When this article was originally published in 2016, Chief Information and Chief Technology Officers were new to commercial real estate. As technology shifts from operational enhancement to becoming integral, strategic information and technology management becomes a central position for organizations desiring to achieve operational excellence.
According to author Liz Wolf writing for VTS, the trend in building executive leadership teams is leaning more towards hiring CTOs and CIOs rather than grooming existing CRE talent to step into those roles. Because technology is rapidly being integrated into commercial real estate operations, owners are hiring talent capable of making strategic contributions day one, In her words,
“It’s a completely new skill set around technology and data — and one driven by customer demand and innovative competitors."
Digital transformation in real estate business and operations is well underway, resulting in organizations integrating and elevating the roles of key members of their leadership team - namely the Chief Information Officer (CIO) and Chief Technology Officer (CTO). These roles have experienced an accelerated evolution over the past few years. They’re now responsible for not only the strategic technical direction of their companies but also for playing a crucial role in achieving the company’s overall business goals, and the trend is to bring subject matter experts into commercial real estate rather than home-growing talent. Things have changed.
TECHNOLOGY IS MOVING FROM THE FRINGE TO THE CENTER OF REAL ESTATE
Before the rise of PropTech, CIOs and CTOs spent the majority of their time implementing and managing phone systems, hardware, and ERP financial systems. These same executives now focus on cost-savings through automation, migrating their data processes to the cloud and assembling a custom tech stack to better enable data-driven team decision-making.
In Realcomm’s 2016 assessment, “IT will potentially touch every operation inside of a real estate organization. The level of strategic planning and careful thought required to accomplish this will also need unprecedented executive and cross-departmental collaboration.”
TOP CRE COMPANIES ARE LEVERAGING TECHNOLOGY THOUGHT LEADERS
Jim Whalen, SVP and CIO of Boston Properties, is constantly seeking new technology-driven solutions. “We want to see anything that enhances visibility and transparency from an operating perspective,” speaking at the 2016 Honest Buildings Innovation Summit.
VP and CIO Art McCann at Highwoods Properties demonstrates how IT departments deliver meaningful value to CRE organizations by enabling real-time access to NOI and other important data points. Interviewed by Realcomm McCann explains:
“IT understands the bits and bytes, but to deliver real value to an organization, the technology organization must truly partner with the business. IT needs to walk in the shoes of their coworkers to approach issues from their perspective. That's what we try to do at all times at Highwoods,” McCann said.
Using technology as a strategic lever to drive value is something Robert Entin, EVP and CIO of Vornado, who will lead a roundtable discussion and panel at Catalyst 2019, has been championing for more than 25 years. He is an advocate for CRE technology that drives innovation, and, ultimately, revenue. “The role of the CIO in implementing these technologies is key,” he told our team during a fireside chat held in March 2017.
“It’s crucial to integrate the newer products that are on the rise today into the existing tech stack in a way that is rational, with clean connection points between the functions. Those connection points create the most compelling opportunities for workflow and data today.”
To remain competitive, technology is key in leveraging the vast amounts of data owners amass throughout an asset’s lifecycle. Further leveling the playing field is that owners of various size all benefit from accessible data to build projections, and enhance their capacity to compete in their markets.
Commercial real estate owners who control and leverage accessible data to drive decision-making will outperform and outlast their competition.
THE EVOLUTION OF THE CIO/CTO ROLE ISN’T SLOWING DOWN ANYTIME SOON
“The CTO and CIO have become a more integral part of the C suite,” says Dean Hook, SVP and CIO at TIER REIT, who has 30 years of experience integrating real estate business operations and technology. “We now see CEOs and CFOs relying on them to provide alternative solutions as far as revenue and growth opportunities using technology.”
“The other piece that we’re starting to see is the role of CIO transforming to the point where now a CIO may hold an operational role in the company,” adds Hook. He was named Senior Vice President of Property Management after being recognized by TIER REIT as an expert building operations decision maker. “CIOs are becoming COOs and CMOs because they understand how to use technology and so they are starting to flow into these non-traditional technology roles because of the increasing importance of technology in business based roles.”
IMAGINE NEVER MISSING ANOTHER PIECE OF HONEST BUILDINGS CONTENT.