COVID-19 Crisis & the Need for Full Digitalisation Among Real Estate Companies
The COVID-19 crisis is having far-reaching impacts, many of which have yet to be fully appreciated. But one salutary lesson, especially for Europe’s real estate industry, is the value to be found in digital workspaces.
This industry has never been noted for leading technological progress. Its reliance on paper-based processes, even among the larger, better-resourced firms, is well known. Unfortunately, these technological shortcomings have been exposed in stark fashion as the COVID-19 pandemic forces most companies to rely on remote working and communications. This extreme stress test has made even some of the larger real estate companies realise their digital capabilities are woefully inadequate.
In particular, the crisis has revealed the poor quality of networks at many real estate companies and the low priority often given to data security and protection. This lack of security has even led in some cases to the ‘free’ software they use tapping into the data of users for advertising purposes. ‘Cookies’ and spyware can automatically collect individuals’ shopping and viewing habits via search engines to better direct adverts that provide revenue, raising concerns about organisations’ own levels of privacy and security, too.
Essential steps to digitalisation
If real estate companies are to take on board the lessons of this crisis and successfully modernise their digital systems, then they must:
- Improve the reliability and security of their IT systems.
- Vet their software providers, checking company registrations, legal entities and jurisdictions. Contracts must specify where data is stored, how it is saved and who has access to it.
- Ask IT service providers to prove the standards of their processes via certifications.
- Switch to mobile working and make more use of artificial intelligence (AI) and application programming interfaces (APIs).
Recognition of these challenges and appetite for change is certainly prevalent in the industry. New research commissioned by Drooms1 found that two thirds (67%) of real estate professionals say their organisations’ efficiency would increase if their systems were to have seamless integration with third-party platforms that give them access to a variety of functionalities. Nearly a third (32%) believe this improvement would be ‘dramatic’.
API offers a seamless integration solution
A leading-edge solution for achieving seamless integration is an Application Programming Interface (API), which enables the interconnection of software systems and data between businesses and third-party providers, representing a major step forward in streamlining workflows. Nearly two in three (65%) respondents in our survey nominated APIs as the IT feature they would most like to see incorporated into the tech they use, versus 29% who cited ‘security’ and 15% ‘blockchain’. More than half (59%) of real estate professionals would like to see APIs improved, ahead of other tech features, such as security (41%).
Drooms has opened up its API to its clients, meaning they can seamlessly integrate their VDRs with a range of software systems. These systems include real estate market analysis software that enable clients to consolidate fragmented data and make immediate comparisons of their portfolios against the wider market. This means data-driven decisions can be made quickly without having to log in and out of several systems, draw on various information siloes or work between applications.
With so many staff having to work from home across Europe, the fragility of companies’ IT networks has been exposed. It is now clear that for teleworking to work successfully then companies must implement adequate software tools. They must invest in high-functioning and secure technology that is going to optimise current workflows rather than demoralise their staff.
These tools must reduce pressure on servers, include appropriate data file sharing and storage systems, solve any issues with document formats and make data easily accessible to authorised people and teams, enabling access via a range of devices e.g. browser, app, mobile, etc. This latter function can be problematic given that the security in place inside company firewalls is completely different from that in homes, presenting a tough challenge for many companies.
COVID-19 crisis is likely to change attitudes
Many real estate companies have yet to fully address these issues. While some generic file sharing and storage systems can help companies, these can only provide make-shift solutions. For a complete and secure set-up, companies should look to specialised services, and ensure they take great care in vetting their providers.
The COVID-19 crisis is highly likely to change attitudes and focus company leaders’ minds on bringing about such changes – especially when they realise that a lockdown could be re-instated at short notice for some time, possibly even into next year.
(1) Source: Survey conducted between 28 January and 21 February 2020 by PollRight. The panel of 34 real estate investors covers both fund managers and investors across Europe.