Article written by: Imre-Gustav Vellamaa
“If your goal is to postpone launching some new technology as far as possible, delegate this task to your technical team,” was a statement—based on client meeting experience—from the legend of Estonian retail, Mr. Ants Vasar, to real estate owners and managers. After managing the most visited shopping center in Tallinn with the highest revenue per square meter—Viru Center—for more than 15 years since its opening in 2004, he jumped into the emerging world of PropTech. While on the subject: Viru Center was the first shopping mall in Estonia where an AI-powered PropTech solution was launched to control its complex HVAC system, improving indoor climate comfort and saving energy at the same time, in 2018.
What are the real bottlenecks in launching new technology?
Sure—there is never time available to do something new. I can guarantee this: time never comes by itself unless your goal is to find it. Before starting any actual implementation of new technology, it is also important to make sure these earlier stages are completed:
- Identify challenges that need to be solved (and their priorities)
- Consider suitable (technical) solutions available
Only after these do implementation-related aspects arise.
The most important – and probably the hardest – part of implementing new technologies is overcoming people’s natural resistance to change, their fear of implementing something that is not fully understood and encouraging them to take responsibility. After that, real risks need to be understood, evaluated, and managed: organizational, technological, financial, and legal risks.
Organizational risks
These involve specifying the needs and opportunities of different interest groups.
Launching any new technology requires contribution from your team. Who are the stakeholders in your organization? Are they capable of taking on this new task, and if not, what kind of internal or external support will they need? (It is perfectly fine to have support when launching something new that may be challenging even for the inventors themselves.) How much contribution – in terms of time and energy – will be needed during the launch phase and later during operations? Are there learning curves? Are there risks that your team might lose control, responsibility, or – even worse – their jobs? Do the incentives equal or, ideally, outweigh the risks for them? (Nobody has a personal interest in playing a game with no chance to win.)
Technological risks
What are the consequences if the technology does not operate as expected or even stops working?
I would place special emphasis on IT security. Of course, the most secure approach is to close all systems to external access – but with today’s technological development, you would lose your market position very quickly that way. Wi‑Fi, for example, has not been an “extra” for many years now; it has become a must‑have feature.
It is also probably impossible to isolate everything from external sources – electricity and gas supply, fire alarms, and so on. Therefore, there is no alternative but to develop together with the market (and market leaders do it even faster), including continuously improving your IT security.
This starts with internal IT security regulations – such as employee training and password policies – and extends to your partners’ certifications, server certificates, and similar requirements.
Openness to other technologies is also related to technical risks. There are many cases where companies have already invested in certain solutions and, naturally, these investments need to achieve their return on investment (ROI). At the same time, technological development is incredibly fast, and very often new solutions are far more advanced than those already in use.
Can existing solutions be integrated with new technologies, and what requirements and costs would result from that? For example, can your footfall counter data be used by AI to improve energy efficiency or to identify property locations with higher sales potential?
Financial risks
What are the financial risks? Is it possible to hedge them, and to what extent? How much investment is required? What is the expected ROI? Can technology-related fees be shared with tenants, and if so, why should they accept them? Are these fees only for cost savings, or do they provide additional benefits? Perhaps there are also new direct revenue opportunities created by the new technology.
Legal risks
What options exist to continue, terminate, or modify cooperation with the technology provider if needed?
And finally: is the technology partner ready and able to help you find answers to all these questions?
Keep in mind! Realizing the bottlenecks is just the 1st step on the road. How to overcome the bottlenecks – this would need much more than can be presented in one short article.
