Corporate Digital Transformation in the Real Estate Industry
For many companies, digitalisation is both a curse and a blessing. Digitisation needs a strategy that is deeply rooted in the company. Digital transformation is not a matter for the IT department, but a task that challenges the entire company. Because digital transformation is not primarily about technical innovations or new software, but about new business models and different approaches.
That digital transformation is revolutionising almost all sectors of the economy is beyond question. The real estate industry is also undergoing change: modern technologies and new business models are revolutionising the market. Progressive digitisation not only influences the design of the properties themselves, but also their construction, marketing and management. The needs of tenants are also changing as a result of digitisation. It is fair to say that the digital transformation is leading and will continue to lead to profound changes along the entire value chain in the real estate sector.
From the many possibilities of 3D printing, which could shake up the entire construction industry, to smart building management, apartment viewing via virtual reality or sophisticated smart home systems, the range of solutions and new business models that digitalisation is bringing to the real estate sector is enormous.
BIM (Building Information Modeling) has already revolutionised the construction process in many countries by giving everyone involved access to the same data at all times. Innovations such as automated locking systems, smart building management or the digital asset evaluation and smart property price determination can not only increase efficiency and save costs, but also establish completely new business models.
The transition to the digital world cannot be achieved by developing apps or a new website. In order to successfully make the step into the digital world, a rethinking in the whole organisation is necessary. Only by consistently adapting the entire corporate DNA to the changed environmental requirements can the risks of the digital world be turned into opportunities to successfully compete in the future. The importance of the digital transformation for the entire company requires appropriate resources and a superordinate strategy.
10 steps towards corporate digital transformation
The following steps should serve as an orientation guide when planning a digital transformation:
1. Orientation phase: The first step is to determine the status quo: Where is a need for optimisation? What are the most important fields of action, what are the goals & what KPIs should be achieved?
The following questions should be answered: Where does the company stand in regard to digitisation? Where is a need for action? What does the market look like? What are the competitors doing?
Describe a new business model adapted to the digital world. Identify growth potentials that can be tapped with digital technologies and derive new business models from them.
2. Developing a digitisation strategy: In the next step, the data and findings from the orientation phase are analysed and a strategy should be developed. Which processes, departments, business areas should be integrated, which business areas should be digitised?
3. Clarifying responsibilities: Who is responsible for digitisation? The digital transformation affects all business areas and resources should be planned accordingly. Digitisation is not only a task for the IT department, but should be implemented at all company levels. Once the responsibilities have been clarified, a project should be set up and with an appointed digitisation manager making sure the project is implemented.
4. Defining a digital ecosystem: In a next step, it should be clarified for which areas external consultants and partners should be consulted. In addition, one can find out where partners, suppliers and service providers have already taken similar steps. Are there any synergies? The exchange of experience and transfer of knowledge can provide important insights. New partnerships from the digitisation environment should also be examined. Finally, the selection of adequate digital technologies and instruments is on the agenda, as is the search for the right partner(s) for implementation.
5. Digitising the value chain: This is where the concrete steps should be defined: Infrastructure must be provided, a budget must be set, a useful process landscape has to be designed and an appropriate business plan must be implemented. Ideally, these steps are managed centrally. This is also where the individual steps for the respective departments are planned, a digital roadmap is created, milestones and responsibilities are defined. If not already done, the CDO should now be appointed.
6. Involving employees: Above all, digital transformation requires cultural and organisational adjustments. Employees must be informed, involved, motivated and trained accordingly. But also the creation of change management programs, agile project management and interdisciplinary structures should be tackled at this point.
7. Prioritising: Which steps are the most urgent? What can wait? What can be implemented quickly? Where can I quickly achieve successes? Focus on the feasible and the measurable. Otherwise, there is a danger that projects will develop into “wild fields of experimentation” if new ideas and changes are continually being introduced.
8. Step-by-step implementation: Individual steps are easier to implement and bring a quicker achievements. It is advisable to implement ideas in a modular fashion, so that they can then be modified or updated on a rolling basis. It is very important to establish a failing culture: small steps are taken quickly and initial measures are implemented, the mistakes made are constantly learned from, the necessary adjustments are made and the process continues.
9. Digitising the customer relationship: This includes all external communication, the development of an appropriate marketing strategy, the creation of new distribution channels and the development of new customer experiences. Data already obtained can be used for further analysis and new customer experiences.
10. Evaluation: Finally, review the set goals & KPIs. New technologies and competitors should always be kept in mind, because digital transformation is an ongoing, circular process that must be constantly adapted to current developments.
This may be a challenge and involve a considerable amount of effort, but an overarching approach also offers companies the opportunity to optimize existing processes and increase their own corporate value through new business models and innovations.
The central questions remain: How do I take digitisation into account in my company? How do I approach the digital transformation? How do I develop the digital potential in my company to remain competitive in the future?