Within the Real Estate business, a lot of manual processes could be replaced by automation. It leads to lower costs and could lead to a considerable impact on the operating margin.
Common knowledge is that labor cost is a great part of the property management costs and each hour saved in wages, traveling and allowance will have a positive effect on the results. However, this is not the whole truth. To some extent, it is not even possible to monitor all sensors manually. With an automated process, you will be able to get the full potential of cost savings when it comes to continuous adjustments. Automated processes will also make sure that you are proactive when it comes to maintenance, and this will save you costs as well.
What could a business case look like?
– I will give you an example. You have a building where you have a heater in each apartment, and you have an annual checkup schedule for maintenance. The engineers manually check the system and perhaps also make manual adjustments to the temperature settings. The regular visits could be seen as a fixed cost, a cost that you will have regardless of if it is necessary or not, even if no changes are done or even if the engineer does not detect any malfunction in the equipment. Suppose the checkup is done only once a year. In that case, the system could be performing badly over a considerable period, without anybody noticing it, which will also be costly eventually. It can also lead to the system breaking down entirely after a while of deficient performance, which leads to an emergency call to fix the problem. And that is, as we all know, the worst type of cost.
The solution to this problem could be to install sensors that check the equipment in real-time, to make sure that the system is running properly. Adjustments could also be made by the system, no need for any manual hand-laying. This means that employees that are regularly visiting each building could be replaced by automated monitoring and physical visits would only be necessary when it is required due to maintenance that could not be fixed by machines. With many measuring points, you will soon have a visible pattern and use machine learning to build a predictive model that immediately detects changes in the functionality that can be a sign of the system not working properly. Even slight deviations from the average or expected performance could be detected and reported and this could lead to a manual visit to perform pro-active reparations. If the engineer fixes the equipment before an actual breakdown, the damage will be smaller. And scheduled visits are always more cost-effective than emergency callouts. Not to mention the impact of sustainability, when heating is functioning optimally.
If you want to avoid reactive steering, prediction is necessary that might not be accurate enough or perhaps too late after a change. A prediction model could be built that considers other factors from inside and around the building such as changes in user patterns and weather forecasts.
Automation could of course be used in many different areas within Real Estate, besides adjustments and maintenance of the heating system. Nightguard sensors can monitor several buildings from one point and send alerts to guards if there are movements or unusual sounds around the building. The cleaning schedule could be based on how the building is used and the system could alert when the snow levels are high outside the building and snow removal is necessary, among other things. All types of data could be used and put into an operating predictive model and any deviations could result in a callout that manual work needs to be done.
What is essential to make the automation work is that data is available and that it is possible to make good use of the data by using the right technical tools as well as the right people to work with the data. But first, the business case needs to be defined to calculate the cost effect before you start and as a benchmark for following up on the effect of the change.
So how to get started?
Even with the best business case, it is crucial to have the right approach if you want to start a data-driven journey within Real Estate. Especially when it comes to replacing manual work with automated processes. Our recommendation is to think big and start small. With this way of working, you can look forward to having both an overall goal and a clear direction, and still benefit from the results early in the process.
Think big! When you discuss the overall goal for your Real Estate business going forward, you should not be modest or trick yourself to think that it is not possible. Do not limit your expectations, because you think it is too much work or some other restrictions that would impact the possibility to reach full potential when using your data. Maybe your data is not structured in the right way or perhaps it is not even available, but when you are thinking big, the focus should be on the benefits and the possibilities, not the hard work or the constraints. It is true that for most Real Estate companies, the way may be long, but if you want to keep on thrive in your business, you need to think outside the box and dream big.
Start small! To start with automation, you do not have to begin with the most complicated project. Stratiteq’s mission is to help our clients get data-driven by letting data work for them. In our opinion, the best approach is to start small by launching smaller iterations along the way. Make sure to follow up and be prepared to scale up, when you see results. The start could be a quite small, but well-defined opportunity, that will lead to the overall goal that you have manifested.
Was this helpful? Then make sure to read our guide on how to create a data-driven Real Estate business.