Lending and servicing companies operating in the competitive commercial real estate industry often face the crucial decision of whether to build their own software solutions or opt for Commercial Real Estate (CRE) software designed by specialized providers. While there are pros and cons to both approaches, this article will outline the compelling reasons why many companies are opting for CRE software instead of building their own.
1. Specialized Expertise
Commercial real estate is a complex and dynamic industry with specific requirements and intricacies. CRE software providers specialize in understanding these complexities, offering solutions tailored to the unique needs of lenders and servicers. Building a software solution in-house may require extensive resources, time, and hiring experts in various fields, which can be cost-prohibitive and time-consuming.
2. Rapid Deployment
CRE software solutions are ready-to-use, and many are cloud-based, allowing for rapid deployment. This means that lending and servicing companies can implement and start benefiting from the software much quicker compared to the time-consuming process of building a custom solution. Time-to-market is a significant advantage in the competitive world of commercial real estate.
3. Cost Efficiency
Building custom software is often a costly endeavor. It involves expenses related to development, hiring, ongoing maintenance, and updates. In contrast, CRE software providers typically offer scalable pricing models, reducing upfront costs and enabling companies to pay for only the features they need. This can significantly reduce the total cost of ownership.
4. Focus on Core Competencies
Lending and servicing companies have specific core competencies and areas where they excel. Building software can be a significant diversion of time and resources from their primary objectives. By leveraging CRE software, these companies can stay focused on their core competencies, such as underwriting, risk management, and client relationships, while leaving the software development to experts.
5. Continuous Updates and Support
CRE software providers are committed to keeping their solutions up-to-date and in compliance with industry regulations. They invest in ongoing research and development to enhance their products. Building custom software would require continuous investment in updates and adaptations, which can be both costly and time-consuming.
6. Risk Mitigation
Developing custom software comes with inherent risks. Delays, budget overruns, and unexpected issues can occur during the development process. Choosing CRE software from established providers reduces these risks, as the solutions have been tried and tested by other industry professionals.
7. Access to a Network
Many CRE software solutions offer the added benefit of connecting lending and servicing companies to a network of industry professionals, including appraisers, brokers, and other stakeholders. This network can facilitate collaboration and streamline operations, resulting in a more efficient and productive lending and servicing process.
In a world driven by innovation and technological advancements, the commercial real estate industry is no exception. Lending and servicing companies stand to gain significant advantages by choosing CRE software solutions over building their own custom applications. The specialized expertise, cost-efficiency, rapid deployment, ongoing support, and risk mitigation offered by CRE software providers are compelling reasons to opt for these solutions.
By embracing CRE software, companies can channel their resources, time, and efforts into their core competencies, while simultaneously benefiting from a proven and evolving technology stack designed to enhance their operational efficiency and competitiveness in the commercial real estate market.