Outfitting a commercial real estate space with smart technology can be a substantial cost. While the long-term benefits and strategic improvements we’ve discussed above can make that investment worthwhile, the test period is important to ensure an impactful ROI. Property developers, owners, and managers should undertake a rigorous appraisal procedure to be sure the tech procurement complies with the project’s overall financial plan. And this isn’t just about obtaining the cost right. If the tech does not meet the requirements of this space, then all the wise technology on the planet won’t prevent the job from becoming a reduced cost.
Do the Research Which You Know…
The Tech. While the RFP is a key measure of the procurement procedure, a more casual research period should be undertaken . Smart technology is a rapidly evolving field, also earlier reaching out to vendors, the business should make sure that it knows what is available–both in regard to the kinds of technology that may be implemented, and the various companies that offer solutions. Gathering this information early will yield outcomes that align more closely with a specific building’s requirements.
The Metrics. Cost is a significant element in any trade, but a firm shouldn’t drop sight of other vital considerations that will determine if it’s the smart tech strategy is powerful. Given the array of smart technologies, these additional considerations might differ from project to project. Consider what aspects of a certain technology are important for a successful implementation (e.g., safety, interoperability, etc.), and also make sure that the inner stakeholders are still taking these factors into consideration when preparing for the RFP procedure.
Competition. It is intuitive that seller competition is a key instrument for negotiating favorable terms within a trade. What might not be intuitive is that starting contract negotiations with a few vendors may finally lead to faster resolution with the eventual down-selected seller. A competing seller is more inclined to make concessions, and do so quickly, because it’s still attempting to”make the purchase .” A seller that understands that it has won the business is a lot more likely to become entrenched in its positions and not as inclined to provide accommodations favorable to the customer. We always advise clients not to end a competitive environment too early!
Strategic communication at this phase is also key. It is perfectly okay to”guide” the competing vendors as to if their rankings, prices and solutions are competitive at the RFP. That said, the customer must be cautious to not reveal a competing seller’s confidential info. Clients must be aware of confidentiality and non-disclosure requirements when determining how to use this information that is gathered.
Timeline. Installation and installation of smart technology requires time. Work backward in a quote of when the tech needs to be in production and fully operational (will there be an approaching marketing push or open home, in which the tech should be on screen?) , to provide the inner stakeholders enough time to develop an RFP, evoke responses and assess the choices. A compressed deadline generates pressure to choose a seller, undercutting many of the benefits that have competition.
Bear in mind that negotiating the contract necessitates time, especially after seller down option. Factor contract negotiations into the deadline. Though there is an understandable impulse to”get smart” when possible, hurrying the procedure is only going to increase the leverage vendors have. Once vendors understand that the clock is ticking, they may use the clock against the consumer, and their very best offers might not materialize if they think an eagerness to agree is trumping the dedication to locating the highest quality offering.
The RFP method is that the opportunity to ask questions, seek clarifications, and also find out what kind of partner the seller will be. Deploying sound discussion approaches at this point is going to end in a more successful procurement procedure.
When Metrics Meet Commitments–Be Wary of Buzzwords
In assessing RFP answers, it can be simple to drop sight of this”why.” The metrics that were researched throughout the test period and highlighted throughout the RFP process shouldn’t be lost. The glossy, glistening RFP answers could possibly be filled with buzzwords and insignificant optional solutions, conjuring exciting dreams of a digitization overhaul. But bear in mind that the seller is trying to generate a sale, also buzzwords don’t always align with truth.
The buzzword trap apart, there might be vendors that offer an impressive company, but the fit might not be appropriate. The tech might have compatibility or aesthetic issues, regardless of the guarantee of exceptional performance.
Mapping the metrics driving the job to the offerings described by the vendors have become the most essential step to take. Cost is certainly one metric, but do not forget about other factors (like safety, interoperability, range of use, etc.) that will decide whether the smart tech approach is a triumph.
when the RFP process is complete along with a vendor is selected, the contracting procedure begins. Consider stakeholder continuity, where a few members of the team involved in the RFP take over and so are consulted throughout the contracting procedure. Insight into sooner business discussions will make for a more successful negotiation. Stay tuned for in depth information on the contracting procedure.
Smart Technology at Commercial Real Estate