For too many years the commercial real estate business has depended on systems, processes andstructures that create isolated pods of information. While they have well served immediate needs and performed the functions as designed, because their data structures are proprietary in most cases they did not, and still do not, allow for easy exchange of data with other tools, applications and systems.
Additionally, as the industry has evolved it has adopted a predominately institutional set of parameters for valuation, financial analysis and investment modeling. This has forced those of us who serve commercial real estate to re-think data definitions, data flows and integration processes.
The goal for many software developers has been to bring to market systems that enable data users to benefit from a single-point of data entry and multiple-use functionality. We are beginning to see concentrated efforts at developing these functions. Though it has taken a number of years, there is a good chance that we will soon be able to port data from system to system, product to product, using tools developed for this purpose. ARGUS Financial Software has taken the lead in developing such applications and will continue to insure that all of its products allow for programmed data integration with the systems most used by the commercial real estate industry.
Unfortunately for real estate software developers (and their clients) in the United States, there is no single, documented standard for data exchange. However, it is encouraging to note that an attempt at creating a single standard is well underway in the United Kingdom which could serve as a business model for the rest of the world.
It is called PISCES, which stands for Property Information System Common Exchange Standard. The goal is to provide an agreed upon standard that will be used by property management, real estate accounting, asset management, valuation and investment modeling products. It is being developed with the advice and participation of a diverse group of industry-leading companies, some of whom are competitors. Of course many of the data elements are specific to U.K./European terminology and would not be applicable for the United States, but at least a standard is being developed. Wouldn't it be nice to see the same effort on this side of the pond? ARGUS Financial Software has already begun planning the methodology, data structures and processes that will first enable its international versions, then all of its products, to talk to applications compliant with thePISCES standard.
Software vendors must, of course, build products that meet the needs of their customers. However, it is how these needs are communicated or researched by the developer that can mean the difference between a successful venture or a misguided product. In addition to user-group meetings, or the occasional e-mail, fax, meeting or conversation, there needs to be a properly planned research effort by the software developer. Many times it requires educating the customer as to how to present an idea or describe a requirement. Not only is it important to provide a well-prepared narrative describing the concept and intended use of the feature or function, but the math, a spreadsheet example of the calculation matrix and the desired report, and any recommendations for data input that matches the work flow of the user are needed by the software developer.
At ARGUS, we are studying the specific needs of each real estate industry segment - REITs,, loan origination, development, valuation, lease analysis, lease administration and processing, underwriting, corporate real estate, portfolio and single-property acquisitions/dispositions, due diligence and more - to efficiently anticipate the requirements our customers and prospects will want us to meet. Market research also must be part of any research initiative to better understand the trends that will shape the commercial real estate marketplace in the future.
In general, we in the software business must all be prepared to more effectively use the power of the Internet, browser applications and telecommunications data throughput within each of our products. A variety of new technologies are available for not only delivering data files but also for hosting applications on-line.
At ARGUS we are experimenting with many new automation, data integration and report generation tools. Combined with user-friendly interfaces that provide for intuitive data input, a design based on "ease of use," and customer-driven business rules that enforce naming conventions and other disciplines on software usage, there is a good chance we will see a more efficient marketplace that is better understood by outside analysts. However, a concerted effort by industry leaders, trade associations and product user groups to develop and enforce data standards, common integration methods and endorsed analytical processes is necessary to truly benefit from all that is available today.