Soon after the pandemic started in the United States in 2020, many businesses rapidly sent their employees to work at home. The situation was urgent.
There was very little time for companies to study the technology needed to pay bills on time and make sure their employees remained productive.
These frenetic and unusual circumstances drove the rapid use of second-layer, add-on technologies – many powered by automation.
Automation became so pervasive it emerged as arguably the single most important trend in the real estate industry during the health crisis. The pandemic accelerated automation adoption by roughly three to four years.
More businesses adopted automation for two main purposes: to run their businesses more efficiently and remotely and serve vendors and suppliers with what they needed to get paid on time.
Rapid embrace of second-layer tech
As this health crisis unfolded, an interesting dynamic took hold. Real estate companies weren’t especially interested in making major technology changes to the core engines that run their businesses. It was too time-consuming and risky of an undertaking.
However, they realized they had to adapt quickly by starting to use easily integrated, second-layer technologies such as accounts payable (AP) automation software to keep operations going with remote workforces.
These second-layer technologies helped bolster their accounting systems with faster, more secure and more reliable processing of invoices and payments.
Suddenly, and on a massive scale, businesses made necessary technology investments. A widespread uptick in the number of real estate companies who started using AP automation software took flight. Corporate conferencing software also became hugely popular.
An article titled “COVID-19’s Impact on Real Estate Markets” further explained the impact technology had and stressed the need for artificial intelligence, machine learning and data analytics.
An AvidXchange survey of real estate pros revealed similar trends. Among those actively considering an AP automation solution, nearly two-thirds (62 percent) noted they’re likely to adopt it within the next year.
Aligned with this, nearly half (48 percent) of survey respondents were actively or passively considering an AP automation solution in 2020, up from 39 percent in 2019.
Change in attitudes about real estate technology
The pandemic also caused a change in attitudes towards technology. AP automation quickly shifted from a service real estate finance pros were interested in to one they couldn’t do without.
The industry’s de-centralized structure was an additional dynamic driving the growth in use of automation.
It’s common for property managers working for one company to be dispersed throughout hundreds of property units across multiple states. Yet they still have paper invoices and payments that have to be processed and paid on time to avoid late fees.
During the pandemic, automation consolidated these payment systems in one place where finance pros and property managers could easily access to see the status of arrivals, approvals and payments of bills; and, importantly, make on-time payments electronically.
This all-in-one-place benefit reduced complexity. It eliminated the need to manage all these financial transactions separately from each individual office burdened by the inefficiencies and insecurities of paper checks.
Despite a dispersed workforce, the business still operated smoothly because property managers could also do these transactions from their homes or corporate offices. With centralized, automated systems, companies could keep running smoothly.
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Real estate technology adoption will have staying power
The rapid use of technologies during the pandemic is likely to have staying power. I don’t believe there’ll be many people regretting these investments. Technology is a one-way street. Once people get a taste of the benefits of technologies, they rarely stop using them and go back to previous, less-advanced processes.
But there’s still progress to be made. I’ve seen a tech gap with remote employees on conference calls with people in the office in meeting rooms. This experience is often disjointed and not as effective as it could be. Audio levels aren’t good enough for people at home sometimes, for example.
It’ll be key to develop technologies soon that close that gap for these inevitable and continuous calls in the hybrid work environment. Out of this will merge a whole new stack of technologies to offer a more powerful meeting experience over the next few years.
Tech trends of the future
But what technologies are coming down the pike? In our survey we asked real estate pros what real estate tech will be brought to market over the next five years. Multiple integration tools made the list.
Respondents cited technologies that better integrate accounts payable, accounts receivable, treasury and construction management software systems; and improved integration of the entire process from first contact, leasing, communications and process returns.
Beyond integration tools, respondents cited other technologies including customizable cost coding and budgeting software; more affordable construction tracking, asset management and investment management software; and predictive analytics tools to forecast where rents are growing.
Automation creates differentiation
Why is all this so important? Because automation and other advanced technologies help differentiate real estate companies from those that don’t. It gives finance pros new and easier ways to serve and support customers, vendors and suppliers and eliminate the sluggishness and unreliability of paper processes.
Automation also makes employees more pleased because they’re liberated from manual tasks so they can sharpen other, higher-value skills such as financial analysis and reporting.
The benefits of automation are not exaggerations; they’re real and can be measured. And efficiency is a big reason to make this transition, we found out from our survey.
Nearly three-fourths (74 percent) said they’re considering an AP automation solution to increase overall efficiency – the highest percentage of all reasons considered.
Tech adoption doesn't have to be hard
There one’s final point I want to make about the positive affect technology had in this market and finance pros during the pandemic — one that’ll persist into the future.
Because the crisis hit so fast, companies didn’t have long to think about whether they were ready to shift to automated processes. They just did it – in some cases virtually overnight and without much research.
And most found out it’s not as difficult to use technologies as they may have expected. This bodes well for the technology and real estate industries.
It means finance pros and others in this industry will be more open to investing in technologies that help them operate more efficiently to grow their businesses.
About the author
Brian Thayer is the vice president of sales for the AvidXchange real estate business. Brian has worked with hundreds of real estate companies over the years, helping them evaluate and implement automation solutions. He is passionate about helping businesses become more efficient, reducing their environmental footprint, and positioning them for future growth.