Professional Services Software Development – Maximizing Business Value and Impact in Commercial Real Estate
20 March 202319 March 2023 | Software
Table of Contents
- Overview of Challenges and Emerging Trends in the Real Estate Sector
- Real Estate Digital Transformation Positioning for Stakeholder Buy-In
- Guiding Digital Innovation in Professional Services Sectors — Real Estate Software Development Partnerships
Overview of Challenges and Emerging Trends in the Real Estate Sector
With costs related to maintaining legacy systems amounting to almost 60-70% of companies’ IT budget, real estate has been slower to deploy new technology solutions compared to other professional services sectors.
The reason behind this reticence, as a KPMG Global PropTech survey points out, is that many real estate firms perceive proptech as a cost rather than a priority, choosing to rely on realtors’ experience, local knowledge, and rudimentary tools like Excel for their day-to-day operations. As such, fragmented IT systems with low levels of integration across applications and functions are predominant within this sector, resulting in organizational silos, task duplication, and inconsistent data reporting.
However, the change in industry dynamics following the COVID-19 outbreak shifted the consensus around the importance of digital agility. A recent EY report shows that navigating the challenges of remote working models and new policies limiting the future carbon footprint of built environments has forced real estate stakeholders to reconsider their attitude towards tech adoption. Companies across the real estate value chain opened up to the idea that technology is no longer an option, custom software becoming a key element in accelerating their decision-making process and securing their competitive edge.
At the same time, the post-pandemic digitalization of the real estate industry has also been driven by the focus on occupants’ health and wellness and the gradual increase in demand for flexible spaces. Standard corporate offices are being transformed into technology-enabled workspaces meant to foster team collaboration and emphasize company culture. JLL predicts that 30% of US office spaces will be flexible by 2030, with the spectrum of flex spaces ranging from short-term leases to coworking memberships and on-demand workspaces.
Based on a report from Arup and the Ellen MacArthur Foundation on “Realising the value of circular economy in real estate”, having flexible spaces gradually gain traction represents a shift in paradigm from a wasteful, linear economy model to carbon-neutral circular real estate business strategies. Another trend announcing this change is the real estate organizations’ growing interest in recapturing the lost value resulting from construction and demolition operations.
For the last few years, the real estate ecosystem has been working towards decarbonizing building operations and materials, currently representing about 40% of the total global carbon dioxide emissions. Companies are rushing to define and set net-zero carbon targets to reduce waste and reuse building materials. With carbon embedded in nearly every phase of building construction and operation companies must rush their decarbonization programs to be able to contribute to the EU’s target of climate neutrality efforts.
Yet, achieving those targets depends on having fully integrated digital infrastructures that ensure data transparency and efficient management and tracking of recycled materials across the value chain.
While most real estate organizations lack in that department, embracing tech adoption at all stakeholder levels and nurturing collaborations with professional services software development providers can help them reap market benefits. That is to say, early adopters of innovative technologies such as cloud-based solutions, artificial intelligence, IoT sensors, and RPA have the opportunity to check off items on their environmental, social, and corporate governance (ESG) agenda by leveraging improved system integration, automated workflows, and advanced data capturing, processing, and analytics.
Real Estate Digital Transformation Positioning for Stakeholder Buy-In
Digital transformation in the professional services segment goes beyond technology. Think of it as a series of interconnected changes that redefine the organizational culture, internal workflows, and customer experiences, reverberating across multiple business stakeholder groups with conflicting needs and expectations.
Thus, getting buy-in for digital transformation projects relies on clear communication of the operational efficiencies at every level and the ROI driven by technology adoption. This includes addressing stakeholder fears that might hinder the implementation of new tools and technologies and setting proper expectations for how the digital transformation process will unfold. Such steps will help reduce resistance to technological change within the organization, build trust, and encourage participation by removing the unknown and mapping out a tangible vision for the future.
The digital strategy should also be positioned as a critical tool for delivering on the company’s strategic goals. To build a business case for technology adoption, real estate firms should first uncover the connections between their digital and business strategies. These business results have to be translated into desired customer outcomes, emphasizing the best ways to deliver business value.
Illustrating how an investment in new technologies can help real estate companies deliver on their business strategies and achieve those customer outcomes will require a long-term business capability roadmap. This roadmap will uncover capability gaps and serve as a guiding compass for upcoming organizational changes.
Furthermore, organizations in this sector will also have to keep track of results to maintain stakeholder support across multiple budget cycles while navigating the path established by the business capability roadmap. For that purpose, real estate firms need to build a well-defined success measurement framework that establishes actionable KPIs for digital transformation performance. Although the ROI can be difficult to measure in some cases, our Digital Transformation in Professional Services firms survey identified a series of positive effects unlocked by digital adoption, including new business opportunities (30%), improved collaboration (23%), competitive advantages (21%) and access to new revenue streamlines (16%).
Finally, effective digital transformation at real estate companies requires a sponsor to lead the proptech initiatives and encourage a culture of innovation. The 2019 KPMG Global PropTech report indicates that for most real estate organizations, the sponsor role is attributed to the owner, CEO, a board member, or, in some cases, another non-digital person.
Guiding Digital Innovation in Professional Services Sectors — Real Estate Software Development Partnerships
One of the main barriers to digital transformation in professional services niche segments like real estate is the lack of in-house tech capabilities.
As off-the-shelf technology solutions available on the market tend to solve specific problems and have closed technical architectures lacking integration capabilities, companies often end up with a siloed patchwork of systems that fails to accurately respond to emerging trends and evolving customer expectations. Despite the high initial cost, custom-developed applications are perceived as a better alternative by being designed to accommodate specific business requirements and integrate with existing apps.
Under constant pressure to innovate and maintain their competitive advantage, many real estate companies collaborate with a software services provider to bridge the technical expertise gap and leverage access to a large talent pool, cost savings, and accelerated time-to-market. Choosing the right technology partner for your business needs can make the difference between incurring sunk capital costs on ineffective digital initiatives and harnessing the operational benefits of integrated real estate software development solutions across all business layers.
With a highly skilled and scalable team of 1,000+ software engineers and consistent processes perfected in 18 years of experience, Fortech can fully guide professional services firms in the real estate sector throughout their digital transformation journey by providing an extensive range of services, including end-to-end custom software development, cloud migrations, software testing, and RPA implementation services. We support our partners in building and speeding up the product delivery roadmap and collaborate with in-house teams to complement and scale up their capabilities for high-quality, scalable real estate software development solutions that fully respond to their business needs.
Fortech has previously partnered with a US proptech company to expedite the product delivery process for a real estate management platform that aimed to facilitate interactions for a growing community of residents and help landlords/operators develop efficient property maintenance workflows. The final product enabled the client to deliver the main functionalities of the property asset management platform on time, level up the resident experience, and increase the user base from 600.000 to over 4 million while maintaining top performance. Review our case study to learn more.
If you want to further explore our client success stories, please visit our software development for professional services page. To discuss a potential software project, we recommend you contact our professional services team and schedule a call.Fortech
Christina Gurgu, Growth Manager - Professional Services
After 20+ years of providing services to clients in various industries, Christina Gurgu joined Fortech in 2021 as a Growth Manager to establish a new strategic direction focused on supporting Professional Services firms.
Her professional experience, customer relationship management skills, and deep understanding of the professional services industry enable her to provide prospects and clients with the support they need to access Fortech’s custom software development services.