Evan Nardone asked a great question as part of a recent LinkedIn conversation.
He asked: “How do you envision the [security industry ROI] story from a more PropTech perspective and less services?
Short answer: It depends on who in proptech you are presenting the information to. Flexing your answer based on metrics driving their decision-making process is nuanced and essential.
I will focus on owner/operator/developer and commercial real estate for this answer.
As I’ve dug into security and proptech, I’ve put a lens on from the customer’s POV to see how we are positioning ourselves. Recently it’s become apparent that there is a language barrier around what the customer values and what we are selling as value.
Environmental, social and governance (ESG) is an excellent example of a message the majority of our industry is not addressing, and if we are, it is primarily from a manufacturing and materials perspective. Not to downplay that impact, as it is impactful, but it does not address other aspects, and frankly, opportunities, that ESG provides our industry and is represented well by other utility industries in buildings (such as HVAC and Lighting). Recently I posted a thought I am working through in my head and asked a question on LinkedIn asking if the security industry is missing an opportunity by not having a more significant ESG message.
As he always does, Evan Nardone had some great feedback and moved the conversation further by discussing return on investment (ROI). A part of ESG is the ability to quantify investments in technology, processes, and systems. Most of our industry focuses on total cost of ownership, which focuses on understanding the short-term and long-term costs of technology, processes and systems. See the difference? It is very different, and this is where I believe we need to mature our conversations as we verticalize our offerings.
Evan asked: “How do you envision the story from a more PropTech perspective and less services?”
Great question. And again, putting the proptech lens on with two feet planted in the security industry, here are my thoughts: What I have found through conversation and research are metrics that commercial, owner-operators and developers look at as success metrics. Please remember that this list is not exhaustive, and I believe the criteria constantly evolves.
Using these metrics, we may answer Evan’s question and help frame the ROI story by looking at what value security brings the proptech vertical.
I found this blog post by iOffice + SpaceIQ that was very relatable, as iOffice + SpaceIQ overlaps heavily with our industry.
The nine crucial corporate real estate metrics as per Rebecca Symmank are:
- Cap rate
- Total occupancy costs
- Percentage of revenue
- Rent, utilities and employee costs per square foot
- Space utilization
- Annual headcount by building
- Occupancy rates by floor
- Average service request response time
- Average check-in times
There are a couple of questions that come to mind:
First, do our security solutions impact or have a story to support any of the metrics above? If so, which, and what is the story?
Still, it does beg the question, what metrics should we align and promote as an industry?
I still have work to do to have my answer, but I do know this:
The ROI story will not be solved by one person or company. Instead, the ROI story will be solved by a community and industry coming together and aligning on the methodology, putting it into practice and sticking with it.