By Callum Board,
Client Success Director (Global) at REdirect
Now more than ever, technology is integrated into our everyday lives. It impacts how we work and play, live, learn, travel, and keep in touch with our loved ones. It is only a matter of time before every product, service, process, and business model has been affected by this unprecedented technological advancement.
While the real estate industry was slower than other sectors to transition to digital, it is now beginning to realise the full benefits of digital transformation. Since 2011, when the property technology (PropTech) industry was valued at around $186 million in annual revenue, interest in PropTech has grown significantly. By 2019, its total value reached a staggering $31.6 billion, which has continued to increase in the wake of the Covid-19 pandemic.
The pandemic has played a major role in disrupting the industry, particularly regarding new technologies being used to address the challenges of executing real estate transactions and managing properties remotely.
Whether they are managing a portfolio of 10 assets or 1,000, profit margins for property companies are currently being squeezed by a variety of challenges, including rising costs, continued supply chain issues, and geopolitical uncertainty. This makes it more important than ever to invest in the right technology to boost efficiency, cut down on administrative costs, and maintain that all-important bottom line.
Many in the industry are now adopting new technologies as a strategic priority. Owners and managers of small and midsize property portfolios, in particular, will need to embrace PropTech and move away from offline systems and disjointed technology if they want to continue generating profits over the next few years.
In this blog post, we will explore some of the reasons why, historically, property companies have been slow to embrace technology and why, in the current climate, they absolutely must.
There is no way around this fact: technology can be expensive. To a property company that is used to traditional processes and offline methods, the financial investment required to adopt a more technology-forward approach might seem steep.
While initial costs can indeed be high, companies often fail to consider the cost of inaction if they do not introduce new PropTech solutions. Additionally, many discount the future potential return on their investment and the increased efficiency from which they can benefit by using the right technologies.
When considering an investment into any property technology, it is important to consider the components of a strong technology investment strategy.
While the exact approach will differ from organisation to organisation, the various stakeholders must be involved in defining the technology needs of the business. This will help to create a cohesive approach across departments. While internal stakeholders will be well placed to define the company’s needs, an impartial third party—such as REdirect Consulting—with the relevant knowledge and experience can help to ensure that the resulting technology investment will be outcome-based.
If you want your real estate business to thrive in years to come, it’s time to start thinking about ways to get ahead. You may be understandably hesitant to take the investment plunge due to steep upfront costs. However, a cost-benefit analysis will typically demonstrate that the benefits far outweigh the risks. In fact, now is the ideal time to get ahead and reap the rewards that PropTech can bring to your business before your competition catches up.
REdirect’s Business Process Reviews (BPRs) are designed to evaluate the specific needs of the various business functions (such as accounting, property management, leasing, and Investment Management) within an organisation. Our consultants are uniquely equipped to guide clients through software selection and implementation, from the discovery and planning phases through to the pilot, custom data conversion, and “go-live.” A BPR is designed to help you to maximise your technology investment and realise the best possible return on that investment sooner.
Another common concern we encounter about PropTech is the capability of an organisation to integrate new technology into its existing systems. Businesses and their teams tend to be accustomed to doing things in a certain way, and even the most tech-savvy team members may struggle to adapt their workflows to accommodate a new piece of technology.
While such concerns are valid, businesses must think about the bigger picture when faced with challenges and changes to their traditional ways of doing things. System integrations can improve insights, allowing businesses to make more informed decisions by linking data between their legacy and new systems. The growing pains are inevitably worth it in the long run, and there are many ways to lessen them.
System integration focuses on linking together disparate data and systems to improve quality and productivity while streamlining processes. With extensive expertise in real estate business processes, systems, and custom programming, REdirect provides cutting-edge and cost-effective solutions for system integration. This can mitigate the initial headaches of transforming your business into a tech-forward one.
Increasing efficiencies and reducing costs
Traditionally manual processes, such as invoice processing or bank reconciliations by hand, may feel normal and even necessary. However, introducing automation or artificial intelligence (AI) into your workflow can pay tremendous dividends in terms of time saved and increased accuracy. This can enable your employees to spend less time on “busy work” and more time closing deals, strategising, and working with clients. In other words, doing the things they do best while technology handles the rest!
REdirect Consulting has become the leading provider of Robotic Process Automation (RPA) solutions for real estate owners, managers, and investors. RPA is a type of business technology that utilises software robots (or “bots”) and AI to automate digital tasks. These bots can learn and then mimic processes based on specified rules set by you.
There are numerous advantages to RPA. It frees up human employees to do what they’re good at and focus on the tasks that cannot be replicated by machines, while the bots take over those repetitive and dull but critical actions. By boosting productivity and efficiency, RPA can provide results where they matter most—increasing your business’s bottom line.
Making better investment decisions
Things that may have been discretionary in the past—such as software and data analytics—are now a necessity for property firms and their investors. To remain competitive in the marketplace, investors will want to see that businesses are making use of all available investment data with the latest technology and that they are satisfied that any specific reporting needs will be supported.
By using effective PropTech solutions and integrating the appropriate data sources to better understand the impact of policy changes, real estate investors are leveraging these analytics to drive better investment decisions.
When selecting a fully articulated property management system, there are two essential functions to consider to ensure that your chosen platform will deliver a strong Investment Management solution. First, it must be capable of tracking and measuring the key performance and economic returns, which are indicators of the “health” of your investment(s). Second, it must enable you to easily and regularly ensure and report upon compliance with regulatory requirements.
Our investment systems can support diverse structures, allowing numerous complicated processes to be handled through automations and integrations between modules and various software solutions. Our expert team is available to support real estate industry clients at all stages of their Investment Management implementation journey.
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Technology will continue to disrupt the property industry, and now is the time to embrace this reality if you want to guarantee your organisation a place in the future of this multibillion-dollar industry. However, it is not just progressive, continuous improvement that is needed, but a real cultural and industrial mindset shift.
Technology and innovation are no longer taboo, and those in the property sector are becoming more and more aware of the opportunities afforded by new technologies. Much of the industry is still in the transition phase, waiting for the brave innovators to “test the waters” before taking action. However, as per Darwin’s theory of evolution, it’s not the strongest of the species that survives, nor the most intelligent. It’s the ones most adaptable to change.
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