Technology in Real Estate Operations is Stuck in the Eighties. Why?
by Mr. Sharan Grandigae, Founder & CEO, Redd Experience Design
When one thinks of real estate, the image of a developer sitting in front of a row of landline phones, holding a mobile phone to each ear while answering innumerable calls is very familiar. However, in this era of artificial intelligence and machine learning, the rapid pace of growth of the industry calls for the adoption of technologies that can manage multiple processes that are still being carried out through archaic means.
The real estate sector in India is projected to reach $180 billion by 2020 according to a joint report by CREDAI and JLL. Investment inflows in the housing sector since 2014 have been Rs. 590 billion, with about 47% of the total invested money in real estate. The real estate business is a finance-driven one in that the timing of the flow of capital, whether to procure raw material or buy land, is crucial. This timing makes a big difference to the profit margins of real estate developers.
While the industry has introduced technologies like Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM), operations management in real estate remains a holdout. With processes still being very manual, there are even personnel appointed just to get updates from the project sites everyday. Aggravating the situation is the fact that operations management has a unique set of challenges that makes it tough to design for:
The developer is also the traffic cop
Real estate developers are the intermediary between the organisation and the contractors on the one side and the customers on the other. A typical workflow is when a customer wants a window in the apartment layout moved or restructured. S/he sends a request to the developer who then contacts the project architect, structural consultant, electrical engineer and other contractors to get approvals. The developer then gives the cost of the change to the customer. This whole process can take as much as two weeks. A good solution to expedite this process can be the implementation of a platform that allows for collaboration. Technology that takes this unique scenario into consideration can cut down on decision-making time significantly and the timelines for a project can be reduced greatly.
Sharing of contact information is impossible
Viewed from the engineer’s perspective, s/he might have a question regarding say unit number A1. The developer would need to make the introduction or share the contact information with the engineer in order for her/him to get in touch with the owner of unit A1. But developers typically share this on a need-to-know basis as this information is privileged and providing access to all of the contacts at once is impossible. A software platform can help share the required information without depending upon intermediaries. It could go further and allow communication between the engineer and the owner of A1 without either one knowing each other’s contact information.
Only broadcast messages are sent
When communication that needs to be sent out is relevant only to certain groups of people, such as all the owners of apartments on a particular floor or all owners in say Tower 1, WhatsApp or other such platforms don’t cut it because they allow only one-on-one messaging or messages to entire groups. A technology platform needs to be designed that can enable the sending of messages to an individual, to the entire group or even an intermediate group such as the owners of Tower 1.
People have to be available in real time
Not all communication needs to be in real time but phone calls are the primary way to communicate today. A software platform aimed at this segment needs to be able to discern between information that requires real-time availability and make everything else asynchronous so people can respond to things as and when they can. This also enables just-in-time financial management, which is crucial in the real estate industry.
People join, people quit
Normally, the construction of an apartment takes at least two years and in this time, there are people in the organisation who might move jobs and new recruits who might get involved with the project. Instead of having to update the new recruit from the top, a software platform can make this process simple and intuitive.
Communication is mostly between non-English speakers
The real estate industry has professionals whose language of preference is usually not English. But if technology can use a mobile-first approach and is geared towards catering to regional languages, this does not have to be a problem.
Tasks management is hard within an unorganised workforce
Task management is a core requirement in the industry but getting unorganised workforces to do this is hard. Having them go to their mobile phones and making it easy for them to do it there is a good first step in solving this problem.
Compliance and transparency are often difficult
RERA regulations in India now require the developer to communicate to customers at each stage of the project and be transparent about changes. Developers have to communicate relevant information to each customer without increasing their effort involved in making this happen. Any software designed for this segment needs to take this into account while also ensuring the developer’s need to share privileged information with only certain groups of people.
While many industries in India have stayed abreast of the latest technology, real estate is a notable exception. Queries still get an old-fashioned .pdf document detailing the property and developers continue to be on the phone as intermediaries 24/7. With the number of projects mushrooming and the real estate sector only set to grow more rapidly, specialised platforms are now needed to assist and leverage the moving parts of this very dynamic sector. Besides adding tangible value, a smart and user-driven software platform can deliver the speed, smarts and scale that every organisation needs and enable communication that is asynchronous. This is a necessary leap to bring the real estate industry into the technology era.