What Brokerages Need to Know About Software Integration 1

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What Brokerages Need to Know About Software Integration

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With today’s increasing reliance on cloud technology, software integration is becoming much more available. It touches nearly every industry; retail, automotive, construction, information technology, manufacturing, and so much more.

Real estate is no exception.

This increase in availability has made it easier for all kinds of software tools to become “plugged in;” they can share information between themselves. But just because these talkative tools are more widely available doesn’t mean they’re widely used.

Businesses across all industries continue to avoid integrated tools—or at least misunderstand what they can do. These tools hold the power to reduce redundant and time-consuming workflows, which in turn can improve potential business growth and bottom lines.

Let’s have a look at software integration—what it is, why it’s needed, and what it means for your real estate brokerage.

What Brokerages Need to Know About Software Integration

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What Is Software Integration? ................................................................. 1

Silos: What Happens When Programs Don’t Integrate ............... 3

How Does Information Get Siloed? ....................................................... 4

What Are the Effects of a Siloed System? ........................................... 5

What Does Software Integration Do Differently? ......................... 7

The Value of Software Integration for Brokerages ........................ 8

Table of Contents

What Brokerages Need to Know About Software Integration 1

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What Is Software Integration?Software integration is the process of taking a number of individual programs and putting their functions together to make one coherent multifunctional system.

Where Did It Come From?You might think it’s a buzzword in modern technology, but it’s actually been around since the early days of computers.

Back then, programs were more complicated; when each program used its own unique set of keystrokes, it was tricky for a user to master more than one or two programs. Everyday tasks in a real estate brokerage, like data entry and calculating commissions, would have been an absolute nightmare.

Integration was introduced as a way to simplify these programs for users by taking the essential functions, and restructuring them to act as a bridge between incompatible programs. This made these programs both easier to use, and less time-consuming.

How Does It Work?There are a few ways to build an integrated system for a real estate brokerage.

Original ConstructionIn many cases, programs are built from scratch with the intention of combining functionalities of multiple different programs. This new program becomes a single solution that addresses a few pain points, and is in and of itself an integrated system.

For example, a program that uses original construction integration for a real estate brokerage might combine tasks like accounting, commissions, agent management, and audit records. That way, the brokerage could use one program instead of needing four.

This style of software integration offers a smooth workflow for its users, and sets a solid foundation for future updates and additions.

APIsApplication programming interfaces, or APIs, are sets of protocols that allow existing programs to connect and communicate, and skip the time-consuming process of reconstructing programs to work together. They work much like a travel adaptor; an American-style plug might not work in a European outlet on its own, but with an adaptor, it works perfectly.

Software Integration:combines functions in a single system

enables users to master programs

makes tasks like data entry easier

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Especially in evolving industries like real estate with increasing numbers of tools available, APIs are a useful and flexible solution to the problem of software integration.

The One-Size-Fits-All MythBoth techniques have their strengths when it comes to software integration, but it’s important to remember that there’s no such thing as one solution that will solve every need that every individual real estate brokerage will have. There’s no way you can possibly anticipate every need your brokerage will ever have, but a bit of research will give you an idea of the most common needs—and how to address them before you even get started.

An integrated system in a real estate brokerage needs to cover a wide workflow, and while that workflow isn’t the same for every brokerage, there are some commonalities.

The concept behind connecting the tools your brokerage needs is to create one strategy that fits your business style. When you’re picking your solutions, it’s important to look at the big picture: What will solve the entire workflow, instead of just a piece of it?

There are options out there that will solve nearly every need that the majority of brokerages have, and a bit of research can mean the difference between a system that works and a patchwork system that may not scale with your team.

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Silos: What Happens When Programs Don’t IntegrateWhen you use multiple tools that don’t work together, your information goes into an information silo—which can be a troublesome thing for your brokerage.

What Is an Information Silo?An information silo, or data silo, is a term coined to describe what happens when a business experiences data isolation.

It describes a system that can’t integrate or communicate with any other systems, making it difficult or impossible for it to work with unrelated—or even related—systems.

How Do They Work?Imagine your brokerage’s information as grain on a farm. You have two silos to put that grain in, and you put the exact same type of grain and the exact same amounts into each silo. Now, those two silos might hold the same thing, but that doesn’t mean they are the same thing. They aren’t interchangeable. You can’t put a bit more into the first silo, and expect the second one to suddenly have more, too.

This is exactly what happens when you put information into two unintegrated programs. That information becomes secluded; it exists on its own in a hermetic environment. No matter how much you put into one of those silos, it will have no effect on what’s in the other silo.

Why Are They Bad?Information silos have a habit of stunting a business’ growth by preventing the ability to make informed decisions.

In addition to preventing you from data mining, or searching through your existing data for meaningful insights, they also create the need for duplicate data entry, and open the door for inconsistencies and errors in your data. This, in turn, can affect your ability to assess the current state of your brokerage.

And the chances of these issues happening only increase for every silo you have.

In a recent survey, 36% of brokerages

said data entry is their most

inefficient process.

Source: The State of the Brokerage Report

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How Does Information Get Siloed?When information ends up in silos, it’s usually a gradual and subtle process. You may not even know it’s happening.

This is the general process:

First, a new real estate brokerage will install a generic and easy-to-use accounting program to manage its bookkeeping.

From there, that brokerage will add a new tool or process every time it discovers a new need. Entering listing data multiple times? Time to add an MLS feed. Tracking transactions? Time to create another spreadsheet. Reaching agents out of the office? Time for an intranet.

All these additions really add up.

When systems evolve over time like this, the individual pieces may not talk to each other—and when that happens, they create a tunnel-vision effect. That brokerage, which was just starting out, is now locked into its short-term goals—and in the mess of applications and tactics, it becomes impossible to see what it could be doing on a long-term scale.

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What Are the Effects of a Siloed System?You may not notice them at first, but several things start to develop when your system is separated into silos.

Lost ProductivityAn unintegrated system affects all levels of your staff. When your team is bogged down with things like duplicate data entry and disjointed processes, they can’t focus on their more important duties. Your administrative staff finds it needs to input data into both the accounting program and the transaction management program, for example, and since neither one integrates with the MLS, it all has to be done by hand.

They also increase their chances of typing errors. After all, all it takes is to miss one number in one program for a data issue to happen, and then you have to trace it back to its roots.

Lost VisibilityAs a Broker/Owner, you want to know what’s going on in your brokerage as it happens. It’s difficult to get a clear view of what’s going on if you need to look at and compare multiple databases! This also makes analysis difficult for your staff, because in order to generate reports, they need to compare that data manually before you ever see it.

Unexpected CostsGenerally, when companies end up with patchwork systems, it’s because at some point, they made a decision to find a more affordable solution instead of picking an all-in-one system with a higher up-front cost. These patchwork systems can come with a surprising, invisible long-term price tag that should be considered.

Talking to Clients

Writing Emails

Entering Data

Prospecting/Researching Leads

Internal Meetings

Scheduling Calls

Source: HubSpot

Talking to Clients

Writing Emails

Entering Data

Prospecting/Researching Leads

Internal Meetings

Scheduling Calls

Harnessing the power of data and business insights is an imperative for real estate companies.

Source: Emerging Trends in Real Estate 2018

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Data EntryWhen a real estate brokerage implements a system that runs a few different tools simultaneously, the administrative staff sometimes has its hands full keeping up. As the brokerage grows, and it starts hiring more agents and having more information to keep track of, it finds that it needs to hire someone specifically for data entry.

In fact, according to a recent survey, over 50% of brokerages hire new staff in response to extra data entry caused by an increase in transaction volume.

Sure, you could easily justify the cost of hiring that person as team growth—but when there are options out there that simplify your workflow so you don’t actually need that new data entry specialist, it really should be looked at as a subliminal cost of those less-expensive solutions the brokerage chose to save money.

IT SupportIf a brokerage that implements a patchwork system has its own IT support, then that team will need to spend more time working on the system. They’ll need to manually integrate, maintain, update, and manage licenses for all of the involved applications on multiple devices just to keep the system running smoothly.

In a study of over 900 U.S. companies, participants said they have an average of 6 different sales tools for each rep they have.

That adds up to $3,894 per year—per rep.

Source: Sales for Life

Source: The State of the Brokerage Report

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What Does Software Integration Do Differently?A good system that makes the most of software integration functions like its own internal team.

Each part of the system will “talk” to the other parts, pulling your data out of its silos and making sure that every part has the data it needs. Instead of your team playing a complicated game of telephone between different programs, these programs work together by themselves.

The benefit for your brokerage? Your team can stop working for your system, and start working with it.

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The Value of Software Integration for BrokeragesWe’ve looked at how unintegrated software doesn’t help your real estate brokerage; now, let’s have a look at what integrated software, by contrast, can do to help your brokerage.

It Helps You See the Big PictureIn a seasonal industry like real estate, big-picture thinking is critical. Revenue and profitability trends shift constantly throughout the year, and it’s key for you to have a clear, overall understanding of what’s going on across your brokerage—and how these things affect one another.

Having visibility into your brokerage’s big picture empowers you to make adjustments to your overhead and your expenses proactively, before it ever becomes an issue.

It Keeps Your Information TogetherAn inherently connected platform negates the need for multiple places to store information. It keeps the same information in one place, and sends it to specific ports as the information is requested. This way, things like your back office, transaction management, MLS, and lead management programs can all work together to keep your information in one place and accessible.

These connections allow you to see trends and identify variances in real-time, rather than after the fact—so you can see things like seasonal fluctuations as they happen, and you don’t need to wait for your annual report to start planning for the next season.

It Can Give You a Competitive AdvantageYou brokerage is not the only thing that will be growing in the coming years. In the recent Real Estate 2020: Building the Future report from PwC, for example, you can see the forecasted upcoming changes for the real estate industry on a global scale—including how current migration patterns will settle down, cities will boom, and the housing market will increase in urban areas.

By 2020, technology will have become mission-critical. It will drive customer engagement, data mining for information on clients and potential clients,

operational efficiency, and regulatory and tax reporting.

Source: Real Estate 2020: Building the Future

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In fact, the report forecasts that by 2020, a short year and a half away, investable real estate will have more than doubled since 2012, and will likely double again by 2030. If your system is only just getting the job done now, it may not scale with the growing market in the years to come.

It Can Save You MoneyReducing the money you spend on data entry isn’t the only way an integrated software system can save you money. By further automating your processes, including data analytics, communication, and even regulatory reporting and auditing, an integrated system can reduce the time your team spends on these things, and free them up to dedicate time to their other responsibilities.

For example, in a recent survey that Lone Wolf Technologies conducted, we learned that nearly 50% of brokerages spend up to or over an hour processing a transaction. Let’s assume an average brokerage processes 30 transactions every month, spends an hour on each one, and that an office administrator does this task.

The average office administrator in the U.S. makes $52,500 per year, and works 40 hours per week. This works out to an hourly pay rate of $25.24, before taxes.

Based on this, 30 transactions each month would cost $757.50 per month just in wages before taxes, or $9,090 per year.

With an integrated system that reduces the tasks of transaction management and data entry, the time spent on each transaction could be lowered as far as 30 seconds—which would reduce those same costs to $6.30 per month in wages before taxes, or $75.72 per year.

That office administrator would also then have up to 29.75 additional hours per month to dedicate to other tasks.

Nearly 50% of brokerages spend an hour processing a transaction. Using an integrated software system can save up to $9,000 per year

just on transaction management.

Source: The State of the Brokerage Report

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See What Software Integration Can Do For YouSoftware integration can reduce redundant and time-consuming workflows, improve potential business growth, and boost bottom lines by plugging in your business tools properly and effectively. With an integrated system, your brokerage can get the most out of its software. Your team can stop working for your software—and start working with it.

That’s why we built an integrated system that can manage your entire process, from offer to close, with brokerWOLF and TransactionDesk.

We’d love to show you what software integration can do for you.

Book a personalized demo today.