How comfortable would you be talking to a TV screen rather than to a person in front of you? For many people video conferencing is becoming accepted practice rather than flying across the world for a meeting. However, the concierge who greeted attendees at Realcomm in San Francisco was also virtual - she sat at home and her image was displayed on a 42inch plasma screen at the entrance to the conference.
The Virtual Concierge

On the second day, even those who did not stop to talk said good morning to the concierge as if she was in the room and so acceptance appeared high. If the concierge need not be situated in the building, she could be at a call centre managing a number of buildings or could be a part time worker from home. On a topical note, she could be off-shore, say, in India.

Just three years ago, this would have been seen as a gimmick riding the dotcom boom. However, now that many US companies have taken the quick wins in automating their property management, ideas such as the virtual concierge may be the next phase.

Realcomm 2004, Re-igniting Innovation, comprised two days of seminars discussing property management and automation together with an exhibition of 125 stands. The show always attracts senior US real estate industry figures and the panel discussions give a good opportunity to hear owners and occupiers debate trends and achievements in making the real estate industry more efficient.

The overwhelming impression from the conference was that major US companies have stopped just talking about good ideas and have created the platforms to put the ideas into action. Back in 2000, there were 300 dotcom firms with grand ideas about integrating the data of owners and occupiers to form stronger partnerships. As Scott Morey, ex-CIO of Equity Office Properties (EOP) and now MD of Real Foundations, said in one seminar, "Nobody could integrate information in 2000 because no company understood their processes well enough to be able to manage the outputs."

What was apparent at Realcomm was that the major companies have spent three years fine tuning and automating their processes and establishing flexible technology platforms so that they are now able to connect to their tenants and suppliers.

For example, GE Capital Real Estate have started to implement Tririga, a US based facilities management solution, to manage their occupational portfolio. The first phase which includes transaction management, lease administration and portfolio tracking, has produced savings 100% in excess of those forecast. Estimated costs of implementing this phase are in the region of only 20% of the savings achieved.

Wells Fargo, the US bank, has based their solution on SAP and has achieved similar levels of efficiency from their project. Much of the demand for the Wells Fargo solution has been from the business since the total cost of occupancy is recovered from each business unit. The key requirement has therefore been for forecasting property costs and this has been a key driver in the project.

The Workplace Resources (WPR) team at Cisco Systems took a group from the conference to show them around their headquarters and explain how Cisco is developing their accommodation strategies. This team are designing their next office around the ability for workers to sit anywhere and wirelessly access the phone and IT systems. The phones are Voice over IP (VOIP), internet phones, and handsets are not needed. Each worker can plug a headset into their laptop and call anywhere in the world. Cisco's WPR team also look after security on their campus and all 911 calls are routed to the security office before a decision is made to use in-house resources or escalate it to the local police or fire departments or to a hospital. Again established and documented processes are essential if this is to work effectively to save lives.

Cisco also manages its corporate information entirely on their intranet. If you want to book a conference room in your building or even arrange refreshments for a meeting in their Cairo office, the way to do it will be on the intranet. Almost all forms and information required to work at Cisco are on the web. Trainees are indoctrinated in this way of working by repeating the answer to any question - "It's on the web!"

Now that many companies are starting to get their key information across the organisation, companies are starting to change the way they work and change management was a key topic in a seminar of leading agents. Jones Lang LaSalle explained how their Knowledge Management database is open to key clients to share leading practice.

Re-emphasising the process review point, many companies stated that the biggest change is one of culture, not technology. The most important issues to address are therefore strong sponsorship and achieving buy-in from the users rather than selecting the best software. In attending to users' concerns about new practice, Marcus & & Millichap, the broking firm, admitted that its staff costs have increased but that has been the price of dramatically increasing the efficiency of their brokers.

It was to be expected that outsourcing would be a hot topic for discussion, given the recent press comments on off-shoring. A range of organisations discussed this and the processes outsourced range from IT development, through call centres to much of the agency process.

All the panellists agreed that at present the main market for outsourcing is in non-creative tasks such as re-drawing old plans electronically. However, accountants are now off-shoring tax assessment preparation and even the IRS in the US off-shore large parts of their assessment process. Global Realty Outsourcing currently uses Indian operations to abstract leases and they are comfortable in outsourcing any process which can be documented and checked against standard variables. Arguably this opens up much of a traditional surveyor's work to lower cost outsourced support. GRO suggest that this frees up time to transact business more effectively rather than putting property people out of work.

Savings through outsourcing appear to be in the region of 60-80% of equivalent US costs and in some cases the quality is actually higher than can be sourced at home. However, many of these operations have taken 10 years to set up and the benefits are just being realised. This is not for the faint-hearted.

What's next? Property managers agreed that the virtual concierge and automation of car park management, although dull, could save significant costs and drive efficiencies. Retail property owners considered wireless to be the most important item on their to-do list with retailers demanding this in shopping malls. All owners and managers were emphasising the need for greater partnership with their tenants and EOP measure the success of their systems initiatives in tenant retention - up from 48% in 1997 to 60% today.

With 32 seminars over 2 days it is impossible to cover everything, which included the participation of the PISCES team to reinforce their integration with OSCRE, the US data standards organisation. What is clear is that the excitement of the dotcom age with great new ideas has given way to the pragmatism of getting the job done. Many of the ideas are being implemented but on the back of extreme hard work. The Real Estate industry has grown up and is putting business change in front of technology in its quest for efficiency.

By Andrew Waller.
A version of this article was first published by Estates Gazette June 2004

 
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