The rise of technology in the commercial real estate industry has been saved
The rise of technology in the commercial real estate industry
How is technology changing commercial real estate?
The pandemic accelerated the use of technology in the commercial real estate (CRE) industry. Within weeks, most of the workforce started working from home, property tours turned virtual, tenant communication moved online, and more technology was required to manage daily operations. Some CRE companies also increased the use of cloud-based tools to lower the in-house technology costs and allow for more flexibility. Although these measures improved tenant convenience and ensured business continuity, CRE companies still struggled to define their digital workflows and digitize their main business processes. Furthermore, concerns surrounding cybersecurity and data privacy are increasing due to virtualization, data capture, and data sharing.
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- How COVID-19 is Driving CRE’s Digital Transformation
- Data, analytics, and cybersecurity
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How COVID-19 is Driving CRE’s Digital Transformation
As a result of Covid-19, enhancing agility and nimbleness has become a main focus within CRE organizations. CRE companies need to prioritize the digitization of their key business processes and focus on the tenant experience to achieve this goal. Despite many CRE companies’ reactance towards digital transformation, developing a more structured plan would likely lead to more meaningful results. Additionally, companies should make their cybersecurity and data privacy a priority to enhance their resilience. Although a more structured plan would likely lead to more meaningful results, Deloitte’s survey showed that only 40% of respondents said their company defined a digital transformation road map.
CRE companies should assess their digital maturity by reviewing their existing capabilities. Based on this assessment and by taking into account their vision for the future, CRE leaders will be able to develop a digital strategy that focuses on digital technologies and initiatives that deliver strategic value. Subsequently, companies should frame the execution plan to work on key initiatives for digital transformation and ensure the transformation team has the right talent and governance structure to implement these digital solutions.
Data, analytics, and cybersecurity
Over three-fifths of companies acknowledge that they are capturing Internet of Things (IoT) sensor data. As more organizations and end-users make data-backed decisions, sharing relevant data could help companies build trust and increase engagement with their tenants. Thereafter, companies could use analytical tools to generate insights and facilitate decision making. These insights, for example, how tenants use the amenities or their engagement and performance level, will allow CRE companies to create a more meaningful experience for the tenant. APAC companies seem to have a stronger focus on data analysis, as fifty-eight percent of APAC respondents expect increased investment in data analysis, compared to 32% and 34% of European and North American respondents, respectively.
Besides creating a better tenant experience, data analytics can also build investors’ confidence who are increasingly looking at leveraging alternative data for insight generation and decision-making. Fifty-seven percent of the private equity, hedge fund, and mutual fund respondents said they are likely or very likely to identify new alternative data for insights and facilitating investment decisions.
As previously mentioned, the increase in remote working and use of data also comes with its risks, especially when it comes to cybersecurity. Cyberthreats are becoming increasingly sophisticated, making CRE companies more vulnerable. To prevent this from happening, companies should assess whether their current efforts are sufficient. If not, they should upgrade their cybersecurity programs and avoid simplifying them for remote working. To avoid any privacy issues, companies should ensure that information is captured with consent and stored securely.