by Rob Murchison

Introduction: The Overlooked Opportunity

Labor productivity in the U.S. construction sector has declined at an average rate of 1% per year between 1970 and 2020 (see Figure 1), despite nearly eightfold growth in capital investment over the same period. As an owner or investor in commercial real estate (CRE), you understand the pressure to deliver projects on time, within budget, and without complications. Yet, there’s one critical component often relegated to the sidelines during construction handoffs: building technology. Far from a mere detail, building technology has the potential to either simplify or complicate your operations—yet it’s often an afterthought of the project. The result? A barrage of change orders, bloated budgets, and operational inefficiencies that could have been easily avoided.

Figure 1: Labor productivity in the U.S. from 1970-2020

The Technology Blind Spot: Overcomplicating What Should Be Simple

In the rush to complete construction, building technology frequently becomes an afterthought—introduced too late in the process to be effectively integrated. This oversight turns technology into a source of complexity rather than a tool for simplification. Systems don’t align, data doesn’t transfer seamlessly, and suddenly, you’re faced with an avalanche of change orders that disrupt your timelines and inflate your costs.

Consider this: While your project may not grind to a halt because of the tech infrastructure’s incomplete design or installation, the resulting change order results in unneeded resources consumption and delays. These problems are not just minor inconveniences—they’re red flags that indicate a failure to simplify the technology complexities from the start.

The Hidden Costs: Change Orders That Could Have Been Avoided

The words “change order” are something every head of development and property management dreads. They indicate unexpected delays, extra costs, and the possibility of missed deadlines. In the realm of building technology, these change orders typically happen due to poor planning and coordination, stemming from a lack of understanding. These problems crop up when technology isn’t given enough priority during the planning stage, whether it’s due to overlooking integration points or having a misaligned system.

The financial impact is staggering, with bad data alone being responsible for 14% of rework that estimated to cost the global construction industry $1.8 trillion in 2020 alone. Change orders inflate your construction budget and eat into your operating margins. And the worst part? Most of these change orders are entirely avoidable if building technology is addressed early and systematically.

Simplifying Complexity: The Key to Seamless Handoffs

The solution is treating building technology as a strategic asset, not an afterthought. Simplifying the complexity of technology integration can prevent a cascade of issues later on. Here’s how:

1. Early Involvement of IT and Operations Teams: Involve your IT and operations teams from the beginning, ensuring that technology requirements are baked into the design and construction processes. This proactive approach minimizes surprises and change orders down the line.
2. Comprehensive Technology Roadmap: Develop clear technology roadmaps that outline the systems and integrations needed throughout the building’s lifecycle. A well-planned roadmap simplifies the complexity of technology integration, making the handoff process smoother and more efficient.
3. Standardized Data Formats: Ensuring that all systems use standardized data formats can prevent compatibility issues and streamline the handoff process. Simplified data management means fewer headaches during the transition and fewer costly surprises after occupancy.
4. Continuous Communication: Keep lines of communication open between construction, IT, and operations teams. Regular check-ins ensure that any potential issues are caught and addressed before they necessitate costly changes.

The Trillion-Dollar Question: Can You Afford Not to Simplify?

In today’s competitive CRE market, the ability to manage complexity—particularly technological complexity—can make or break your bottom line. The companies that excel are those that recognize the power of technology to simplify operations, not complicate them. They avoid the costly change orders that come from neglecting technology, and they deliver assets that operate smoothly from day one.

So, ask yourself: Can your portfolio afford the ongoing costs of sidelining technology? The answer is clear—simplifying technology integration isn’t just smart; it’s essential for protecting your assets and maximizing returns.

Conclusion: Time to Rethink Your Approach

Building technology should never be an afterthought in the construction-to-operations handoff. By addressing it early and simplifying its integration, you can avoid unnecessary complications, reduce costs, and ensure that your assets operate at peak efficiency from the moment they open their doors.

Asset managers, heads of IT, and facility managers must rethink how to approach technology. It’s time to stop treating it as a secondary concern and start recognizing it for what it is: a critical element that can drive value, streamline operations, and safeguard our investments.

Closing Thoughts: Leading with Simplicity

Looking ahead, the most successful CRE owners and investors will be those who master the art of simplifying complexity. By prioritizing technology integration, they will avoid costly errors and ensure their properties are not just functional but future-proof. Let’s lead the industry in making technology an integral, simplified part of every project handoff—because, in the end, simplicity is the ultimate sophistication.