Profiting from the Information Revolution
How You Can Save Time, Cut Costs, and Boost Profits by Using the Latest Technology.
Today's technology is advancing so quickly that it's "impossible to predict what office technology will be like in five years," says Scott Rooth, CCIM, The Brookstone Companies, Cashiers, North Carolina. Five years ago, "the most important technological invention was the fax machine." Today, almost every business and many residences have a facsimile machine; in the meantime, electronic mail is starting to challenge the fax machine's dominance.
Some say that within five years every business that hopes to compete will be benefiting from state-of-the-art technology. But according to John McCrocklin, CCIM, CRB, ALC, John H. McCrocklin Company, San Marcos, Texas, "It won't take five years." He suggests that the sooner real estate professionals become automated, the better.
Charles A. McClure, CCIM, CRB, The McClure Group, Dallas, sees businesses being challenged now to keep up-to-date with their computers and software to avoid losing out to better-equipped competitors. He notes that without utilizing modern technology, he could not keep up with the expanded number of reports required by wealthy individuals and institutional clients. His computer setup-a Toshiba notebook computer with fax modem and remote-office computer access capabilities-helps him serve his clients, keep informed of happenings in the market, and decrease his work time. A computer "is an efficiency tool more than anything," he says.
"Time is your money," agrees CCIM Charles Freedenberg, CRE, Craig L. Michalak Inc. Commercial Real Estate, Bellevue, Washington. Technology such as fax modems, presentation software, and analysis programs save time, allowing commercial real estate brokers to work fewer hours or make even more money working the same hours.
Adapting to High Tech
Few people would argue for completely ignoring the business benefits of computerization. The big question for commercial real estate professionals is how much they have to adapt to the high-tech business world. Do they need more than a basic desktop computer and a fax machine? Do they need to become-in the words of one CCIM-high-tech "nerds" who adopt every new technology that could possibly help them?
"I view our business a little more globally than some," Freedenberg says. "We're in an information service. Our job is to convey the benefits of certain properties to certain people. Whatever we can do to enhance our presentation and be noticed above the noise increases our business."
Freedenberg's office has invested $30,000 in a computer-controlled video editing suite. Though a more basic setup is available for between $12,000 and $15,000, he says his investment will prove worthwhile. He plans to produce and sell instructional videotapes, but he also plans to use the technology to help him sell properties by "walking" customers through properties without clients having to leave the comfort of their office chairs or their living-room couches.
"The day and age of me talking one-on-one with my clients is near gone, at least when it comes to institutional clients," says Rooth. In his dealings with large clients, he may have a number of different contact people to interface with, and it is more efficient for him to use e-mail and facsimiles. "Why play telephone tag? I see the fax machine in the next couple of years being as important as the telephone."
Commercial real estate professionals who resist the lure of technology may soon find themselves unable to compete against better-armed rivals. "I'd say if you don't have a fax machine today, you're out of the loop," says Rooth. "And if you don't have e-mail within 12 months, you will be out of the loop."
The phenomenon of late-20th century technological growth goes by many names-office automation, the information age, the information superhighway, cyberspace. Regardless of its label, it is a revolution in information distribution and use that has CCIMs, like other business people, debating the merits of enlisting. But more so than other professionals, CCIMs can use the new technology-ranging from simple fax machines to CD-ROM to networked databases-to increase the benefits of their specialized training and highlight the differences between themselves and other commercial brokers.
The importance of technology and computer networks for businesses in general and commercial real estate brokers in particular will continue to grow in future years. The federal government is actively promoting the information superhighway because of its profound implications for American economic competitiveness. In a recent report, Electronic Enterprises: Looking to the Future, the congressional Office of Technology Assessment notes that "flexibility and choice allow businesses to move quickly and strategically to respond to changing circumstances and market demand. . . . Open, interoperable systems, which can be easily interconnected, reduce business transaction costs and barriers to market entry. Technology diffusion will also occur faster and more broadly because interoperable components are cheaper and easier to use."
That's government-speak meaning that traffic on the information superhighway is picking up, and if you don't want to get stuck at the on ramp, start planning your route now. Fortune magazine reported earlier this year that "companies testing the waters [of the worldwide computer network known as the Internet] boast of increased productivity, better collaboration with strategic partners, and access to what is in essence the world's largest public library for a seemingly infinite range of information."
Though most CCIMs are using computers to some degree, many of them can greatly increase their efficiency by better utilizing the available tools. To stretch the superhighway analogy a little more, it is as if they own the car and keep it nice and shiny in the garage, but have not yet discovered that they can drive it to work rather than take a bus.
"I use the computer as a personal productivity tool," says Ralph D. Spencer, CCIM, SIOR, Harrison & Bates, Inc./New America Network, Richmond, Virginia. "I had a computer that went down-it was off-and-on for two months-and it absolutely killed me. The way I practice, it is an essential tool."
Spencer, who uses an IBM Thinkpad notebook computer, says his ACT! contact management software-which includes a diary to keep track of business-is his most important tool. "Can you do [commercial real estate] without computers? Yes, because we did do without it," he says, but his system has enabled him to do things he could not do without the technology. "This week I faxed someone a letter at 1 a.m. because he absolutely had to have it by 8 that morning." He also uses his notebook computer to write memos, letters, and proposals, and to do investment analysis, spreadsheet analysis, and presentations "on the fly."
Though faxes were far from ubiquitous five years ago, today they are commonplace and even indispensable for some transactions. If the past is any guide, in two or three years businesses without electronic mail, remote-office access, and presentation software may be unable to compete. Even today, some business transactions that were unthinkable in the early 1980s are carried out with deceptive ease.
"I sat on a client's porch one day and had his attorney send us a contract," Spencer relates. "We sat there and redlined it by using the OCR [optical character recognition]" fax capability. "We did that work sitting on his porch!"
"I don't know if I am making more money or doing more in less time," says Ari Feldman, CCIM, Ari Feldman Company, Dayton, Ohio. He is certain, however, that he is more efficient, and he notes that it used to take him 45 minutes to calculate a spreadsheet and an additional two hours for his secretary to retype the information into a usable form. Today, he uses software to cut that two hours and 45 minutes down to less than 10 minutes, and can even calculate information for a client during a phone call. With his basic word-processing program, he saves time by automated addressing of letters, which he prints or faxes on letterhead directly from the computer.
The machines in Rooth's office are networked together "and any of our staff who's on the road a lot can send messages to anyone right away," sometimes cutting days out of the information loop. Rooth says that modern commercial brokers are seldom in their offices, so the added speed is indispensable. He cites benefits including speeded-up deals and the facilitation of last-minute questions from clients.
Freedenberg uses his hookups to local and even international computer networks like CompuServe to carry on cheap correspondence and quick mail-order transactions. Through networks he can quickly contact authors and business persons with specific questions and receive prompt replies. He is also corresponding with a fellow CCIM who has relocated to Paris-communication that only costs him the expense of a local call, because his call is only to the local hookup to the international computer network. He also sits at home, calls up his local library on the computer, and orders books. "A couple of days later, the books arrive at my house in the mail."
Utilizing state-of-the-art technology can do more than just save time and increase convenience, however; it can also help CCIMs perform transactions they could not have done without the technology. McCrocklin, whose business takes him around the world from England to the People's Republic of China, was able to use a battery-powered Toshiba laptop computer to prepare a report for an Indonesian client while McCrocklin was staying in thatched-roof huts in the jungle. He had to present the report before he left the country, and he could not depend on there being any computers to rent in Jakarta, the nation's capital. "We couldn't have done that [transaction] without the laptop."
With computerization, brokers can "open a new line of revenue sources," says McCrocklin. His office has identified 10 new revenue sources it could not access without the technology. One example is its role as a consultant for a case involving a company in legal trouble. McCrocklin's office had to review all documents and files and individually contact more than 500 investors to learn if the records were correct, a near-impossible task without the computer system. "We did all that electronically," he says. The investment in technology paid off. "We were making $50,000 a month in consulting fees for that case."
Sometimes, the aid of technology is a little less flashy but still important to providing service to clients. "What we try to do is think of all kinds of creative ways to do things that we couldn't do without that technology," McCrocklin says. Once, when he did not have a printer available to print a document for a client, he simply used his computer's fax modem to fax the document to the office's front desk. He then retrieved the document from the receptionist and handed it to the client.
Feldman says CCIMs are known for just that kind of resourcefulness, and building on that strength can only help designees increase their leadership in the field. Feldman often works across the border with Mexican real estate professionals and says that in the minds of his Mexican counterparts, technology and CCIM expertise go together. "In Mexico, one of the things that fascinates them about CCIMs is our grasp of technology," says Feldman. "They know the future is different, and technology is driving the world."
Nonetheless, he warns against brokers haphazardly buying all the latest hardware and software upgrades just to stay up-to-date. He keeps up on the industry by reading InfoWorld, a computer trade magazine, and notes that there are advantages and disadvantages to each hardware setup. Users of IBM-compatible computers, compared to users of Apple computers, face a constant barrage of upgrades and new editions of programs. "Without Windows, I don't think we can make the kind of advances we've already made," he says. But hardware is not destiny. Feldman uses Word for Windows 2.0-an older version-despite the availability of advanced versions, because the upgrades do not offer capabilities that supersede the tasks he can already perform on the older version.
Commercial brokers should be more concerned with getting only the technology that fits their needs rather than avoiding obsolescence. "It doesn't matter what the name brand is, because that is only valuable to the consumer and the ego," Feldman says. "Don't get trapped in the technology."
Going Whole Hog?
Gary Tharp, CCIM, The Bywater Company, Orlando, Florida, is part of a highly automated office that did $43 million in business last year. Based on a Novell network of computers, the office setup includes fax modems, remote-office computer access, multiple printers, and graphic programs that Tharp says gives the office's 16 brokers an advantage over competitors. "We tend to be ahead of them," he says. His office, one of the largest commercial brokers in Orlando, uses WordPerfect, CorelDraw, and a Paradox database. The brokers carry Toshiba laptops on trips and are able to remote-access the office network for instant data retrieval. In addition, many of the brokers use pagers that can transmit a written message (to allow the broker to decide how urgent the call is). The pagers are also used to broadcast messages to all brokers equipped with the device-such as a message reminding them about a Monday-morning staff meeting.
Tharp's office uses a database program called MetroScan, a geographic information system that provides 24-hour-a-day access to information, including tax assessor's data ("We've got the tax assessors coming to us"). As a result, his office can provide clients with more information because brokers do not have to wait for data from other offices and government bureaucrats. "We use 10 or 12 times more demographic information now than we did before we had that system."
Though his office buys the latest technology, Tharp keeps technological obsolescence in context. "We buy right up to the state-of-the-art, and we know two months later someone will come out" with a better version, he says. He suggests that a business person's first computer is their learning computer, not necessarily the device they will be stuck with for life. "Get a computer, not the most expensive computer," he advises. "Your first computer, you'll get rid of in six months. You want something that is cheap," to learn on.
Different professionals need different setups. Though Spencer swears by his contact management software and extols the virtues of using faxes, he does not use a digital pager. Instead, he uses a cellular phone on which his clients can track him down anywhere in the country at one number. Once, when he was at a professional meeting in San Francisco, he got a transaction because of the ability of a client back in Virginia to track him down. "He asked if I could come over to his office right away. I told him I couldn't," because Spencer was in California. Because of the phone link, however, the client thought Spencer was in his car in Virginia.
How Much Is Enough?
Technology may have become common enough that "middle-of-the-road professionals"-Spencer's definition for those who are reasonably proficient in computers but are neither wizards nor neophytes-are ascending an easier learning curve. They already have the basics of computer operation under their belt. And if, as Spencer suggests, clients and colleagues in today's marketplace expect people to have fax machines and other basic computer technology, CCIMs will need to stay with-and even ahead of-the advances in high-tech business equipment.
This requires a game plan for acquiring a complete computer system, which can save problems later. Though some business people are tempted to buy only what they need and purchase upgrades from whatever store has the lowest prices or the newest features, McClure says brokers should strive for continuity. He suggests they look for the ability to run a wide range of programswhen purchasing an operating system, such as Microsoft, which has its own highly praised spreadsheet program, Excel. "Don't piecemeal yourself. Buy it [all] from one vendor; that way, you have consistency," McClure says. "There's one set of icons and one set of buttons to learn."
Rooth suggests that when brokers become comfortable with their computers, they should also familiarize themselves with programs like Lotus, Lotus Notes, and AmiPro, especially if they want to take advantage of services such as NARLINK (see "Networking via NARLINK" on page 16).
Constantly purchasing upgrades and newer and faster computer equipment can be expensive. For brokers concerned that they may be wasting their money, Rooth suggests short-term leasing as a less-costly solution. Though his office buys such items as laptops and some hard drives and desktops, "anything else, we are leasing."
Feldman is more targeted in his approach to dealing with obsolescence. Having the best computer should not be one's goal, Feldman believes; rather, brokers should identify what tasks they need to accomplish and what software helps them accomplish those tasks, and then they should acquire only the hardware needed to run that software. (See article on page 20 for more about this.)
He relates the story of some colleagues who spent $200 on new software that allowed them to transfer files between two computers. Feldman says that his existing software already had the capability to carry out that function with the purchase of a $7 cable.
Freedenberg agrees. "You're smarter to use what you need," he says. "Most people, in my opinion, don't use more than 5% or 10% of the programs they have. I have a CD-ROM and sound and everything else, and I enjoy it, but it is not mandatory."
Ultimately, commercial real estate professionals need to sift through much of the industry hype and make their own decisions about how to get wired up in a way that helps their businesses succeed.
"There's nothing that you need to do that can't be done on current technology," Freedenberg concludes. "With what we do in our business, if you want to stay with the computer you have for 15 years, you can do it." The only limiting factor, he says, is the size of the memory required by software programs.
And if you do need to upgrade your equipment? "So what if five years from today your $1,500 computer is obsolete?" Freedenberg responds. "You spent about a dollar a day to stay current." That's simply the cost of staying competitive.