Digital Transformation: Immediately Necessary, Temporarily Challenging, Ultimately Rewarding
Digital transformation is a continuous process and varies in execution according to business model. Always vital is leadership’s commitment to identifying and integrating relevant new technologies, attracting and retaining digital natives and fostering a culture that encourages innovation.
"In today’s commercial real estate market, embracing the shift to digital and developing the right strategy to optimize digital assets will drive efficiency and growth while providing better insights internally and externally," RSM national management consulting leader Bill Kracunas said.
1. Adoption
The past decade has delivered a deluge of platforms tailored to CRE pros, as software developers have attempted to cater to the industry’s diverse niches.
The vast number of extremely specific software solutions overwhelmed workers and stalled adoption. Now, as enterprise-level application management solutions are solving the issue, combining the functionality of multiple information-gathering or management portals into one system, digital transformation should not be put off.
Across sectors, over two-thirds of transformation efforts fail. Transformation can sometimes prove an uncomfortable process, necessitating thoughtful disruption of the business model and changing systems employees have become accustomed to.
Revenue and profit margins may drop temporarily during the period of transition, but long-run returns will quickly eclipse losses.
Take the example of elevator manufacturers that employed sensors to record usage information and leveraged that data to selectively schedule maintenance service.
Installation costs were quickly recouped by the labor savings and the enhanced level of quality control. Instead of performing maintenance at regular intervals, needy elevators received service immediately, while unnecessary trips to others were eliminated.
A portion of these cost savings may be passed on to office manager clients, who could improve their elevators further with screens offered by companies that curate, aggregate and display breaking news stories and engaging content to riders.
Plug-and-play solutions take the creative onus off adopters. They facilitate catch-up for those lagging behind digital trends. Owners should consider incorporating technology into their physical assets to maximize their revenue contributions while prolonging their useful life. Capital expenditures can be publicized to elevate a company’s image, enticing new customers with innovation.
2. Talent
A recent study found 87% of executives believe digital technologies will revolutionize their industries, but only 44% feel their organizations are taking appropriate measures to prepare for imminent digital disruption. The study’s participants cited digital talent scarcity as a barrier to change.
Individuals with the requisite tech training are in short supply. Many are Millennials demonstrating less loyalty to their respective firms than the preceding generation. The study showed 50% of all employees claimed they were planning to leave their current company within three years, and 20% plan to exit within the year.
One of the surest ways for CRE firms to attract and retain the tech-savviest employees is to cultivate a forward-looking, trend-responsive reputation.
3. Culture
The corporate culture that inspires admiration has changed radically in the past few decades, mirroring the exponential pace of technology. Digitally mature organizations are focused on nimbly taking data-driven action, measuring, adjusting and continuously refining their offerings to remain sustainable and relevant to customers.
Digital transformation demands higher risk tolerance and favoring bold, experimental, fail-fast approaches. It enables decisions driven by actionable data rather than opportunism, intuition or instinctive responses. It works best with horizontal and distributed leadership structures rather than the old top-down model.
Digital transformation is becoming necessary for CRE companies wishing to remain competitive. Leadership must embrace digital transformation to foster client relationship-building to grow the business. Digitally mature organizations use technology to better understand customer and employee preferences, habits and requirements.
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