How to Build a CRE Tech Stack
Daniel Levison | October 14, 2019
If we are honest, and you are like most senior leaders in CRE brokerage firms — technology makes you anxious. It’s overwhelming confusing, and you didn’t exactly make a name for yourself by being “the tech guy” (or gal) who understands all of the ins and outs of technology, how it works, and how your brokerage can effectively use it. It’s scary; it’s hard to even know what the right questions are to ask much less implement a technology strategy.
What’s even more stressful is understanding how it works with the other existing CRE technologies you have or might be considering to add to your “technology stack.”
If we are honest, we have all been there, but let’s face it: technology can help CRE brokerage companies close more deals, work more productively, execute more, retain and recruit high-performing agents, while helping you make more informed decisions about your businesses if implemented and used effectively.
The right technology also allows CRE firms back-office team to operate at maximum efficiency. Conversely, selecting a technology that appears to improve agent productivity can, if not well thought out, actually cause issues in your back office operation that negates your perceived increase in agent productivity. It’s also worth noting, agents tend to focus on new business when they are double and triple checking whether or not an invoice has gone out or wondering if an expected big commission check has come in.
How to think about commercial real estate technology
Part of the stress in evaluating commercial real estate technology and software is that it’s (relatively) new. The category of CRE tech has exploded over the past 5 years with more options to choose from than ever. MIT recently reported that in 2014 their real estate technology department was tracking 250 CRE technology softwares and they are now tracking in excess of 2,500.
It’s not like the B2B marketing world where thousands of technology platforms, products, and tools have been available in the market for years. Where other industries have had the opportunity to study successful technology stacks for years, the CRE industry has been somewhat late to the game.
In commercial real estate there are no “best practices” for a tech stack because it’s still new in comparison to other markets. Given there are no “best practices” for creating a tech stack for the CRE industry, the focus for any CRE managing brokers should be about building the best tech stack for your specific company in order to improve your productivity in those areas your company excels.
And because no two CRE brokerage firms operate the exact same way or do the same kinds of deals, tech stacks will likely be somewhat unique.
The only best practice is: as long as the tech stack you choose aligns to your brokerage’s needs, then you can’t go wrong.
Start with the 5-year vision
It feels cliche to say “Start with the strategy!”, but it’s so critical to making any business decision — especially one as important as technology. Even more so if it comes with a hefty price tag.
We suggest starting the process for evaluating and building your tech stack is to start with where you want to be in five years from a productivity and streamlining your operations perspective.
Do you want to be you retired on a beach somewhere sipping piña coladas? Are you still in the throes of brokerage life, closing deals and hitting the phones? Do you want to sell the brokerage company? Do you want to expand and grow?
In other words, what are your management team’s goals and objectives?
Fast growth requires operations and scalability, so your technology will need to enable that in some way. The same is true for stepping away from the business or making the brokerage attractive enough to acquire.
Tackle the most repetitive, scalable pains first
Speaking of scale, we always recommend tackling the most repetitive pains or challenges in the brokerage.
Typically, we see the front office (agents, brokers, etc.) get tackled first. Sales is the most important priority, so the more agents and brokers can do in the time they have, the more revenue for the business. This is why CRE CRM’s are typically implemented first.
The same is true for anything that is directly revenue-generating — such as managing market listings, handling property data, and updating the website.
Beyond that, you’re likely going to look at creating operational efficiencies in the company’s back-office workflows. Considering how front-end software, which is focused on sales and marketing, functions with back-office operations is often overlooked. But, to gain “true productivity” it’s critical in evaluating the overall efficiency of a brokerage’s technology stack.
Optimize the back office
As you grow, you’ll likely run into a brick wall of efficiency and productivity. Something most brokerage owners don’t account for is that scaling the front office means you’ll absolutely have to do the same for the back office.
More deals = more transactions = more invoices, documents, comps, agent distributions, receivables — current, aged, and future, and so much more.
Which means if you’re still using spreadsheets and paper files to manage the back office, you’re missing out on one of the most beneficial aspects of enhancing your company’s technology: accomplishing more without adding more personnel and overhead.
It’s critical to consider a back office improvements while evaluating your firm’s tech stack. Otherwise, the workflows that keep the business alive could become less productive because they get bogged down in more manual processes.
Choose the Best Path to Value™️
Alright, just kidding. “Best Path to Value” isn’t trademarked, but you will undoubtedly encounter technologies that solve your pain on the surface, but also cause a world of hurt in some other area of the brokerage.
That’s why a savvy tech-buyer knows that it’s not about the fastest path to value, but the best path to value.
Fast doesn’t always mean best, and based on the platform’s strengths and weaknesses, you’ll need to determine the balance between short-term and long-term gains. Ideally, your strategic vision and brokerage needs dictate that balance.
If you’re also armed with the best questions to ask during a tech demo, you’ll be able to identify where the solution doesn’t excel and their overall weaknesses. This will also help you choose the best path to value.
The best path to value
There is an old saying that sums up things pretty well when it comes to evaluating and improving your company’s technology stack on an ongoing basis, and that is, if you aren’t moving, you’re moving backward.
CommissionTrac is here to assist you with all your back office and budget-planning needs, and all the analysis factors associated therewith.
To find out how you can use CommissionTrac to gain clarity and insight on your brokerage’s performance, manage your company’s individual receivables, commission plans, invoicing and distributions, and experience why Techstars Atlanta and Cox Enterprises are lead investors in CommissionTrac, request a demo today by visiting our website.