Commercial Real Estate: Time for real estate companies to take a hard look at technology budgets

For much of the real estate industry, new technologies have been viewed as minor annoyances - unnecessary distractions to a well-oiled machine. After all, why allocate capital to a new digital infrastructure when you can just, you know, buy a new building? By way of background, 80% of standard IT budgets are allocated to maintenance - that is, upkeep of servers, storage and network devices. Meanwhile, only 20% is typically allotted to growing the business through analytics, corporate finance management and business intelligence. Thankfully, there are signs that a paradigm shift is around the corner. In a recent survey of top executives by technology research firm Gartner, the majority of respondents said that their company needed improvement in both "facilitating analysis and decision making" and "ongoing monitoring of business performance." As CFO of GFI Capital, a multifaceted real estate and investment firm, I'm working to nudge the classic 80/20 IT budget to a 50/50 split between maintenance and business analytics. Indeed, this means allocating significantly more capital to our technology initiatives - a concept at which many C-level real estate executives have historically balked. But, it's becoming clear that the long-term benefits of creating a sophisticated cloud-based infrastructure to create and share information in real-time far outweigh the upfront costs. Try as it might, the real estate business landscape will be hard-pressed to avoid this new technological frontier. Without adapting to the modern demands of a wide-ranging approach to data collection, real-time communication and social media, it's unclear whether a real estate firm can excel in such a frenetic market. Simply put, it's time to rebalance the technological budget. Jennifer McLean is the chief financial officer at GFI Capital Resources Group, New York, N.Y.