Reduce the productivity gap with robotic and cognitive automation (R&CA) has been saved
Reduce the productivity gap with robotic and cognitive automation (R&CA)
Real Estate Predictions 2018
The continuous technology advancement is creating and enabling more structured and unstructured data and analyses, respectively. The real estate (RE) sector has the opportunity to leverage one such technology, R&CA, to potentially drive operational efficiency, augment productivity, and gain insights from its large swathes of data.
15/02 - Written by Jim Berry and Surabhi Kejriwal
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- Understanding the potential of R&CA technology
- Benefits op R&CA
- Why implement R&CA?
- How can you implement R&CA?
- Real Estate Predictions 2018
Understanding the potential of R&CA technology
Consider the current situation. Most RE companies use manual to semi-automated processes in some of their key functions such as finance, property management, and portfolio management. For instance, many companies continue to use spreadsheets for collating and analyzing data in areas such as cost aggregation and analysis, lease management, invoice development, accounts payables, property valuation, and forecasting. This tends to result in sub-optimal utilization of data and employees since different departments often work in silos.
Several documents—such as lease agreements, deeds, brokerage contracts, vendor payables and credit applications, property management agreements, and property tax assessments—are still maintained in a physical or digital format (scanned or spreadsheet).
This dependence on physical or digital formats often leads to process inefficiencies. For example, substantial time is often spent reading, manipulating, or abstracting paper or digital documents for relevant information. RE players are also challenged to perform in-depth analysis and unlock the insights, as the data is not structured in the desired format. Consequently, the high level of human involvement required increases the probability of fraud and error.
Benefits of R&CA technology
With the use of R&CA technologies, data can be assembled with substantially less effort and reduced risk of error. This would allow professionals to better analyze data outputs at an enhanced speed, and make more informed decisions, all at a relatively low cost. Use of robotic process automation (RPA) can automate manual, repetitive, and often rules-based processes and tasks. Layering of cognitive automation or machine learning capabilities such as natural language processing, natural language generation, machine learning, and cognitive analytics would enable predictive decision making.
Why implement R&CA?
Increasing speed and accuracy: RPA can accomplish mundane and cumbersome tasks, such as extraction and digitization of data from lease contracts or invoices, faster and more accurately than people can.
Streamlining record management: Optical character recognition with cognitive technologies can enable lease records, invoices, and other essential documents that are usually recorded manually or scanned to be converted into formats suitable for reporting and analysis.
Enhancing compliance and risk monitoring: RE companies can automate many of their routine risk and compliance monitoring activities using RPA. As examples, tracking invoices for compliance with contractual terms or periodic review of lease contracts to avoid any potential risks of tenant defaults of any contractual obligation can be easily automated.
Improving stakeholder experience: Reduction in errors and frauds and faster turnaround would result in better experience for internal and external stakeholders.
Optimizing costs: RPA can decrease costs drastically and may even end up being cheaper than offshoring. It can enable 24/7 processing without breaks and holidays.
Figure 1: Expected automation of key RE occupations and cost savings through RPA implementation
How can you implement R&CA?
RE companies should consider evaluating processes and tasks that can be automated and the technology implementation approach.
Evaluate current processes and tasks: RE companies should assess their current processes and tasks eligible for RPA and/or cognitive automation. Tasks having large volumes of data and repetitive in nature with scalability through additional human effort are likely candidates for RPA implementation (see Figure 1). Roles requiring perceptual human skills, such as handwriting recognition or facial identification, and other cognitive abilities, like planning and reasoning, could also be considered. RE companies could even consider using R&CA technology for initial development of future cash flow projections, tax computations, payables processing, and payroll applications.
Assess the implementation approach: RE companies would need to evaluate the technology implementation approach that they wish to pursue. They could either consider partnering with R&CA technology vendors or establish a dedicated R&CA center of excellence. The approach would largely depend on the current technological maturity of the RE firm, their budgets and estimated return on investment, and the sense of urgency to automate existing tasks.
Bottomline, like any new technology, R&CA comes with the promise to improve routine tasks radically by making them faster, cheaper, and more accurate. However, it would be important for companies to evaluate and implement data access, protection, and privacy measures based on the amount of tenants’ and employees’ personally identifiable information (PII) processed using these technologies. Finally, companies have to break existing silos among people and processes to realize the full benefit of the technology.
For a more in-depth understanding about R&CA, please read our report: 2018 Real Estate Outlook Optimize opportunities in an ever-changing environment.
- Richard Horton, “The robots are coming,” Deloitte.
- David Schatsky, Craig Muraskin, Kaushik Iyengar, “Robotic process automation: A path to the cognitive enterprise,” Deloitte Insights, September 14, 2016.
- David Wright, Dupe Witherick, Marina Gordeeva, “The robots are ready. Are you?: Untapped advantage in your digital workforce,” Deloitte, 2017.
Real Estate Predictions 2018
15/02 - Robotic and cognitive automation part 1