PropTech terminology – what does it all mean?
Never before has there been so much information available about PropTech. There are quite literally thousands of real estate technology providers to consider as the number of PropTech startups grows by the day. With many of them using the same PropTech terminology, it’s easy for them to blur into one.
As a result, it has never been more difficult to make a decision on which PropTech solution, or solutions, are right for your business. Before we try and answer that problem, we need to first understand what PropTech is and why it matters.
What is PropTech?
The term PropTech simply refers to the application of technology to real estate in order to raise revenue, drive efficiency, enable better service, or power transactions. Applying different technologies to different parts of the real estate industry is what gives us the vast array of PropTech solutions that we find in the market today. There are PropTech solutions that address development, construction, sales, marketing, leasing, and operations. Further, solutions are available to serve key stakeholder groups, including brokers, tenants, vendors/suppliers, as well as institutional and other investors. With a high degree of variability in operational constructs and an array of stakeholders, there are endless permutations of ownership models, operating models, and stakeholders.
In recent years, PropTech has reached new scale and momentum as all corners of real estate have modernized and automated, sought better data to support decision making, and ultimately driven NOI by adeptly applying technology to better real estate businesses globally.
Understanding PropTech terminology
One of the main areas of confusion commonly associated with PropTech is simply the language used to describe what is on offer. Terminology such as tech stack, business intelligence, and data analytics for example, is often used without clear descriptions of what it actually means in the context of the offering. With the use of these terms such commonplace, the challenge first lies in determining what they actually mean.
Artificial intelligence has nearly unlimited potential when applied to the real estate industry. From automated lease abstraction to delivering more accurate, structured data, AI-powered real estate tools can automate many of the manual processes that have been inherent in the industry for ages and give businesses renewed insights into their data to make better decisions.
Big data refers to extremely large datasets that require technology to perform analyses and decipher insights. The real estate industry generates a high volume of big data from transactions and property management activities. Typically, these data sets are so large and complex that not only would a traditional data-processing application, such as Microsoft Excel©, be inadequate to manage them, but users might not even be able to see the full picture of what data is relevant to their business and processes without PropTech.
Business intelligence is the visualization of data used to analyze, report on and optimize business decisions. With the excessive amount of data that real estate firms generate, business intelligence and analytics tools can be harnessed to yield insights that will guide strategy and increase competitive advantage.
Data analytics is the process of analyzing raw data to identify trends and patterns and inform key decision-making. Without the right tools and guidance, modern real estate professionals can face a lot of uncertainty as they attempt to extract information from the mountain of data that their businesses create.
Deep learning is the part of AI and machine learning that enables everything from practical tasks to predicting what TV series you should try next based on your watch history. It’s the “science” behind computer systems that when fed data, can make decisions about other data with the aim of mimicking – and going beyond – the human decision-making process.
Internet of Things (IoT)
IoT is the process of connecting objects and devices to the internet to enable them to “talk” to each other while being managed and monitored. For example, IoT can help property managers handle predictive maintenance on HVAC systems in commercial buildings to move toward more energy-efficient operations.
Machine learning is the subset of artificial intelligence that provides systems with the ability to adapt, change and improve without the need for human intervention. When applied to the industry, machine learning can automate manual processes in areas such as lease abstraction, lease auditing, and conversational AI.
Open and connected
Open and connected PropTech refers to software platforms designed to integrate with systems from other providers, allowing real estate companies to choose the systems that work best for their business and create competitive differentiation. The platform provider takes responsibility to manage the integrations with select third-party providers.
Open data is data available to the public that can be freely used, reused and redistributed by anyone.
Single stack software
Single stack software refers to a platform that includes all features and functionality within one system, or stack. All aspects of the platform are developed, maintained, and managed by one provider.
A technology stack is made up of the infrastructure, data, services and programming languages that power a software application. Real estate companies can evaluate PropTech providers to find the tech stack that suits their needs.
User experience (UX)
UX refers to all the touch points an end-user has with your system. PropTech software that gives staff a positive user experience with intuitive navigation will enable them to provide a better overall customer experience.
User interface (UI)
UI refers specifically to the visual part of a computer system used by the end-user to interact with the software.
Choosing the right real estate software for you
Once you have established what is available to you and what works for your business then you are ready for the next step: bringing everything together.
The ideal scenario is to choose a system capable of integrating with the best components in the market. This means you never have to compromise on functionality, allowing you to have all your preferred solutions available in one end-to-end system.
There are a number of providers who say they offer an open platform; however, it is important to closely evaluate any solutions claiming to have open architecture. Many vendors claiming the ability to integrate haven’t got the functionality to support their assertion, similar to the “cloud-washing” of products that don’t offer real cloud functionality.
MRI Software has done the hard work to assess what solutions are viable and meet real business problems. We have established a strong and growing partner program with tried and tested providers. As such, we can provide flexible, open PropTech software that meets the needs of your real estate business – today and tomorrow.