Leader Magazine

DEC 2017

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th E l E a DER DECEMBER 2017 55 functionality over out-of-the-box IWMS. A logical question to ask is, "Wouldn't the functionality of a pre- configured solution be inferior to what any one CRE organization could obtain on its own?" Not if each CRE organization and service provider could provide input to the pre-configured technology integrator over time, such that the software improves with crowdsourcing. Few CRE organizations have the time, skill or budget to achieve the functionality that an entire user community could. The pre-configured solution integrator would be the clearinghouse, ensuring that any requirement is usable across the CRE community. The pre-configured technology includes "pre-integration." IWMS and BI would continuously improve because the integrator has a distinct advantage over any one software provider working with any one client. The integrator can make decisions as to where the functionality belongs (IWMS, BI, third-party application, mobile, etc.), pre-integrate these technologies into a more comprehensive solution, and interface with a much wider community of CRE organizations to spread cost and risk. In addition, the pre-configured solution integrator, unlike a pure software provider, could operate the solution as an independent data manager and workflow coordinator receiving direct feedback at the user level. The premise of the business model for the next generation of CRE technology is that the vast majority of configurations could be standardized. Every service provider and many CRE organizations have playbooks or process flows for performing CRE services, such as moving people, leasing property, building space, etc. Each process is typically adjusted for different asset types and project size. Still, there are a limited number of these processes and, given the movement of personnel between service providers, the differences between service provider process playbooks likely are minor. Service providers provide a broad perspective, having performed these same CRE processes across a wide client base. They can be the voice of the CRE organization for pre-configuration, minimizing the time and cost for any one CRE organization and limiting implementations to basic user set- up, configurations that are unique and integrations with business systems. 3. Implementation speed. Another benefit of the next generation of CRE technology business model is speed-to-value. When a CRE organization initially outsources or changes outsource service providers, the typical transition period is three to six months. This precludes a traditional IWMS implementation. Therefore, many service providers and CRE organizations default to inferior point solutions. With the concept of a pre-configured and pre-integrated, IWMS-and-BI solution, the implementation time can be reduced to 12 weeks. Because customizations are not required after contracting, set-up is limited to people and organizations, locations, cost center and GL structure, and updates to field names in order to align with client or industry specific nomenclature. Existing property data can either be re-abstracted or keyed using offshore resources or automation. That data can also be migrated directly from commercial point solutions if the underlying data is considered to be high quality. New transactions, projects, work orders and other requests would begin in the new technology solution with historical records viewed only in the BI environment for trending. Data transfer to business systems would be achieved through secure file transfer protocols during the 12- week implementation, and direct integrations could be achieved later as a separate project to reduce implementation risk. The CRE technology integrator would not only provide user training for both the CRE organization and its service providers, it would monitor the underlying data for completeness, accuracy and timeliness of reporting. The new business model advocates establishing KPIs for data management itself, turning data into a strategic asset for the CRE organization, with primary focus on decision support to improve the portfolio's performance. The focus on data management ensures that the technology is fully utilized and that the user community achieves higher productivity faster, accelerating the return on investment. Modern BI tools have not only the capability to report activity but also to report data quality by analyzing missing or outlying data. This promotes data standards for benchmarking. Ideally, the integrator would have access to data that can be benchmarked across the solution community, providing added value from the technology. 4. Risk mitigation. As discussed, pre-configuration reduces both cost and implementation risk. But what about the business risk associated with working with the integrator? CRE organizations need to own their data and have the flexibility to organize service delivery that best fits their needs. The next-generation CRE technology requires the flexibility for the CRE organization to insource or outsource to any service provider. In turn, this requires the technology integrator to operate as a separate business unit to eliminate any pressure to bundle delivery or other CRE services. Another business risk is adoption by the service provider community. If CRE organizations are to centralize technology and receive the benefits of an enterprise-grade platform, then the service providers all must be able to coexist within the next-generation CRE technology. This is one reason why the underlying IWMS and BI tools must be built on commercial, not proprietary, technology. Ideally, the technology adoption rate will improve over time, but training, help desk and change management will be critical. With so many disparate point solutions in the market, with many IWMS technologies not fully deployed, and with many service providers competing with their own proprietary solutions, technology adoption by CRE organizations and service providers is sporadic and needs to be improved for our industry to advance. Another business risk is contractual, either for technology migration or changing technology solution providers. If the CRE organization is not satisfied with the next generation of CRE technology and wishes to migrate to a different solution, the data must be owned by the CRE organization. The technology integrator must provide the data back to the CRE organization in a file format that is usable for data migration. A final risk is a scenario in which the CRE organization wishes to continue using the next-generation CRE technology but not the solution integrator, due to support or maintenance issues. The annual fee for the next-generation CRE technology solution must be cancellable so the CRE organization can contract with another organization. The next-generation technology is founded on commercial technologies with a large technology service provider community that will be able to transition and maintain the technology solution.s To be clear, there will always be a market for highly customized technology solutions (for government, education, large retailers, etc.) as well as point solutions (small portfolios, decentralized organizations, etc.). However, this new business model for the next generation of CRE technology creates many opportunities to deploy a new type of CRE technology solution and help many more CRE organizations grow and add value to their companies. This solution provides a superior and scalable product with reduced total life cycle costs, reduced time to value, and reduced implementation risk. Alan Nager, MCR, has been with Newmark Knight Frank since 2006. He is an executive managing director for Newmark Knight Frank Global Corporate Services, managing the Global Corporate Services Solutions Group.

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