Written by Martin Ward, Portfolio Services Director, Styles&Wood.
I am lucky enough to meet a diverse array of property professionals during any given month. Many work in retail, banking and hospitality – sectors with well-documented real-estate challenges, including rising costs, too much space, not the right space, wrong locations, increased competition. Critically, many are wading through this while also trying to build a property strategy that can help solve the enormous challenges brought by digital disruption, and new consumer demands driven by the unabated rise of the internet.
But rather than viewing these challenges as the kind of threat to humanity personified by Skynet in Arnold Schwarzenegger’s Terminator franchise, some estate managers are embracing technology as part of the solution.
In today’s property world, the only constant is change. Teams are under pressure to predict ‘Sarah Connor’ style future events and adapt their approach in new ways. Proptech is being looked to as a key solution, but without careful consideration, it can pose more questions than they answer.
For example, BIM is often a key point of discussions with clients as it is often viewed as some form of silver bullet to their problems; the key question for me is ‘What value are you hoping to realise?’. BIM is indeed an interesting concept for our industry, but how many view this as a source of property data rather than a piece of the jigsaw, that spans the entire life of the property? As technology changes and moves, its important organisations understand how they can benefit, how it fits with their processes, teams and suppliers, and most crucially how it will deliver value.
The crux of my argument is that the multitude of systems that organisations use – BIM systems among them – need to share and connect with the same information at some stage in order to provide transparency.
Many of our customers are large blue-chip businesses with sizable, often global, estates that include legacy buildings, constantly fluctuating foot prints, and a new mixture of locations every year. Their estates are also often underpinned by fragmented data, if any at all. Trying to manage portfolios of this size with insufficient information leads to huge headaches – high costs, inflexibility and a growth in spreadsheet culture – all of which hamper decision making.
A smaller number of operational platforms that share data and talk to one another can help create a singular and true source of insight. This approach boxes off the day-to-day basics and foundations for property organisations: ‘Are my layouts up to date? Where are my assets located? What standards do I have in my branch?’.
The exciting part is that it can also provide answers to more complex concerns like, ‘Am I achieving the expected ROI from recent refurbishments?’ or ”what is my Opex saving versus my business risk if we extend our HVAC life by a further five years?’.
We have recently been working with Tesco Property, who like many, have been trying to solve these challenges in recent years. Our engagement comes on the back of huge changes within their own organisation and I admit I had some trepidation given such a degree of change. I have to say it has been an incredibly refreshing experience, there is a new culture of openness and a real emphasis about working simpler and smarter. As the team look to deliver a standard service model – a ‘single way of operating’ – across the globe, they are establishing an underlying digital estate strategy that is a key workstream to delivering change, making things simpler, doing less and ultimately providing greater insight.
Realising that the information created by the use and management of property is a valuable business asset in its own right, creates a wealth of opportunities in corporate real estate. Data needs to be collected, consolidated, made accessible to estate teams and ultimately treated with respect. If you have pockets of data across fragmented systems, property challenges are unlikely to disappear. The reality is, that if you get this right and it becomes part of your organisations’ DNA, it may prove a key factor to staving off that final judgement day.