How to Avoid a Bad Commercial Real Estate Software Implementation

The right software can have a transformative impact on a company’s project outcomes. By integrating a platform built to service your vertical’s specific needs into your workflows, your firm can reduce overhead expenses, cut costs, and reduce the amount of low-value tasks that your team spends too much time on. However, bad software implementations are a significant barrier preventing your commercial real estate firm from enjoying the benefits of a modern digital infrastructure.

Northspyre recently commissioned a third-party  survey of CRE project managers that revealed this problem is a big problem within the industry.  

We discovered that 96% of respondents believe that using technology could benefit their project results. Unfortunately, 50% agreed that resistance to change prevents their companies from embracing digital transformation. In addition, 34% indicated that steep learning curves stopped their organizations from upgrading their software.

Here’s a look at why failed software implementations are a multi-industry problem, what causes them, and how to overcome the issue.  

What Causes Failed Software Adoptions

CIO recently published an  eye-opening article about 12 infamous enterprise software adoption failures involving multinational brands such as MillerCoors, Target Canada, Revlon, and PG&E. As you might assume, the corporations’ implementation breakdowns didn’t happen because of insufficient financial resources. Most of them invested millions in highly regarded solutions to improve their operations. 

Nevertheless, those market leaders experienced disastrous rollouts, and certain common factors emerged.

Target Canada’s effort to upgrade to a new enterprise resource planning (ERP) platform required the manual entry of all company data. Ranpak, a packaging company, found that its software’s  learning curve was so high that its $6.5 million implementation stretched over three months. Similarly, Invacare, a medical device manufacturer, paused its 2021digital transformation because its recently onboarded software prevented effective interdepartmental collaboration.

Regardless of industry, companies run into serious problems when their teams can’t integrate new software into their workflows quickly. Workers inevitably see their productivity decline when implementing platforms that aren’t fit for purpose. The unpleasant reality is If seasoned professionals can’t grasp the essential functions of a system without extensive training, it might be too complex to be usable.

That said, real estate developers shouldn’t reject the prospect of embracing new software. Economists believe an economic downturn is imminent, so an intelligence platform that can facilitate more cost-effective project development is a good investment. The trick is avoiding systems that don’t address your firm's needs directly.

Generalist Platforms Don’t Have the Features You Need

The root cause of many complexity-related enterprise software adoption failures is that the platforms selected are one-size-fits-all. They can store large amounts of varied data and support multiple departments at scale. But their lack of specialization and third-party integration often leads to flawed and protracted implementations.

For example, Lidl, an international discount supermarket chain, sought to replace its legacy merchandise management system with a modern solution. Its leaders wanted to eliminate inefficiencies like data storage redundancies, decentralized servers, and integration gaps. Unfortunately, after spending several years and €500 million ($518 million) on implementation, the firm  scuttled the project.

The reason Lidl’s platform adoption broke down? The software reportedly lacked the functionality to let the firm track its costs effectively.

Mission Produce, a fresh avocado distributor, encountered similar problems after implementing a system to improve operational visibility and accelerate reporting. However, following initial onboarding, the company ran into automated invoicing issues that disrupted its workflows. It also found that its platform didn’t support organization-wide information sharing, ironically obscuring high-level visibility.

Mission Produce overcame its implementation challenges but suffered a $22.2 million year-over-year quarterly profit decline.

Mission Produce and Lidl paid a heavy price to learn that generalist platforms couldn’t meet their specialized requirements. However, real estate developers don’t need to waste time and money to figure out which software features they need or which programs add complexity to their operations. Modern real estate development platforms are purpose-built, meaning they are designed specifically to resolve industry-specific problems.

Modern Purpose-Built Software Offers Flexibility and Customization

The most significant differences between good and bad software implementations are in the design and modernity of the platforms involved. 

Because off-the-shelf software is designed to suit companies in any industry, generalist programs often come equipped with tools its users don’t need. And by trying to force those broad systems to meet their specialized requirements, firms add inefficiencies to their workflows and hurt team buy-in. Moreover, businesses can run into major digital transformation roadblocks when working with systems dependent on manual data entry.   

For example, spreadsheets are widely used as a project development tool in commercial real estate. However, it lacks the functionality to let teams share data effectively or access historical data that could provide insights about current or future projects. Alternatively, construction management programs enable different departments to work together effectively, but developers have found that their specialized interfaces are difficult to operate.  

Ultimately, adoption failures become inevitable when companies figure out that their chosen platforms have become an obstacle to their success. By contrast, purpose-built platforms help users overcome challenges inherent to their industries and organizations.

In law enforcement, correctional facility administrators use specialized software to manage capacity and inmate entitlements. Contractors utilize a niche platform to measure the roofs of their clients’ homes to provide precise custom estimates without leaving the ground. And property owners use property management programs to collect rent and process maintenance requests.  

For real estate developers, the best platforms utilize artificial intelligence to eliminate common inefficiencies and bridge functionality gaps like capturing and indexing project data. It integrates with  popular accounting systems to enable seamless data transfer and collaboration between departments. Cloud-based programs centralize project data, automate reporting, remove data storage conflicts, and create high-level visibility between development teams and stakeholders. 

Even in today’s heavily digitalized landscape, the fear of software complexity still prevents many businesses from achieving their full potential. To embrace the solutions that actually aid your operations, you have to overcome the misconception that change can’t be good or easy.

Looking for more insights on how your company can thrive in a difficult economic environment? Download our  Commercial Real Estate Project Managers survey results to learn which operational changes project managers believe can cultivate more consistent project deliveries.