Open Box Software Gives Us The 411 On Outsourcing In Real Estate

Ask most people what business Uber is in and the most likely answer will be “they’re a taxi service” or “they’re in transportation.” It's easy to see why people would think that, but Uber defines itself as a technology platform. It connects people looking for lifts with people willing to provide rides. It facilitates transportation, not provides it.

That's an important distinction. Uber's a well-known example showing how outsourcing—in this case, the physical transport of people—can be more than just a cost-cutting exercise and how, if done correctly, it can be a large driver in a company’s strategic advantage over competitors. Uber’s model has disrupted a very mature industry and it's reaping the rewards.

What does this mean for the commercial real estate industry?

To Open Box Software director of managed services Brendan Canny, it means we, as an industry, need to start looking at outsourcing in a different light, one where cost savings isn't the only goal. "Outsource the right processes and functions to the right people, and you may end up being your company’s differentiator," he says.

Outsourcing In The Real Estate Sector

Outsourcing isn't a new option for real estate businesses, but it can still be a little tricky. There are certain well-known functions that lend themselves to outsourcing in our industry, such as IT help desks, lease abstraction and administration, accounting and software development.

There are a number of advantages to outsourcing. Cost savings immediately comes to mind, and while that's a very important consideration, an outsourcing strategy can offer a number of other advantages in a real estate context if done correctly, Brendan tell us.

For one thing, outsourcing greatly improves a company's ability to scale, especially for one whose requirements are cyclical or seasonal. An accounting team hired as part of an outsourcing strategy allows a company to meet its requirements during tax season, for instance.

Outsourcing allows a company to remain flexible and current. When circumstances change, it's easier to change if you're less reliant on long-term hires.

Outsourcing also makes it easier for a company to find people with the right skill sets, which is an especially important in an information-intense industry like real estate. In traditional hiring, an employer needs to find the right skills in individuals, which can sometimes be a tall order. Outsourcing has the advantage of allowing an employer to find skills among a number of different people, and as a method of finding industry best-practice providers, the better to gain advantage over the competition. Moreover, with outsourcing, a company can focus less on repeatable operational tasks, and more on strategic endeavors.

There are a few pitfalls, however. Since one of the main goals of outsourcing is to cut costs, that can amount to a siren song that persuades a company to outsource in a way that harms quality. The real goal of outsourcing should be to cut costs while maintaining the quality of your service.

Also, it's possible to outsource the wrong functions, or lose control or accountability of a process, especially if there are too many providers doing your outsourcing. "Outsourcing, like any strategy that a business undertakes, has to be carefully planned to achieve the desired goal," says Brendan.

Open Box

Open Box has lots of experience helping real estate companies do their outsourcing in an effective, cost-cutting way that doesn't affect the quality of services. Founded in South Africa in 2001, the company began in software development for the industry, and worked its way into trusted advisory roles for some of the biggest names in the industry, such as JLL, Tishman Speyer and Kimco Realty. About 85% of its clients are US-based.

"A lot of the largest real estate companies were first exploring outsourcing around that time, so we've been with them from the beginning, seeing the pros and cons and the best practices that they've developed for outsourcing," Brendan says.

Over the years, Open Box has evolved as well. The company now has a specific division to help real estate firms develop their strategies and deal with some of the nuts-and-bolts of outsourcing, such as the management of a 24-hour help desk. Open Box offers English speakers trained in real estate terminology to avoid potential language barriers. The company also provides 24/7 support services to deal with different time zones.

Brendan explains that Open Box's long-standing client relationships "gave us great early exposure, so we can help you plan if you’re just starting out on the journey, or act as a sounding board on your strategy."

The first step is to start a conversation about outsourcing with Open Box, which is available to real estate companies at no cost to them, Brendan says. "We can add value at whatever stage of your journey."