Art McCann, CIO of Highwoods Discusses Their Smart Digital Transformation Journey
Art McCann is CIO of Highwoods Properties, a fully-integrated REIT specializing in the development, acquisition, leasing and management of quality office space, primarily in BBDs (best business districts) throughout the Southeast. A 25-year business technology veteran, Art is responsible for developing Highwoods’ overall information technology strategy and aligning the company’s technology investments with business objectives.
Tell us about your technology journey at Highwoods Properties.
Seven to ten years ago, everybody focused on core ERP and making sure their budgeting system and work flow for leasing were in good shape. Over the last five years, significant money has been invested in the real estate technology space, with venture capital going into the different point solutions. Real estate can sometimes be a little slow to adopt; during a Realcomm session this year, I heard someone mention that software vendors move at 125 miles per hour while real estate companies’ adoption of technology moves at 25 miles per hour – that comment rang true for me.
At Highwoods, we've been very busy improving our digital touchpoints with customers and trusted suppliers. There are many solutions available and it takes patience and business savvy to make the right decision and investment. A good example is the investment we made in our new work order system with Building Engines. We’ve been using the software to track maintenance requests in real-time. A great feature within that program allows our customers to reserve conference rooms online. We have 30 million square feet with 250 buildings across the company. Given the number of assets, there is a lot of shared conference room space. If one building doesn't have a conference center, we can make one available at another building. They also have a great visitor management system we have deployed as well as an inspections module.
We’ve also started collecting rent via PayLink (CDI SnapPay), our fast and secure online payment portal that improves the customer experience. I think the industry as a whole is finally getting more automated and is fully adopting the online payment model for commercial real estate.
Another customer focused touchpoint example is parking systems. We’re in the process of automating parking across the portfolio to offer better customer service and maximize parking efficiency with SkiData. Often times, pulling into a parking garage is a customer’s first impression of the building, and we are striving to transform that experience with our new automated service, SmartPark by Highwoods Properties. I know the retail sector is studying the parking opportunities constantly, even more than the office sector right now. It's certainly something we're keeping a very close eye on because driverless cars and other trends will change how people consume parking in the future, and we want to be sure we react appropriately.
How much of your work is partnerships and third party and how much is internal, “We're going to build this”? How do you make that decision?
It really depends. We'd just as soon not have a custom app and servers to maintain forever. The cloud certainly offers solutions, but one has to be careful. It’s that old buy versus build decision. You want to pick a winner and not be tied to a solution that’s going to hurt the business. Lately, we've gone more with buy over build.
Right now, there’s somewhat of a functionality gap in the real estate industry: the analysis and feasibility of a development project. Highwoods currently has 10 projects and over $600 million invested in underway development. I think calculations used in the industry are fairly standard; most people use Excel. That's certainly an opportunity where we’d consider buying over building in-house. It's not super complicated; it's just a matter of a technology firm stepping up and saying this would be great for the real estate industry as a whole. We’ve recently looked at MRI’s development feasibility and this has promise.
You mentioned parking system trends earlier. What other technology trends do you see being the most important in the next five years?
Three things come to mind. Cybersecurity is first and obvious, and there are still a lot of emerging security solutions. We certainly utilize them to protect our environment. Also, we test employees to see if they're clicking on something they shouldn't with different social engineering-type e-mail tools. Our IT group also has a network engineer whose sole focus is cybersecurity, with a focus on tasks such as ensuring that connectivity with HVAC and other building systems is secure.
Second, there are a lot of cloud applications for commercial real estate being developed, solutions for any process you can imagine. The Internet of Things (IoT) has a lot of promise, but I think that whole ‘125 mile per hour versus 25 miles per hour’ applies here. I would love IoT sensors in our 250 buildings, but it would be excessively expensive and something we'll phase into new projects over time. There are many operational advantages as you deploy the IoT, but it needs to be done with caution, and with cybersecurity in mind.
The third trend over the next five years is information overload. When you have thousands of Internet of Things devices and other mountains of data, you're going to need something that translates the data into actionable information – to determine the operational action that needs to be taken. I'll give you an example of how we’ve taken the IoT and made it simpler. We have our award-winning LiveMeter program, which uses electricity meters, pulse meters, and others to monitor and track the main electrical service of the building. It's one point in the building; one sensor is sending back the kilowatts per hour to a database, so we can look at trends. Did the building turn on too soon? Did it run too late? Is it running higher than it should be, or colder, based on the temperature outside? But it's just one point in each of our 250 buildings. We have an energy center that monitors that data all the time to make sure we're highly efficient in our consumption of electricity. It's very actionable, and it's one point – not thousands of points – in an individual building. So finding the data points that will maximize efficiency is definitely something we focus on.
What is your advice for other CIOs?
Have a prioritized plan. My team and I sit down several times a year to go over all the requests, and then routinely refine our three-year plan. The first 12 months is always really solid, and then you discuss things that are just ideas for now or possible upgrades you anticipate are coming. Then, we take that plan to executive management to build understanding and consensus. You need to also ask yourself, “What's important to the company?” Development is very important to our company; leasing is very important; asset management is very important. Having the best buildings in the best locations with the best people is most important – technology is just the glue that keeps it all together.
How effectively we can help the building process, the property management process, and enhance our customer experience, is what’s going to get management excited about implementing technology. Be an evangelist of the things you consider important and beneficial for the company. I'm blessed to work with a great technology team and have an executive management team who embraces technology. They see value in having the tools that can make business better.
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UPCOMING REALCOMM WEBINARS
The Cloud, IoT, Sensors and More – The NEXT EVOLUTION of Smart Connected Buildings - 4/4/2019
The concept of smart buildings has been around for decades. What’s different now are the multiple generations of technology we have seen throughout the years. At first ‘building automation’ was proprietary and single-source, next came ’connected’ buildings which introduced us to the internet. Today, next-level thinking includes an expanded use of the cloud, the inclusion of non-traditional smart edge devices found within the Internet of Things (IoT), sensors, as well as integration into ERP’s other single purpose solutions and multiple telecommunication platforms. While the benefits of a smart connected building are great, the path to success is elusive. This webinar will feature the industries’ most accomplished smart building experts.
Tom Shircliff is a co-founder and principal of Intelligent Buildings, a nationally recognized smart real estate professional services company that was started in 2004. Intelligent Buildings provides planning and implementation of next generation strategy for new buildings, existing portfolios and urban communities. Tom is a speaker and collaborator with numerous universities and national laboratories, a gubernatorial appointee for energy strategy and policy and founding Chairman of Envision Charlotte, a Clinton Global Initiative.
Paul Maximuk is Energy Manager for Ford Land Energy where he is currently is providing project and program technical guidance to implement global metering of electric, natural gas, steam, water and compressed air systems. He is an Energy Engineer with over 30 years of experience in the HVAC/BMS field. He is an SME specializing in building management and energy reduction. Paul has focused his efforts in large industrial facilities but also has equal expertise in Class A buildings. Additionally he is a problem solver finding the root cause of why mechanical systems do not operate at their peak efficiency.
Gordon Echlin is Vice President Marketing and Business Development for Triacta Power Solutions LP, where he has been a management team member since 2009. Prior to Triacta, Gordon was a partner for a boutique venture capital firm, Venture Coaches from 2006 to 2009, and started a telematics company, Netistix Technologies, in 2002.
As a Senior Strategist for Aruba, a Hewlett Packard Enterprise company, Chris Fine is focused on Aruba’s Smart Digital Workplace initiative. The Smart Digital Workplace combines Aruba’s industry-leading networking technology and a growing ecosystem of partners in technology, real estate, smart furniture, and other specialties, to drive the growth of new experiences for end users and managers in the next gen Smart Office.
Rick has more than ten years of experience in technology and intelligent building engineering. Prior to cohesionIB, Rick served as the Senior Practice Leader at Environmental Systems Design in the Intelligent Building group. He led the technical design of global intelligent building and smart city projects in cities around the globe. He is passionate about designing digital solutions for the built environment that improve the experiences people have and foster the culture around them.
Anne is a high-tech executive with broad experience, starting from software design, architecture, cybersecurity, to managing teams to release telecommunications and enterprise software, building and leading research labs, managing developer relations, and initiating and driving cultural changes. She worked for over 10 years at SAP successively as Director of Security and Trust Research, VP of Platform Research and VP of Developer Advocacy. More recently she co-founded and became the CEO of Workrize PBC.