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Tracking tech

Frameworks to benchmark your technology

By Journal of Property Management

New technology on the market has enhanced the ability of real estate managers to collect and analyze data. Managers are now more equipped to improve operations using benchmarks, as new forms of data collected at properties and across portfolios help them make better-educated decisions and interpret results. That internal data can be compared to industry benchmarks for further evaluation and to identify areas of performance that could provide a competitive advantage or hinder growth.

Real estate managers might use internal benchmarks to evaluate financial performance, leasing, staffing, occupancy, space and amenity use, energy efficiency, and many other areas. Technologies like the Internet of Things (IoT) and artificial intelligence (AI) have automated data collection and analysis in these areas, providing deeper insights into a broader array of data points. Examples of external benchmarks include IREM Income/Expense IQ and energy efficiency metrics available in ENERGY STAR® Portfolio Manager®.

Because of this technology, the best practice of “measure what you manage” becomes easier to pursue as the data you can obtain reaches new levels of specificity. But to find which technologies positively impact your benchmarking, you must keep track of your usage. This begs the question: How do you measure the technology itself? What metrics should you track? And what industry benchmarks should you use to further evaluate your use of technology?

Technology assessment frameworks

Monitoring the development of new technology and its use in real estate management can help you plan for an optimal implementation. However, when a new technology hits the market, it can be difficult to assess its potential impact and how much you should invest in related solutions. Several frameworks can help you evaluate these new systems.

The Gartner Hype Cycle is one framework that can help you evaluate new technologies. It demonstrates the lifecycle of a technology from initial development through its commercial availability and ultimately to its eventual decline and obsolescence. It can be helpful to place technologies into the Gartner Hype Cycle to guide your stakeholders’ decision-making based on their comfort level with the risks and opportunities associated with technologies at different stages in the lifecycle. This can be useful for your company and the industry overall when evaluating an organization’s technology culture.

Gartner Hype Cycle
The Gartner Hype Cycle shows the lifecycle of a technology from its introduction through its obsolescence. Assessing technologies based on where they fall in the Gartner Hype Cycle can help with decision-making and risk management. The stages of the Gartner Hype Cycle are described below.

> Technology trigger: The initial technology breakthrough. There may be early proof-of-concept examples, but products and solutions are not yet available.
> Peak of inflated expectations: Early success stories generate buzz around the technology, but failures are plentiful, and overall adoption remains low.
> Trough of disillusionment: Interest wanes as products fail to deliver and solution providers falter.
> Slope of enlightenment: Adoption steadily increases as benefits and best practices become clear; second- and third-generation products appear from product providers.
> Plateau of productivity: The technology’s viability and relevance are clear, and mainstream adoption occurs.

Source: Gartner

The MIT Tech Tracker is another framework useful for tracking the development of new technologies and determining the optimal time to invest. The tracker includes a top-25 ranking of technologies in real estate according to different factors such as public awareness, investment, momentum, and other variables. The tracker entry for each technology includes a description, an explanation of how it’s used in the real estate industry, and a timeline of developmental milestones.

The IREM Proptech Insights Survey examines proptech adoption among real estate management professionals and their portfolios. Conducted annually, the survey aims to provide industry benchmarks for adopting and using different types of technologies on the market, along with data on potential barriers to adoption.

Internal benchmarks

Which internal benchmarks you should track will vary based on the size of your portfolio, your existing technology stack, and your company’s strategic goals. Before gathering any data, determine which key performance indicators (KPIs) are most critical to your organization and what you should focus on tracking and improving.

Potential benchmarks related directly to technology include:

  • Dollars available to be invested in technology
  • Application costs
  • Application downtime
  • Implementation costs
  • Implementation time
  • Application users (new, ongoing)
  • Cost per end user
  • End users trained
  • End user satisfaction scores
  • Security breaches
  • Security breach response times
  • Service costs
  • Service response times
  • Spend by area of operations, property, square foot, etc.
  • Technology maintenance expenses

Benchmarking around a “run-grow-transform” model can provide insights into how technology supports a company’s strategic goals. For this type of tracking, technology expenses are divided into one of three categories: Does the expense 1) run the business, 2) grow the business, or 3) transform the business? Examining the breakdown of expenses in each category can help you evaluate whether you’re investing enough in growth and innovation.

Cybersecurity metrics

Cybersecurity is a critical area to benchmark as a part of your overall data security and privacy efforts, both to protect your business and safeguard sensitive customer and tenant/resident information like finances, Social Security numbers and other personal information. Several research and consulting organizations publish annual reports on cybersecurity issues that can provide benchmarks.

BakerHostetler’s annual Data Security Incident Response Report is based on data from over a thousand cybersecurity incidents from the prior year. The report includes data on network intrusions, ransomware demands, forensic investigation costs, incident response lifecycles, litigation costs, and other cybersecurity issues. This data is useful for benchmarking, budgeting, and risk management.

The annual SonicWall Cyber Threat Report provides valuable data and information for IT teams on the specific systems and methods bad actors are using to penetrate networks, along with information on the systems most vulnerable to hacking.

The annual Verizon Mobile Security Index (MSI) white paper includes information and data on which mobile devices and operating systems people are using when cyberattacks occur in their organizations. The report also contains data on the types of security errors people commit, such as clicking on a phishing link, downloading malware, or sharing personal information with a hacker.

Benchmarking in technology and cybersecurity is just as important as measuring operations in other areas of real estate management, allowing you to be strategic about what you’re investing in and how technology is being used to drive growth in your company and portfolio.

Journal of Property Management

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