Embattled real estate franchise McGrath Estate Agents has shifted to Data#3 as its new delivery partner for integrated managed IT services as the ASX-listed company battles headwinds from a slowing residential property market.
The new contract comes as the agency franchise, along with the rest of the brick-and-mortar marketing industry, rapidly shifts to a data and internet centric business model that driven by apps, web marketing and much closer links with lenders and finance brokers.
The scope of the new agreement with Data #3 includes service desk operations, server support, plus backup and recovery management.
McGrath's IT operations manager, Brett Kelly, said the company was constrained by the “imminent” end of its current services agreement and the upcoming shutdown period of the holidays that results in a flurry of activity in the estate agents’ offices.
The most vital systems have already been implemented as part of a staged rollout to ensure service performance won’t be affected as part of the summer shutdown.
In McGrath's full-year results in August, where it posted a $63 million loss on the back of a massive goodwill write down, the company told shareholders it is increasingly turning to data and technology as a way to improve the agent and vendor experience.
Getting the tech right is regarded as crucial for McGrath's recovery as house prices, turnover and commissions all ease in cooling market conditions after a long run of super-heated activity.
The fall in both housing prices and auction clearing rates in Melbourne and Sydney has hammered the company’s share price from $2.10 when it first listed three years ago, down to 30 cents in recent months.
McGrath’s revenue was also down 23% in its last financial year, due in part to the market downturn and decrease in both company-owned and franchise offices from 102 in FY17 to 95 in FY18.
At the time of writing, McGrath did not respond to requests as to whether the new managed services agreement will deliver additional savings or efficiencies for the company.