Commercial real estate investment firms come from the built world, where technology has traditionally taken the back seat. Any choice to implement a software is a lengthy and arduous process of identifying what problems need to be solved based on the most desirable business outcomes. Nevertheless, when looking to future-proof and scale, investment firms today recognize and trust that the players in the proptech space are real experts in their fields. Selecting the best proptech tooling for them offers a smarter way to digitize, standardize, and optimize elements of the investment process.
In this article we’ll dive head-first into how investment teams evaluate tech tooling specifically for deal management.
The first step is to acknowledge that issues and inefficiencies exist. The next step is to pinpoint how a particular tech solution can solve near-term problems, and more importantly, scale in a sustainable way for the future.
The “Build vs Buy” Debate
When it comes to implementing new tech solutions, we have seen large institutions debate whether to build or to buy.
If choosing to build an in-house data or pipeline management software:
- Firms are able to create a bespoke system that suits their process from day 1
However, building their own software is fundamentally challenging work:
- Firms are experts in CRE investing, but not necessarily software development.
- It’s an expensive endeavor because product and development teams need to be resourced with the brightest talent in the business
- Research, development and time-to-market is lengthy
- Maintenance of the tech is nuanced and difficult to scale
If choosing to buy software from a proptech company:
- Firms must be highly communicative about what sorts of expectations they have of what the stand-alone product offers, plus whatever custom development or integrations must be added on for the most viable iteration of the system.
Once a firm decides to buy – a detailed vendor evaluation process gets kicked off. In an ideal situation, the selected tech vendor becomes a trusted partner.
Seeking out a tech company with shared values and a sustainable product roadmap is the best way to ensure a successful partnership. A partnership where both groups are continually improving and striving for more impactful business outcomes.
- Travis Harper, VP of Customer Success
The Spectrum Between Point Solutions and Integrated Platforms
When evaluating tech offerings, it becomes immediately clear that some proptech companies sell point solutions, while others sell an integrated platform. The former is typically a singular function to fill a specific need, while the latter is a tech solution that can be used by multiple departments to solve multiple use cases.
With employing a point solution it’s easier to trust the expertise by the specificity of the feature set. Because the tech “does one thing well” it also becomes a best practice.
For example, a task management tool that helps users organize milestones and deadlines.
On the other hand, when engaging with an integrated platform, buyers commit to adopting a larger feature set. Consider a property management platform that allows you to see accounting, marketing, and lease information across your portfolio. With a wider range of tooling, a great deal of time must also be allotted to ensure a full utilization of all the functions available for use.
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