November 6, 2023
November 6, 2023
Real estate and construction businesses are slowly embracing technology to improve operations, safety, revenue, and more. This informative Q&A with an MNP Digital leader talks about why, and how, they should keep going on the digitalization journey.
Organizations in the real estate and construction industry have relied on a strong, experienced team to execute manual, labour intensive processes across numerous tools and systems to maintain day-to-day operations. However, ongoing changes in market forces and technology continue to outpace their ability to keep up. This is where the opportunity lies.
Thanks to advancements in technology, operational scalability and flexibility is within reach for smaller, more cost-conscious organizations. However, many organizations are resistant to change, with business owners simply not sure how to leverage technology or prioritize investment.
Ongoing safety and compliance regulations continue to evolve and that’s a concern for many organizations. Cyber security continues to be a challenge, as is controlling inventory on job sites. Labour shortages and high turnover also continue to be an issue, and there’s a real need to improve both staff and operational productivity to make up for that.
Innovation trends include the use of artificial intelligence and machine learning to analyze data and make better predictions. Operationally, we’re seeing digitization and digitalization of core business processes, modernization of core finance solutions, and optimizing IT investments.
Many of these organizations are highly manual and still using paper-based processes. While these processes may have been effective in the past — and may still appear to be working — forward-thinking employees are discovering that they are holding them back. Getting information is time-consuming and younger generations aren’t interested in moving paper around when they know there are easier, faster ways to do things.
Other challenges include heavy reliance on a high-performing team that has all the information regarding how the business runs in their heads. This is a big obstacle to succession planning and a significant risk to operational continuity. Many organizations are also challenged by a lack of operational and administrative collaboration across departments, and by the fact that they don’t have real-time visibility on finances.
I’m not a huge fan of the term “digital transformation” because the word “digital” sounds like it’s all about technology, and the word “transformation” implies a massive undertaking. Digital transformation is fundamentally about business objectives and outcomes, not technology, and for mid-market firms, it often needs to be iterative and incremental rather than a big-bang.
Many organizations in the real estate and construction industry are hesitant and nervous about embarking on a digital transformation. Instead, they try to attack their challenges piece-meal, with a limited understanding of the long-term objectives or a roadmap of prioritized initiatives that will help them achieve their vision.
Thankfully this is beginning to change. Companies have begun reaching the limits of their operational scalability and effectiveness in the face of ongoing market trends, disruptions, and cyber security challenges. Right-sized digital strategy roadmaps aligned to long-term business objectives are now being requested more proactively, as a foundational anchor around which to rally the organization for ongoing, iterative change to facilitate long-term success.
From a safety perspective, wearable technology is going to become increasingly important. From both an insurance and compliance perspective, you’re going to have teams working on the job site with wearable technology, whether that’s something that monitors vital health or it’s Internet-of-Things technology that ensures that, for example, the hard hat is still offering effective protection after its been hit a couple of times.
Augmented and virtual technology is not quite ubiquitous as yet, but continues to develop. This technology can provide real-time training on the jobsite, for example, and mitigate risk to workers by providing controlled virtual environments. Drone technology is also proving helpful on jobsites for providing detailed visuals on hard-to-reach, dangerous areas, and potentially to understand structural defects and weaknesses.
Cloud-based finance and operational solutions such as enterprise resource planning (ERP) systems. These platforms can address industry-unique functional requirements and provide significant value to meet long-term objectives. A lot of companies have legacy technologies and systems that need to be replaced. Modern, cloud-based ERPs can provide integrated information anywhere, any time, and on any device, which gives executives much more operational visibility at their fingertips.
Other things that are changing the game include customer relationship management (CRM) solutions, bid/tendering solutions, consolidations and budgeting solutions, and procure-to-pay solutions. The list goes on. Digitization offers the enormous potential to address numerous operational challenges and issues that are common across the industry.
Technology can be the greatest enabler of your success, but it can also be your greatest obstacle. You need to ensure that you’re optimizing your investments in priority areas.
As a first step, embark on a right-sized digital strategy roadmap to holistically assess people, process, technology, and governance — and how well they align to your overall business objectives and vision. The digital strategy roadmap will provide an understanding of where you are today, where you need to be tomorrow, and what is preventing you from getting there. A priority-ranked list of recommendations will allow you to achieve your long-term goals.
The Canada Digital Adoption Plan (CDAP) is a great place to start.
The bottom line is that you need to ensure that you’re infusing the digital strategy component with your own corporate strategy and planning. In the past, we may have thought about corporate strategy and digital strategy as two separate things. But today you cannot achieve your business objectives without the digital component. You don’t need to understand technology, but you do need to respect its involvement in your corporate strategy to achieve your goals.
There are a lot of exciting technologies that are adding a new dimension. Embracing them has helped organizations reimagine how they do business and maximize profit. New business models and new revenue streams have been created and leaders are even thinking differently about their businesses because they have access to new data. As an example, they are using building information modelling and 3D printing to design buildings in a way that facilitates the greatest use of space and the highest level of energy efficiency, in line with market and regulatory expectations.
Thinking further ahead, a compelling and significant reason for change, is to reset the foundation for success for the next generation. How do we set up the business for long-term success given the changing business models, market conditions, and unknown potential disruptions? Just like reshoring a building, maybe it’s time to reshore your business.
To learn more about how digital transformation can help your real estate and construction business contact us and we will connect you with one of our many local experts.