Commercial real estate industry makes room for IT

TORONTO — The commercial real estate business is in the process of playing IT catch-up since it’s a decade or more behind the rest of the corporate world, experts told the RealComm Canada conference on Tuesday.

Mark Rose, COO and CFO at Jones

Lang LaSalle, estimated that real estate is lagging by as much as 15 years. The problem isn’t one of investment in IT or a lack of desire to keep current, but the culture that permeates the business, he said. Commercial brokers are self-made people driven by a sales mentality — co-operation and sharing information doesn’t come naturally.

The tide is turning, said Rose, who spoke on a panel at the conference, but slowly. The industry is just waking up to the advantages of extranets to communicate with clients, business intelligence and performance management tools, and multimedia applications to enhance client presentations.

Jones Lang LaSalle, which offers real estate services on five continents, recently completed its first “”single client view”” application for a customer. That customer, which was not named, is now able to manage workflow, lease administration and tenant systems from a browser window. Rose said he anticipates the system will have future customers, but the work isn’t over yet.

“”It’s expensive, it’s taken time to do this and we’re still working the bugs out,”” he said. Experience tells Rose that those problems will be ironed out. He said that Jones Lang LaSalle used to charge $40,000 for an extranet deployment two years ago, but that same work can now be accomplished for only a few hundred of dollars.

The real estate industry is also being dragged into the information age by the forces of outsourcing. Other industries like banking and manufacturing have outsourced some of their non-core functions to third party providers and large real estate firms may follow suit, said Larry Barkley, principal with Barkley Consulting.

At this time last year, CoreNet Global, the world’s largest association of corporate real estate professionals, issued a report called, “”Enabling Work in a Networked World: A Colloborative Vision of the Role of Corporate Real Estate in 2010.””

The report states: “”At this point in time, the bottom line seems to be that, when properly planned and managed, outsourcing can allow the enterprise in general, as well as the corporate real estate department in particular, to focus its remaining resources on the more strategic challenges facing the corporation and explore new ways to add value. It also has become apparent that, by 2010, the ability to design and manage a network of service delivery partners will be a critical success factor for senior infrastructure leaders.””

Barkley agreed that this level of co-operation and the adoption of productivity and knowledge management tools is an imperative addition to corporate real estate.

The improvements that were promised during the tech boom and the dot-com era in the late 1990s are starting to be realized today, said Rob Cain, vice-president of sales and marketing for REApplications, a vendor of enterprise software to the real estate market.

“”I believe that finally, the impact is occurring,”” he said, adding that evidence of that can be seen in the hiring practices of some real estate companies. “”We’re seeing a trend, even in mid-size brokerage firms. We’re seeing them bring in a business solutions manager. The nouveau title for MIS director is business solutions manager.””

Five years ago, Jones Lang LaSalle had just completed the merger of two companies: LaSalle partners and Jones Lang Wootton. “”Post-merger, we had all these visions of grandeur,”” said Rose.

The firm overspent on a collaborative tool at the time and found that nobody wanted to use it because it was too complicated. They key was in addressing the cultural needs of the organization, said Rose. The firm reduced 100 applications down to 20 and had its 300 IT professionals operate on a global basis rather than in silos.

“”It had to do with the people. Technology is a commodity. It’s what you do with it and how you use it,”” he said. “”We have found over and over again, we stand in the way of our own progress.””

RealComm Canada 2004 wrapped up Tuesday.

Comment: info@itbusiness.ca

Share on LinkedIn Share with Google+