The commercial real estate industry is in a period of acceleration across the board, from development, to tech adoption to major investment and M&A activity. With that comes a greater need for real estate companies to take a look at the strategies in place in response to this changing business landscape. One of the ways to do this is to ensure your executive team is well-positioned to not only advise on these strategies but execute on them, and the first position to look at is the Chief Technology Officer (CTO) role.
Before diving into the why it’s important to hire a CTO, it’s worth touching on the distinction between CTO and Chief Information Officer (CIO). The CIO role historically has served to support the business from an inward perspective, vetting new technologies and setting up networks and systems—a more traditional IT function. We’re now seeing this role migrate to CTO or similar roles, or the CTO function added as a net new position. This shift has been happening for several years now in the real estate industry, but is certainly an area that is accelerating and changing. Even in cases where the title is interchangeable, the focus of the role has changed. The CTO serves to be proactive and should be expected to set the customer and/or market strategy for how the company’s tech selections map to the overarching goals of the business.
If you haven’t already, here are four reasons why now is the time to hire a CTO or rethink the role your current CTO is playing:
- CTOs are the drivers of technology adoption for real estate companies and are critical to ensure every department is working in tandem, creating performance efficiencies rather than relying on disparate systems. With the advent of CRE tech solutions, many companies had employees making their own choices on technology in different areas so there was no cohesive strategy across the organization. This is not a sustainable practice, especially as technology becomes ubiquitous within real estate companies. So, if it hasn’t already been handled, CTOs can, and should, spot disconnected systems and course correct.
- Cybersecurity is a growing threat in the real estate industry. According to a recent research report from Deloitte, most CRE companies are inadequately prepared for the risks involved. With a CTO at the helm, companies can develop the right proactive strategies to guard against major threats. Since the real estate industry is typically decentralized, a CTO will ensure that all tech vendors have the proper security certifications, cybersecurity breach protocols are in place and as IoT in buildings continues to rise, any associated risk is mitigated.
- CTOs are best positioned to make things happen when it comes to driving the company toward its strategic objectives. There was a time when there was a big push around hiring “Head of Innovation” type roles, especially at larger organizations, but today’s CTO should encompass this persona, in addition to the more traditional IT aspects of the role. The smart CTO hire already has the strategic background and understanding of deploying tech to further a business’ goals and sitting at the executive level within your organization, they can be the changemaker a CRE company in 2022 requires.
- CTOs understand the broader issues tech can address. In addition to cybersecurity, macro trends like sustainability and ESG are becoming increasingly hot button topics and will have major impacts on the real estate industry. Having a forward-thinking CTO in place will be critical for companies keeping up with and thriving in changing environments.
Do You Need a Real Estate CTO?
If a real estate company doesn’t have a CTO in place that checks the above boxes (and more), it will be at a real disadvantage. Decision-making will be decentralized, and various tech usage will be disconnected across the organization– this directly impacts a company’s performance and financial health. With a CTO, CRE organizations will see more a structured tech buying process, and the person in this role will identify the specific criteria around the tech to make the best decisions to achieve business goals for today, tomorrow and 10 years down the road.
If you’re considering upgrading your approach to real estate technology, check out Building Engines’ 2022 Buyer’s Guide for CRE Building Operations Technology. You’ll learn the operations capabilities that truly help maximize your net operating income (NOI), along with everything you need to make an informed decision.