For decades, it has been increasingly common for real estate management and investment firms to outsource an ever-growing number of functions. From accounting and payroll to lease and benefits administration, nearly everything that isn’t absolutely central to your firm’s specialty can be—and increasingly is—outsourced. This is particularly true for small and mid-sized real estate businesses, though even the largest commercial real estate management and investment firms recognize the benefits to outsourcing.
As Open Box Software director Brendan Canny recently wrote, outsourcing can be more than just a cost-cutting exercise and can substantially contribute to a company’s strategic advantage over competitors.
One prime example of how outsourcing can give you a competitive edge is in the area of technology implementation. For firms with an in-house IT help desk and for those who already outsource technology support, choosing the right consultants to help you determine your company’s software needs, assess current practices, and select and implement the best solutions can not only make your team more efficient in all that they do, but it can also help ensure that you reap the maximum return on your technology investment and stay ahead of your competitors.
Determining when to rely on outside experts isn’t always a straightforward process, however. Here is what you need to consider.
1. How specialized do we need our technology capability to be?
If you are an investment management firm with just a handful of assets under management, you can likely meet your investors’ needs through your existing, savvy Excel spreadsheet skills. But as my colleague, Josh Malinoff, has discussed in this blog before, if you harbor hopes of growing your portfolio, general ledger software won’t cut it forever.
The real estate industry is highly specialized and, as we all know, incredibly dynamic, often to the point of volatility. To survive and thrive in such an unpredictable environment means you need the right tools for the specific job. And knowing what those tools are, how they are constantly evolving, and what they can do for you may not be a skillset that currently resides on your payroll… and nor should it.
2. Are we maximizing our current technology’s functionality?
Recognizing the ways that real estate-specific software can provide a real estate management company with a competitive edge, many companies have long been relying on cutting-edge software such as Yardi, MRI, or RealPage, designed specifically for our industry. These technological power-tools are, however, often under-utilized, either due to a lack of in-house knowledge or because these solutions are evolving as quickly as the market itself. And often, in order to reap the maximum return on the investment you already made in your technology, a consultant who knows the nuances of the technology as well as he or she knows the contours of the real estate industry, is often the best way to ensure ROI.
3. Will outsourcing allow you to cut costs without undermining the quality of your service?
No need to mince words: implementing a new technology platform is a time-consuming and often harrowing process. Yes, it is a temporary process, but a burden nonetheless. And everyone on your team already has a job to do. Selecting, implementing, and learning a new system—not to mention identifying quirks and bugs, developing workarounds, and getting the system working smoothly—is a long and laborious endeavor, oftentimes more so than you think. What of your existing job functions will suffer as a result? Although your team will, of course, have a learning curve at first, the time (and number of headaches) spent learning new software can be dramatically reduced with the trusted help of a seasoned pro. Biting the bullet and making your team suffer in the absence of such guided help may negatively affect their performance, and prolong this effect, too.
4. Could your team’s modus operandi benefit from an unbiased, outside eye?
All businesses need a facelift, from time to time, or, at the very least, an objective assessment of what’s working optimally, and what could use improvement. Are your workflows as efficient as they could be? Are you meeting the challenges of an evolving market? Are you confident you are harnessing the power of the tools you already have?
Good technology consultants aren’t simply a glorified IT department, experts only in the technology. In the highly specialized real estate game, consultants like REdirect bring not only technology best practices and knowledge, but also decades of experience-based, real estate market intelligence, and strategic business advice.
In other words, the goal of a consultant isn’t simply to get you using a certain piece of software. Our goal is to help you improve your operations.