Wild parties were the norm at last year’s PikeNet conference. But this year, property e-commerce players soberly focused on basics. By Helen Osborne
The event: PikeNet 2001 conference on the impact of the web on property. The venue: Palace Hotel, San Francisco. The mood: Restrained. A year ago, agents at PikeNet were preparing for slaughter at the hands of multi-million-dollar-backed dot.coms. But since the dot.com clear-out, this year’s event was notable for its absence of lavish parties.
The opening session set the solemn tone, as a Gomez/PikeNet survey of property professionals from all facets of the industry revealed that 85% of respondents said that less than 10% of their customers came from the internet. Only 30% believe that more than half their clients will request internet services in the future.
Transaction management woes
Transaction management was a main concern, as a mere 30% of respondents said they intended to use TM tools for workflow, even though it is claimed that these could streamline property sales and leasing.
Even the property listing sites were unexcused. Although 63% of respondents access these sites, the majority voiced concerns about accuracy of information.
Another feature of the event was Pike’s Picks, which involved dot.coms making two-and-a-half-minute presentations. One by one, nervous chief information officers and heads of sales scrambled up the platform to tell a sceptical audience just what made his or her firm stand out from the crowd. Many barely sounded convinced themselves.
As one attendee noted: “If nobody adopts these guys, they’re not going to be around.”
The three-day event revealed the extent of confusion over which site to choose. Points of difference between the dot.coms seemed to be negligible.
And speaker John Hagel, author of Net Gain and Net Worth, had some startling predictions: e-business will have a marginal influence; traditional approaches to strategy will be required; e-commerce will restructure business, but will this will take longer than most people are willing to acknowledge.
However, it was not all bad news. Hagel believed that dot.coms still provide a credible growth engine: “The market is saying to traditional companies, ‘If you are focusing on profitability, think again. We want growth.’”
The internet has, to date, played a minor role in deal-making, according to panelists on the Owner’s Perspective session, but it was recognised that the internet will ultimately enhance business, speeding up transactions by an estimated 10%.
Emphasis on systems varies by company, said the panelists. For Lincoln Property, the portal concept takes centre stage. Divco West is looking at building management tools Egg Systems and Corrigo, while AEW eyes the Myers Group and CoStar.
Look to the long term
And few owners expect short-term riches. Phil Dixon, CEO of Colliers International, said: “Transformation takes time. We’re where the steam engine was in 1940. This is not a five-year window but much longer.”
Spending is now more pragmatic than frenetic. Tom Falus, president of Cushman & Wakefield’s Strategic Ventures Group, said: “We’re shy about investing but not about partnering with people with significant investment behind them.” And he added: “It is starting to pay off. We won an account because we took along a technical partner that could deliver for the client, but that’s not everyone’s cup of tea.”
Chairman of CB Richard Ellis, Brett White, has also found that the client leads the way: “We’ve lost some pitches because people didn’t like us using technology and others because we’re not using enough.”
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In search of an industry leader – Will Octane set the standards? |
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The feeling that Octane and Constellation will set a direction hung in the air at the conference -but some delegates were not convinced. “How will Octane [a consortium backed by CB Richard Ellis, Jones Lang LaSalle and Trammell Crow, among others] make the companies it has invested in successful and take things to the next level?” asked Stephen Pilch, chief operating officer of Divco West Properties. Delegates may disagree about what company should lead the industry, but it was obvious that e-business needs leaders. Frank Wuest, principal of AEW, said: “Standards don’t have to be the best, they just have to be the standard.” While Constellation appears to be on hold for the moment, receiving the briefest of mentions from its investors, the outlook for Octane is set to be more long term. The approach, according to Mark Rose, chief innovation officer for Octane backer Jones Lang LaSalle, combined optimism and caution: “We’re all doing the right things. Whether the NASDAQ is up or down is irrelevant.” He added: “Attempts to change behaviour and get firms to do business over the web are difficult and will take seven to 10 years.” So why not invest in people to use what is already in place rather than continue to do so in software? Expectations are high and Rose argued that, should innovation stop, Octane will be harder to deliver. Sven Pole, who manages Trammell Crow’s involvement in Octane, stressed that money must be spent on increasing adoption. Octane’s backers term it “a gift to the real estate industry”. Rose said: “We are funding it, and we are the revenue stream. Some of us want a non-profit-making organisation, a utility.” Although the procurement element, SiteStuff, has been decided and its transaction management element will be WorkplaceIQ, the decision about a listings service is less certain. Octane is considering sites that combine transaction data and listings. Rose said: “We are launching initiatives we hope will be industry standards. We want to embark as an e-community rather than be a service provider. No venture capitalists will be involved. It will be funded by the companies involved.” The objective, he said, was to create a knowledge platform that would make people more productive. |
Ways to increase e-commerce usage among businesses was the overriding theme of the conference, particularly for transaction management platforms. Despite the results of the Gomez/PikeNet survey pointing towards a lack of take-up, larger firms are giving these systems high priority.
Colliers International is selecting a system and Cushman & Wakefield is launching BIG, with the objective of creating uniformity in business practices.
For smaller firms, online transaction management is still under evaluation. Frank Wuest, principal of AEW, said: “It is still early for adoption in the industry. Part of the question is, who’s going to survive? We are taking a long look at the situation.”
Asked about the factors that define survivability, he replied: “Does the company have customers, revenue and cashflow? The old-fashioned indicators are the key.”
Divco West’s Stephen Pilch added: “You don’t want to feel stupid twice. You believe each company that says, ‘I’ll be the winner’.”
He hopes Octane and Constellation will add a better service by combining systems. “I don’t want to talk to a listings guy and a transactions guy – there are too many people out there,” he says.
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The audience fired questions at a panel comprising Business Integration Group, MyContracts, National Facilities Group and VirtualPremise: www.mycontracts.com integrates contract management, benchmarking and e-procurement www.virtualpremise.com aims to provide solutions for companies that occupy multiple locations www.big-e-realestate.com, backed by Cushman & Wakefield, is a B2B and back-end office service. |
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Q: How do we get assurance that you’re there for the long haul? BIG: The database remains yours should we go out of business. VirtualPremise: If something happens, we make sure clients can set up and run the application themselves. MyContracts: The best thing you can do is see how long companies have been in business. Q: How customisable is the screen? NFG: You can put any information on every application. VirtualPremise: It is configurable from a style perspective. Q: What makes me more efficient using your products rather than using an internal system? BIG: It depends on the approach to business. You need to look at who the client is. VirtualPremise: It doesn’t matter what service provider you use, so long as you can share information with other service providers working with your client. Q: Why is adoption so slow and what is the biggest hurdle to fully integrated single-level platforms? BIG: Politics. People don’t talk. Most corporate real estate people don’t know how to talk to IT people. MyContracts: The question in the beginning is, what is this? It’s an education process. We’re starting to see acceleration in adopting this product. Q: Will you be integrating with listings? VirtualPremise: We are talking to listings services now but we haven’t had a lot of clients demanding that we do so. MyContracts: We are currently in the early stages of relationships with a number of listings services. |
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Soundbites: experts offer their views “We haven’t developed our own transaction management system, but have used several from outside, such as Global Services Group.” Jim Leslie, Staubach “In the past we have used MyContracts, but the grand strategy is Octane. Octane is careful to be pragmatic, getting away from bell-and-whistle applications. Right now, we need pragmatic tools. Octane will deliver that vision.” Brett White, Americas, CB Richard Ellis “We use Virtual Premise and have looked at MyContracts, but can only guess which one will be successful.” Phil Dixon Colliers International “We’re trying to establish our own style. We cast our lot with Zethus and that went down in flames. Octane is now pursuing something identical to Zethus. We’re looking at that as a possibility but have concerns. We’re still licking our wounds from Zethus.” Tim Falus Cushman & Wakefield |
