Legal news

Evaluating Smart Home Technology: It’s About More Than the Most Important Thing

Outfitting a commercial real estate space with intelligent technology can be a substantial cost. While the long-term advantages and tactical improvements we’ve discussed above might make that investment worthwhile, the appraisal period is crucial to guarantee an impactful ROI. Property developers, owners, and managers must undertake a rigorous examination process to make sure the technology procurement complies with the project total financial plan. And this is not only about obtaining the cost right. If the technology does not satisfy the requirements of this space, then all the smart technology on the planet will not stop the job from being a sunk cost.
Do the Research Which You Know…
The Tech. Though the RFP is a key step of the procurement process, a more informal research phase should be undertaken . Smart engineering is a rapidly evolving field, and before reaching out to sellers, the company must ensure that it knows what is available–both in regard to the sorts of technology that may be executed, and the various businesses that provide solutions. Gathering this information early can yield results that align more closely with a particular building’s demands.
The Metrics. Cost is an important factor in any transaction, but a corporation shouldn’t drop sight of other crucial factors that can determine if it’s the smart technology strategy is powerful. Given the array of intelligent technologies, these extra considerations might vary from project to project. Think about what aspects of a specific technology are most important for a successful implementation (e.g., security, interoperability, etc.), and ensure that the inner stakeholders are now taking these variables into account when preparing for the RFP process.
RFP and Vendor Selection
Competition. It’s intuitive that seller competition is a key tool for negotiating favorable terms within a transaction. What might not be intuitive is that beginning contract negotiations with a couple sellers may ultimately lead to faster resolution with the eventual down-selected seller. A competing seller is more inclined to make concessions, and do so fast, because it’s still attempting to”make the purchase .” A seller that understands it has won the company is significantly more likely to become entrenched because of its own positions and less inclined to offer accommodations favorable to the client. We always advise customers to not end a competitive environment too early!
Strategic communication in this phase is also key. It’s completely okay to”guide” the competing sellers as to if their positions, prices and solutions are aggressive in the RFP. Nevertheless, the client has to be cautious to not show a competing seller’s confidential details. Customers have to be aware of confidentiality and non-disclosure requirements when deciding how to use this information that’s gathered.
Timeline. Installation and setup of smart technologies takes time. Work backwards from a quote of when the technology has to be in production and fully operational (is there an approaching marketing push or spacious house, where the technology should already be on display?) , to provide the inner stakeholders enough time to develop an RFP, elicit responses and assess the options. A compressed timeline generates pressure to select a seller, undercutting a number of the advantages that have competition.
Keep in mind that negotiating the deal requires time, especially after seller down option. Factor contract discussions into the timeline. While there is an understandable urge to”get smart” when you can, hurrying the process is only going to increase the leverage sellers have. Once sellers know the clock is moving, they can utilize the clock from the client, and their best offers might not materialize when they think an eagerness to concur is trumping the dedication for locating the maximum quality offering.
The RFP method is that the opportunity to ask questions, seek clarifications, and find out what kind of spouse the seller will be. Deploying sound discussion strategies at this point is going to end in a more successful procurement process.
When Metrics Meet Commitments–Be Wary of Buzzwords
In analyzing RFP answers, it can be easy to drop sight of this”why.” The metrics that were researched during the test period and highlighted throughout the RFP process shouldn’t be lost. The glossy, glistening RFP answers could be full of buzzwords and irrelevant optional solutions, conjuring exciting dreams of a digitization overhaul. But remember that the seller is hoping to generate a sale, and buzzwords don’t always align with reality.
The buzzword trap aside, there could possibly be vendors that offer an impressive service, but the fit might not be right. The technology might have compatibility or aesthetic issues, regardless of the guarantee of exceptional performance.
Mapping the metrics driving the job to the offerings explained by the sellers is the most essential thing to consider. Cost is one metric, but remember about other variables (like security, interoperability, range of use, etc.) that will determine whether the smart technology approach is a triumph.
Looking Ahead
Once the RFP process is full along with a vendor is selected, the contracting process starts. Consider stakeholder continuity, where a few members of the group involved in the RFP carry over and are consulted throughout the contracting process. Insight into sooner business talks will result in a more successful negotiation. Stay tuned for in depth advice on the contracting process.
Smart Technology in Commercial Real Estate