In 1979, Integrated Business Systems Inc. started providing in-house computer management systems for real estate, focusing on three areasÑproperty management, network services and general accounting. It's safe to say that technology has changed a lot more in that 25-year time frame than has the firm's—or most companies'—business model.

IBS president and founder Robert Entin emphasizes that in that span, the company "has retained its original goals." He's very candid about technology's role in the commercial real estate business, and whether the industry is using all of its new tools properly, most notably the Internet. The firm is currently finishing up on a two-year redevelopment of its property management and accounting package, which was funded in part by a consortium of some of IBS' largest users.

In a recent interview in the firm's Fairfield, NJ office, Entin discussed the complexities of data exchange and the software development process, as well as the company's strategy for adapting to technological change.

Let's go back to the beginning. How did IBS get started?

ROBERT ENTIN: My background is in computer science engineering, and my family had been in real estate development for many years. The genesis of IBS was that while there was some software addressing the needs of the real estate industry, the concept of a turnkey system—and somebody taking responsibility for the installation—didn't exist. There weren't any approaches that seemed to make sense, so we founded IBS to provide turnkey property management and accounting systems. We thought when we started this that we'd spend five years on it, perfect it for real estate and then pick a different industry and do another industry-specific system. Twenty-five years later, we're still developing software for real estate.

It obviously became more complex than you thought.

ENTIN: How many different ways are there to address a lease, a receivable, late letters, construction management and other facets of the business? You figure that after a while, it's all going to become a downward funnel. What we found is that the funnel is upside down: The more things you do and the more functions you put into the product, the more people say, "It would be great if this part of the system could do this." It's an ever-expanding body of software.

Did you know technology would get to where it is today?

ENTIN: You like to think you have vision, but I can't say I knew 25 years ago where we would be today. The only guy who saw where we were going was Bill Gates. He saw a computer on every desktop and the levels of connectivity that were possible. One could have foreseen desktop computers providing more utility. At that level, it's not that big a leap. When we started, we were dealing with microprocessors and similar types of software. In some aspects it hasn't changed that much, but when you throw the Internet into the picture, I'm not sure anyone could have foreseen where we are today.

What has been your strategy for adapting to change?

ENTIN: You can get caught up if you try to adopt every new piece, wave or generation of technology. You'll end up spending as much time retooling your current functionality as you will building new functionality. It's disruptive to your development cycle and your client base. How many times do you go to your clients and say, "There's a whole new generation, and now you've got to throw out what you have."

Our approach has been to look at bellwether events. When we see a critical mass, we will make significant investments. We've taken a middle-of-the-road approach; we haven't been too aggressive because we felt it would be unproductive to spin our wheels.

Of course, you don't want the market to pass you by, either. The users' perception is that if you're not on the latest technology, there's something wrong. The fact is, the user community isn't looking as much at functionality and service as they are at the actual technology. But you can have something on the latest platform that basically doesn't provide the functionality to run a business.

Talk about the marriage of real estate and the Internet.

ENTIN: The Internet brought the promise that everything we do was going to be different. There were a few early successes, and the world got whipped into a frenzy—especially the investment community, which was driven by financial folks who maybe didn't understand the dynamics of software development.

We were in the middle of it. We had some ideas to make our product Internet- or intranet-based. We knew we needed a certain amount of investment. In retrospect, I think one of the lessons is that you cannot rush software development. It's an intellectual science, and it's as much art as science.

Has the Internet actually changed the business of real estate?

ENTIN: On one level, before the Internet, the suite of software products available was somewhat limited. It was usually some type of accounting or stand-alone system, and the connectivity wasn't there. All of a sudden, there's a whole new class of products and it tends to be as much about workflow as anything else. When constructing a building, for example, there's products where, from the time the architects draw up the blueprints to the time the planners and the developers sign off on it to when the contractors bid on it, everyone can live in the same world with a piece of software.

The second level is meaningful connectivity. XML was going to be the answer to all our problems, which is probably as erroneous as throwing more money into software development. XML offers a way to alter our data formats more easily, but it still doesn't change the fact that our fields aren't the same. XML was touted as the answer, but different products still have to understand the language.

Let's talk about IBS 10.0i, the company's property management/accounting product that is now in version 10.03.

ENTIN: It is a browser-based version of the IBS system that can be run as an intranet within a firewall and corporate network or over the Internet via an application service provider. The mission was to take the enterprise software that we have, which was running on mediumto large-scale servers, and adapt, convert and rewrite it. The key element is to make it browser-based and not just web-enabled, but essentially web-delivered. We have two user installations of the product up and six that are now going in, so we're at initial deployment. We're in a development mode: version 10.04 will be out shortly.

There's an interesting story concerning the project's funding. Tell us about it.

ENTIN: Back in 2000, when there was this swirl of excitement surrounding the Internet, we went out to a number of people with the concept of a browser-based product and said we needed to raise a certain amount of capital. All of a sudden we hit the radar screen and were approached by lots of different entities, including some start-ups and venture capital firms.

We evaluated several legitimate investment scenarios under which our software would migrate and transform. Some of these would be just an investment in the product, while others would make us part of, or wholly owned by, another company. I had to evaluate what I thought our best opportunity would be.

A number of our larger clients, such as Mack-Cali Realty Corp., Vornado Realty Trust, Reckson Associates Realty Corp., Jack Resnick & Sons Inc. and the Feil Organization, started asking what we were going to do. Their comment was, "The right path is staying where you are." That was one of the grounding events—communication with clients who said we didn't have to go it alone. We then formed a consortium and raised the capital to start the project.

What's next for technology and real estate?

ENTIN: In real estate, we've seen a lot of the core products being upgraded to deal with new technologies that will allow for the kind of connectivity users are going to need. We are also seeing all these satellite products popping up that are only here now because of the connectivity.

The next phase definitely has to be connections between products. That's the hard thing, because you need consensus on how to connect. You have the medium available to connect with anyone, but the industry is going to have to come to terms with real standards for exchanging data. XML is only a standard alphabet, not a standard language.

Having users agree on the language is an arduous task, because you still have each little satellite looking at the world differently. The person who is writing a lease and the person who is administering work orders look at a lease differently. There are workflow products online to write the lease and work on the collaboration among the broker, the owner and the tenant to get it signed. We'd like to think that when they finally finish that lease, besides passing all the legal hurdles, the data would shoot into the accounting system that actually establishes it.

We're still going to have a battle to get these connections, but progress is inevitable. It's going to be very exciting when people can go to the accounting system and the right suppliers are contacted, and the tenant work order systems are updated.

What about IBS?

ENTIN: The challenge now will be that since our medium for accessing the application doesn't require close proximity to the servers, how do you sell it remotely? Once you've identified a company in Chicago or in Tampa, how do you provide the kind of high-quality implementation you need for them to really like you? When all is said and done, they have to like you. Many people don't like their software providers.

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