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Commitment Bias in Software Investments

Commitment Bias in Software Investments

Large multifamily organizations often invest significant amounts of money into property management technology hoping to improve efficiency, increase profits, and gain a competitive edge in the market. However, despite the potential benefits, there is a significant risk of commitment bias – a tendency to stick with an original decision, even when it’s no longer the best option or even a viable one.

Many organizations have recognized the costs and inefficiencies associated with their existing software investments and ongoing maintenance. Despite these considerations, they have made the decision to explore new property and asset management technologies, demonstrating their ability to overcome commitment bias.

The Trap of Existing Investments

One of the most significant contributors to commitment bias is the sunk cost fallacy. This is the idea that once a company has invested a significant amount of resources into a particular technology, it’s difficult to abandon it, even if more efficient options are available.

This can be particularly problematic when implementing new technologies, as older systems may be deeply ingrained in a company’s infrastructure. Employees may have been trained on older systems, and it can be difficult to justify the expense of retraining them on new ones. In some cases, new technology may require a complete overhaul of existing systems, which can be daunting, expensive, and time-consuming.

Recognizing that multifamily operators have made previous investments in various software systems, developing new software that can seamlessly integrate with their existing software stack has been our focus. By collaborating with prop-tech companies that can integrate with the current tech stack, rather than starting from scratch, new investments are considered sustainable and the overall risk of a new purchase is reduced.

The Fear of Failure

Another factor contributing to commitment bias is the fear of failure. Investing a significant amount of money into new technology can be daunting when it fails to deliver the expected results. This fear can lead companies to stick with older systems, even if they’re no longer the best option. Unfortunately, this can be a self-fulfilling prophecy – by avoiding new technology, companies may be missing out on opportunities to innovate and improve their bottom line.

To overcome commitment bias, it can be helpful to collaborate with a company that values continuous improvement. At RealSage, we prioritize close partnerships with our clients, allowing us to gain deep insights into their specific needs and challenges. Our commitment to evolving our product ensures that we can effectively address the multifamily industry’s pressing issues. By providing a curated dashboard and actionable insights, we help multifamily property owners track their progress toward goals and measure ROI, offering valuable metrics and projections.

The Importance of Flexibility

To avoid commitment bias, companies must remain flexible and open to new ideas. This means being willing to upgrade older systems, even if it means admitting that the original investment was a mistake. It also means being willing to take calculated risks and invest in new technology, even if it’s not a sure thing. Companies that are willing to take these risks are more likely to stay ahead of the curve and maintain a competitive edge.

Although the idea of replacing a trusted system with something new may seem daunting, our unique offerings tailored to the multifamily industry are precisely why our clients have felt confident in doing so. With our user-friendly tools, clients can easily price rental units based on current market data, access comprehensive dashboards to analyze trends over time and automate the tenant acquisition process. These client-oriented features empower our clients to make informed decisions, streamline operations, and achieve their goals more effectively.


Commitment bias is a significant problem for many large companies, particularly when it comes to investing in new technology. By being aware of the sunk cost fallacy, the fear of failure, and the importance of flexibility, companies can avoid this trap and remain competitive in a rapidly changing business landscape. Ultimately, our commitment to constant evolution and improvement is what sets us apart from other property and asset management technology providers. We understand the importance of flexibility and the willingness to take risks, and we’re dedicated to helping our clients overcome commitment bias and stay ahead of the curve.

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