Enterprise Resource Planning (ERP) is a management product using software and technology to manage business processes with the purpose to minimise operating cost and to increase output. Currently only a few larger real estate agencies can afford a customised ERP system in Malaysia. They usually possess their private server and software capable of unlimited customization upgrade according to need.
A Software As A Service (SaaS) ERP System is the alternative solution for companies not willing to invest into a relatively expansive private ERP system. The characteristic of a SaaS ERP System is usually
1. to charge subscribers a small monthly fee
2. one-size-fits-all industry software ready for deployment
3. limited room for in-depth customization requests
4. shared server and database with other companies
5. does not need to manage own server
6. must be web based
A comprehensive SaaS ERP system in Malaysia for real estate agencies is still relatively rare and immature. Software modules are scattered with different companies’ products resulting in agencies needing to subscribe to multiple SaaS products.
Small market size of only about 1,000 existing agency firms in Malaysia may be the reason why resourceful technology companies are not interested in developing high quality SaaS ERP Systems in the country. These tech companies believe there are only about 150 agency firms with more than 100 property negotiators that may need an ERP system in Malaysia. Firms with less than 20 negotiators were not their clients because they are mostly happy with using the traditional spreadsheet to manage the company operation.
SaaS ERP System in Malaysia is popular
Most medium size companies will choose to subscribe to a SaaS ERP System in Malaysia because it has a lower entry cost and can be deployed immediately compared to developing their own private ERP system.
The cost for a customised ERP system is something not many companies can afford. Even if they have the budget, they fail to hire the qualified personnel to help design and build the system with programmers. The qualified personnel must be able to understand the company operation model thoroughly to design a logical software structure with room to upgrade. We have witnessed many companies fail to build their own system after spending huge amounts of money but at the end choose to join a SaaS ERP system in Malaysia.
Survive with A SaaS ERP System in Malaysia
About 10 years ago, many petty agencies thought an ERP System in Malaysia was only for larger firms. Smaller firms with less than 20 negotiators do not need it. They can manage all the admin work manually. This is a wrong perception.
Today, petty firms finally realised they must subscribe at least to a SaaS ERP system to survive in the industry. They find out the new generation of agents will not join a non tech savvy company. Their clients, like developers or property sellers, are losing confidence in outdated companies. Potential clients are assuming these firms cannot deliver sales.
Negotiators want a tech savvy identity
The new generation of real estate negotiators want a tech savvy identity in selling products. They will feel ashamed when their peers or even potential clients are laughing at them for using ancient agency tools and methodology. Buyers are more impressed with tech savvy agents on values they can provide. For example,
1. they are more resourceful in listings
2. they access to latest information quicker
3. better presentation
4. quick in processing documents
5. are much better organised
As a result, tech agents have more confidence to generate more sales.
Type of software embraced by larger agency firms
Below are some popular software real estate agency firms are using to improve internal management and to generate more sales.
– Online case submission system
– Co-agency system
– Multi-level commission distribution system
– Billing system
– Commission status reports
– Paperless signing
– New Project Booking system
– Listing management system
– Leads management system
– Customer Relationship Management (CRM)
– Social Customer Relationship Management (SCRM)
– Master listing system
– Merit system
– Credit system
– Reporting system
– VR AR viewing system
– Automated negotiator training system
– Online property valuation system
– Company Mobile App
– Robotic Process Automation (RPA)
– New Project management system
– Referral system
– Voting system
– Internal broadcasting system
– Marketing system
– Many other supporting software
Listingmine.com provides some of the above software for free. More modules will be developed according to demand to help the industry.
ERP System Efficiency
Below is a table comparing the competitive edge a company embraced technology over an outdated agency firm handling identical scenarios.
| Scenario | Company Embraced Technology | No Technology |
| Sourcing property for a buyer with higher commission | Cobroking system allow negotiator to easily identify suitable listings for their buyer | Say sorry to buyer not having any suitable listing |
| Submit a sale to company | Online submission systems allow agents to submit cases online anywhere, anytime. Agent has more time to chase sales. Require less admin processing work. | Waste time travelling to the company for submitting a case. Mass paperwork for admin. |
| To encourage more sales | Merit system tells agents how much sales needed to be top sales this month for special rewards. Creating competition among company agents to chase more sales. | Agents have no idea what is going on and have no incentive in giving their 100% commitment. |
| Company gives leads to agents to follow up. | Leads Management System allows team leaders to check every lead status making sure agents do follow up with leads given. Higher lead conversion rate. | Agents do not follow up with given leads. Team leaders have no systematic method to monitor leads given. |
| Issue invoice and receipt to clients | Billing system allows the closer to pass needed documents to clients to quickly nail down sales. | Admin takes a very long time to manually issue invoices and this can affect closing. |
| Distribute commission | Commission distributed system eliminates human error on overpaid, underpaid and mispayment. Accurate tax computation generated within a few seconds. Save time with income tax officers. | Frequent human errors affecting agents’ trust toward the company. Manual tax computation takes a long time to process. Wasting time with the auditor annually. |
Accelerated growth on financial SaaS ERP systems
Since the Covid pandemic in 2020, the demand for a financial SaaS ERP system in Malaysia has accelerated compared to other types of SaaS solutions. Agencies were forced to operate online since their agents were restricted to work online only. Companies swiftly subscribed to a SaaS ERP system in Malaysia which is affordable in subscription and ready for immediate deployment.
There are some real estate agencies willing to employ software developers to customise their private ERP system requirements. A few have already spent over a million Ringgit Malaysia on technology. Possessing their own source code within their own server is their primary concern.
Reviewing Traditional Business Model With ERP Systems
| Portion | Roles | Commission |
| 1 | Closing Agent | X% |
| 2 | Company | Y% |
| Total | 100% |
Traditionally, most subsale agencies offer closing agents around X% of commission while the company takes about Y%. Among the Y% company portion, the company may need to further split to the following optional items whichever necessary.
1. Team Leader
2. Group Leader
3. Recruitment Introducer
4. Boss overriding
5. Branch profit
6. HQ loyalty
7. Training fee
8. Company Trip
9. Annual dinner
10. Reward fund
11. Company profit
An ERP System in Malaysia can help handle mass volume of cases and to distribute commission flawlessly. However, most agencies realise this decade long subsale business model is not generating profit to the company even with high case volume.
This traditional business model provides little value to retain agents in the age of self-media. Negotiators no longer rely on company resources as in the past. The majority of performing agents are destined to resign after working 3 to 5 years to join competitors offering even higher payout or to start their own practice. Most agencies are having the same issues in retaining their performing agents.
Agencies are exploring the possibility to innovate new business models to solve this problem with the help of an ERP System.
Agency business model revolution has already started
A financial ERP system in Malaysia helps lower operating cost and to eliminate human error on complex financial structure and calculations. This set a solid foundation for companies to design more advanced business models not possible before.
A new breed of business model which is to split the process of closing a transaction into multiple portions is gaining traction in Malaysia. Companies are assigning different specialists to different roles with the help of a customised ERP System in Malaysia. They no longer allow a single agent to handle the whole transaction process alone because they may not have enough skills in certain aspects and lose potential deals.
Below is an example of how a transaction process is separated into multiple portions.
The New Commission Splitting Model
| Portion | Roles | Commission |
| 1 | Listing introducer This person to provide leads to the system only | X% |
| 2 | Phone Calls This person is a specialist in making phone calls and is trained to convert potential sellers or buyers attending appointments. | X% |
| 3 | Document manager This person is a specialist in managing all documents to be signed by potential sellers or buyers. This person verifies documents to prevent fraud. | X% |
| 4 | Photo / VR person This person is a specialist in taking excellent photos and VR. This will make the property more appealing online. | X% |
| 5 | Key holder person This person is a specialist in taking care of the keys. They have to provide keys to needed people for viewing. | X% |
| 6 | Buyer introducer This person introduced potential buyers into the system. | X% |
| 7 | Closer This person is specialist in viewing and to perform closing. | X% |
| 8 | Closer Helper This person helps the closer to conclude the deal if needed. They can be a team leader or a referral. | X% |
| 9 | Loan Consultant This person is a specialist in housing loans and can help buyers to structure documents increasing loan approval rate. | X% |
| 10 | Company Profit This is a platform fee for handling the transactions with many different people. | X% |
| Total | 100% |
*X% means percentage to be decided according to different company policies.
Emphasis on teamwork and transaction volume
The above business model emphasised on the following values.
1. Only specialists to handle dedicated roles
2. Practicing professionalism
3. Promote teamwork culture
4. More people benefits from a transacted deal
5. Unlock deals from people possessing part of the 10 roles
6. More company profits
There are a few variants from the above 10 distribution roles in the market but they are all similar concepts. They split a transaction process to many portions to be serviced by different specialists. Every portion of a transaction is now handled by a specialist. This model may increase professionalism to the industry and increase company profit.
We are not sure if these new business models will work in Malaysia but they look promising. In China, Beike used a similar business model known as the Agent Cooperation network (ACN) which is now listed in the NYSE of the USA. Many consider this business model a success.
The challenges in the ever changing business environment has resulted in great anxiety among agencies and negotiators. Listingmine.com is committed to servicing real estate agencies and negotiators with relevant real estate agency technology.
