Challenges with IT Entropy in Corporate Real Estate and Facilities Management (CRE/FM) Organizations

In the laws of physics, entropy is the phenomenon that drives everything into a state of greater disorder (or lower energy). According to the Second Law of Thermodynamics, the universe will always move to a state of higher entropy. If you are an information technology (IT) practitioner or a business leader, you know that this holds true for your organization’s technology portfolio as well. And, while the lessons and takeaways are general, in this article we will focus on the effects of IT entropy in the corporate real estate (CRE) space, which includes facilities management (FM). Specifically, we will talk about:

  • Causes and effects of IT Entropy
  • Remedies and benefits of reversing IT Entropy

Understanding the Important Effects of IT Entropy

Organizations that are disciplined about keeping their technology portfolio streamlined are better equipped to respond to change and have stronger capabilities overall through higher efficiency. Conversely, organizations with a disorderly technology portfolio can be burdened with conflicting or overlapping technologies that are not the best fit for enabling business processes and driving value.

Causes and Effects of IT Entropy

A typical setup of a CRE/FM organization:

Every corporate real estate organization will contain functions that consist of a combination of users, processes and tools, such as real estate operations, facilities management, capital projects, corporate services, etc. Some CRE organizations also include in their scope adjacent functions, such as physical security, mail delivery, business continuity planning, corporate travel, etc.

The technology portfolio (or landscape when depicted diagrammatically) is informed directly by the business processes within the organization. This mapping invariably is subject to change over time due to the following:

  • Different functional leaders over time will dictate the tooling for how processes are best supported
  • Reorganizations are a fact of life. These will invariably result in the scope of the CRE/FM organization being tweaked – functions may be added or removed, and this has a domino effect on the tooling as well.
  • Company M&A: This results in consolidation of corporate functions – including corporate real estate and facilities management. The technology portfolio is impacted by duplicate or redundant products.
  • Regional Selections: When a global corporate real estate and facilities management organization doesn’t act globally, regional teams are free to make independent technology decisions. These technologies, while making sense within the region, can be duplicative and redundant at the global level. This also drives up costs and can impede process standardization at the global level.
  • Vendor M&A: In the technology industry, vendor acquisition and consolidation is not infrequent. This inevitably results in certain products being marked for end of supportable life (EOSL) while other products gain prominence.
  • Strategy Shifts: Most recently, we all saw this with the return to the office (RTO) phenomenon and how many companies were investing in space reservation and occupancy analytics technologies.
  • Product Competition and New Technology Entrants: Product vendors are always looking to leapfrog one another. It’s great to be spoilt for choice, but acquiring the latest tool for an urgent tactical need can result in a lot of underused technologies over time.
  • Partial Selections: A surprisingly large number of CRE/FM organizations select products based on a limited set of requirements. This means, for example, a product with 6 functional modules might be selected for only a couple that serve the CRE organization’s immediate need. The rest of the product’s capabilities remain unutilized. Worse, additional products may be selected down the road that overlap with the 4 unused modules.
  • Vendor Strategic Partnerships: Some organizations have a policy of leveraging technology purchases from certain preferred strategic vendors. Different leadership preferences can result in a move toward maximizing purchases of a product line from that strategic vendor.

The combined effect of the above is a technology portfolio that evolves organically into an amorphous, disconnected, sprawling “hodgepodge” of different tools and technologies. This is the antithesis of what IT considers a desirable future state: one that is simplified, standardized and well-integrated.

Remedies and Benefits

So, if IT Entropy is inevitable and detrimental, what should CRE organizations and their IT business partners be doing about it?

Trascent recommends the following approaches:

Applying a Solution Mindset in Technology Selection

  • Many CRE organizations are accumulating technology products without taking a holistic approach to solutioning – how do all the capabilities work in unison? How do we enable end-to-end business processes?

Refactoring Your IT Landscape

  • At least annually, we recommend that CRE organizations refactor their IT Landscape (it’s also a good idea to revisit your data model and data dictionary). Refactoring is a standard practice in software engineering and when extended to your domain architecture, it can drive a roadmap of continuous optimizations that will help streamline your overall technology portfolio.

Centralizing Selection Decisions

  • Having an overall governance framework that centralizes and globalizes technology selection decisions is critical. This ensures that redundancies are avoided, and the entire CRE/FM organization is aligned.

Future-State Blueprinting

  • This is a corollary to refactoring. It is important to visualize the idealized end-state of logical capabilities that the organization requires. A roadmap that gets us there is a natural outcome of this exercise.

No Adds Without Subtracts

  • It is easy to get into an accumulative approach when it comes to technology. This rule, applied judiciously, also enforces the discipline to prune obsolete or overlapping products as new ones are added.
  • Revisiting and simplifying business processes. The state of technology in a CRE organization is largely reflective of how well streamlined the business processes are. The more we can do to simplify the processes, the simpler the tooling.

Leveraging Integrated Application Suites and Technology Ecosystems

  • Many CRE organizations have a tendency to purchase “one trick ponies” when it comes to technology. It is generally preferable to drive simplicity by prioritizing integrated application suites and technology ecosystems (multi-vendor technologies that work in concert) over point-products.

These strategies can be applied singularly or in combination to streamline the CRE technology landscape.

Head of Corporate Real Estate and Facilities Management Process

The resulting benefits are as follows:

  • Better support for end-to-end processes through seamless data and workflow integration
  • Fewer points of integration between systems
  • A tighter and more harmonized data model
  • Less overhead of vendor management
  • Reduced software management and administration burden (e.g., upgrades, user account management, etc.)
  • Better agility in responding to change
  • Greater overall productivity with reduced cost

In conclusion, no organization is immune to the effects of IT Entropy. And, in general, the larger and more complex the organization, the greater the risk from IT Entropy.

Fortunately, there are strategies that heads of CRE organizations can employ to achieve a future technology state that is simplified, rationalized and overall, more effective.

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