In 2016, long before COVID-19 changed the world as we knew it, the theme of World Economic Forum was the so-called Fourth Industrial Revolution – a technological revolution that would fundamentally alter the way we live, work and interact. As opposed to the third industrial revolution in the 1960’s that began using electronics and information technology to automate production, the fourth industrial revolution is characterised by a fusion of technologies that is blurring the lines between physical, digital, and biological spheres.
The recent pandemic has, without doubt, sped up this revolution in real estate, and it’s currently evolving at an exponential rate with breakthroughs at no historical precedent. Both commercial and residential real estate companies have been challenged as customer needs, expectations and behaviours ultimately has changed forever. With such major shift on the demand side, real estate organisations are now forced to rethink the way they design, market and deliver products and services and challenge assumptions on how they operate and deliver value to customers.
The new technologies of the fourth industrial revolution inevitably brings unprecedented opportunities: From predictive analytics, VR, AI and IoT, technological adoption can have a significant impact on the real estate industry. Imagine a world where AI cameras spot fallen elderly people in their homes and automatically alert personnel or IoT sensors automatically regulate indoor climate in schools and offices based on CO2 levels, humidity, and temperature, while predictive analytics connecting traditional and alternative revenue streams allows more flexible lease agreements and operational efficiency.
Ironically, the youngest vertical of the technology industry is growing exponentially to serve one of the oldest industries: real estate. Emerging the past 8-10 years, PropTech (short for property technology) companies are applying IT and platform economics to disrupt the real estate value chain. Thousands upon thousands of PropTech companies are innovating and transforming the industry – and we’re just getting started.
Leveraging the capabilities of PropTech can add value to portfolios and operations, and differentiate market performance, benefitting investors, tenants, employees, and the wider community. But there’s a clash between the innovative PropTech solutions and the established real estate players; most don’t have platforms or organisational readiness to accelerate and nurture innovation or let alone systems that can integrate these new technological miracles.
– Mads Pihl Sørensen, Founder and CEO of Yavica
Legacy tech can become a costly barrier to transformation. If real estate investors, managers and brokers don’t invest in the underlying technological- and organisational transformation, they will never leverage these competitive opportunities because their data, knowledge and decision-making will rely on fragmented and out-of-sync data and rigid operational processes.
In other words, where IT was a cost-saving driver during the third industrial revolution, it has now become the primary driver of business innovation. Embracing this shift requires companies to rethink the role and impact of IT in every single process and business function. Digital transformation is needed to truly power the fourth industrial revolution in commercial and residential real estate organisations.
Digital transformation is fundamentally changing how you operate and deliver value to customers by integrating digital technology into all areas of the business. But it’s also a cultural change that requires organisations to continually challenge status quo and to dare rethink how the organisation can use technology, people, and processes in pursuit of new business models and revenue streams.
An important element of digital transformation in real estate is, of course, technology. However, it’s more about shedding legacy software and outdated processes than it is about adopting new tech. It’s about enabling innovation through systems and people.
The ability to establish a digital culture and empower the entire organisation with a platform open to innovation and integration will enable commercial and residential real estate to serve the needs and trends of the new digital consumers and thus secure business in the long run.
Such future proofing requires a business solution that blurs the boundaries in siloed organisations by facilitating and providing high quality data and reporting tools to all stakeholders of the organisations. At Yavica, we’ve bridged the traditionally siloed ERP and CRM systems, so asset managers, property managers, investors and operational staff can access the necessary and correct data for them to make informed decisions and gain unique insights to innovate upon.
– Joost Bromelow Head of IT, Atrium European Real Estate
Built on Microsoft’s award-winning flagship enterprise resource planning suite, Dynamics 365 for Finance and Operations, our FlexProperty software add-on for asset- and property management helps visionary commercial and residential real estate companies automate and structure all their businesses processes in one place.
We believe the transparency and quality of having one data lake in an end-to-end business solution is the prerequisite that will enable commercial and real estate organisations to innovate and truly harvest the fruits of the fourth industrial revolution – but only if people and processes are transformed too. That’s why we always work with the change management teams and challenge our customers’ current processes in the solution modelling workshops, showing them smarter and more efficient ways if necessary.
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