Playbook For 2025: Build Data, Tech On Firm Process Foundation

Left: John Cecilian, Jr., Co-Founder & CEO of Cecilian Partners
Right: Philip Worland, Co-Founder & CPO of Cecilian Partners

The 2025 Operating Environment: Context and Challenges

As the homebuilding industry steps into 2025, the landscape is defined by a trio of intersecting forces: demographic demand, constrained supply, and intensified competition. These forces compel homebuilding strategists to rethink operational models, adapt technology, and embrace new ways of working.

The cost of money is a defining factor, as interest rates and borrowing costs continue to shape how builders allocate resources and manage risk. This "new normal" creates a stark contrast to the era of easy money that dominated pre-2022 markets, demanding that builders show quicker returns on investments.

As we've written here:

Being better — smarter, faster, and of higher value than a half-dozen or more local competitors in each and every one of America's most active new home and residential development markets — in ways that true up to a timeless imperative coined by Peter Drucker, "The purpose of business is to create and keep a customer," will tell the story of homebuilding business fates and fortunes for at least the next 36 months.

As every strategic and operational leader in the business knows only too well, the catch with homebuilding is that the term itself is practically a misnomer. More accurately, homebuilding operations and enterprises, as we recognize them, typically describe an alliance of as many as 10 to 15 business operations under a single brand or corporate banner. Retail, manufacturing, consumer insight, logistics, real estate development, data and technology, sourcing, sales and marketing, product design and architecture, local policy, investment and financial management, to name some but not all.

John Cecilian Jr., Co-Founder & CEO of Cecilian Partners, characterizes the industry's sluggish pace of innovation perfectly:

“The single largest asset class in our country is still doing things like it’s 1982. That’s not just tongue-in-cheek; it’s the reality we face every day.”

Supply constraints continue to tighten. Vacant developed lots, skilled labor shortages, and climate-related risks add complexity to an already challenging environment. Winning in this market now requires more than scale—it demands competitive competence. Success hinges on becoming a builder of choice not just for consumers, but also for partners, stakeholders, and talent.

As Cecilian points out, the industry’s structural inertia is compounded by a lack of readiness for technological change:

“None of these organizations are ready to utilize a large language model to make their businesses better because none of their data is standardized.”

Lessons Learned in 2024: Foundations of Progress

For Cecilian Partners, 2024 underscores the importance of foundational changes in how builders approach data, technology, and operations. While many in the industry get sidetracked by shiny trends like the metaverse or virtual reality, Cecilian Partners focuses on addressing core operational inefficiencies.

Phil Worland, Co-Founder and Chief Product Officer at Cecilian, reflects on this distraction:

“The industry gets distracted by shiny quick fixes like the metaverse, while the real issues—data, process, and efficiency—are left unaddressed.”

This insight drives Cecilian Partners’ commitment to building foundational systems that improve operational efficiency and unify data. These systems don’t just address current pain points—they set the stage for long-term transformation. As Worland explains:

Most of our clients don’t just have technology problems; they have process problems. If you don’t fix the foundation, the tech won’t help.”

Builders often underestimate the behavioral changes required for successful technology adoption. Cecilian emphasizes this challenge:

The hardest thing we’re doing is not selling software—it’s selling behavioral change. Real change management is where many companies before us have failed.”

2025 Outlook: Competing in a New Era

Looking ahead, Cecilian Partners sees a more competitive and dynamic market where adaptability will be key. The rising adoption of asset-light models like Lennar’s Millrose spin-off underscores the need for efficiency and agility. Yet, builders can’t achieve these goals without first addressing foundational inefficiencies in collecting and managing data.

As Cecilian notes:

We need to stop thinking of technology as a cost center and start viewing it as a profit center — changing how people work every day, creating efficiencies, and bringing clarity to data.”

The competitive environment of 2025 also demands better customer experiences. Worland explains:

Customer engagement isn’t the issue—it’s the fact that they engage and can’t get the answers. There’s no transparency, long wait times, and operational inefficiencies that lead to slower absorption rates.”

Cecilian adds that builders must meet consumers where they are, especially in a world where five generations of buyers now shop in similar ways:

This is the first time in American history that five generations of consumers are shopping the same way — on their phones — and yet, we still use homebuilding jargon they don’t understand.”

The Path Forward: Strategic Imperatives

For homebuilders to succeed in this environment, they must embrace several key imperatives:

Invest in Foundational Technology

• Builders need systems that unify data and streamline processes, creating a platform for long-term growth. As Worland puts it:

“AI isn’t going to change your world if you’re working off spreadsheets and unaligned data sources. Without foundational work, AI is just a buzzword.”

Prioritize Customer Experience

• Leading builders like Taylor Morrison demonstrate the value of embedding customer experience into every facet of their organization. Cecilian highlights their success:

Taylor Morrison will always win because it comes from Sheryl [Palmer] down to every region—loving your customer and creating a memorable environment.”

Recognize Technology as a Profit Center

• By shifting the narrative around technology from cost to value creation, builders can unlock efficiencies and build resilience. Cecilian makes this point clear:

Software adoption should be seen as a profit center—it’s building net new efficiencies, creating clarity on data, and bringing teams together.”

Adapt to the Competitive Environment

• With intensifying competition, builders must be nimble, data-driven, and operationally excellent. Worland emphasizes:

“You’re in a competitive market. You have to be competitive to consumers, to your peers, and to your potential acquirers. Technology is key to that.”

Building the Future

As the homebuilding industry navigates the complexities of 2025, the insights of leaders like John Cecilian Jr. and Phil Worland serve as a call to action for strategists. To thrive, builders must move beyond outdated systems and embrace data, technology, and customer experience as central to their success.

Ultimately, as Cecilian reminds us:

What we’re trying to do is not just sell software but change how this industry thinks and works. That’s where real transformation happens.”

This transformational mindset is what will distinguish the industry’s leaders from the laggards in the year ahead.