In a candid interaction with Enterprise ITworld, Kaustav Das, Head, Prime Business, Highbar Technocrat shares detailed insights on how a data driven approach is proving to be a boon for real estate players
Below are the excerpts from the interaction-:
1. What are the major challenges upfront the real estate developers in structuring the abundant data available to improve on their margins, customer base?
Some of the major challenges the industry is witnessing are lack of established processes to identify and capture useful data, absence of awareness about the availability of technology to capture, analyze and synthesise this data for better informed decision making and also the largely unorganized nature of this industry which has a few large names and a huge mass of unorganized sub-contractor and labour supply industry.
Enhance timeliness of project execution, avoiding time overruns, which in turn lead to cost overruns. Through years of experience, our engineers observed and documented opportunities to streamline project management and created a 5-Dimensional Digital Project Management Platform, that combines the power of 3-Dimensional Architectural Modeling and SAP ERP while adding our innovation to provide real-time 3-dimensional digital dashboard with time and cost as the two more dimensions added to it. The approx. Rs. 9,000 Cr. Nagpur Metro project is currently being managed using our 5-Dimensional Digital Project Management Platform. We are working closely with the Ministry of Road Transport and Highways (MoRTH) for digitalising their project management platform to simultaneously manage close to 150 large road projects across India in a centralized manner.
Capture and analysis of all this data and comparing it between projects and across timelines can provide immense insights to real estate companies, that can help them:
Reduce costs by identifying ways to reduce wastages and use of resources economically. For example our Rebar Optimization Solution was created based on the insights gained on the use of reinforcement bars in construction over the years. Our engineers observed that huge amount was being wasted due incorrect bar length usage for specific purpose leading to huge lap lengths. Subsequently they came up with algorithm to identify most optimal length of bars so as to leave minimum length of cut pieces balance. Even a 5% saving in cost of rebar usage can save crores of rupees in a large construction project.
2. What are the other major benefits of data driven real estate apart from analyzing the age, design, location of the structure and the spending capacity of customers?
Data driven, better informed decisions can deliver immense benefits to the real estate industry including but not limited to:
- Reduction in construction, operations and maintenance costs of real estate projects and equipment
- Avoidance of time and cost overruns of projects
- More efficient project planning and execution
- Reduced accidents on construction sites
- Enhanced ability to drive customer loyalty for repeat purchases
- Improved contracts and other documents management
- Better compliance with government regulations
- Better time and cost estimation of projects
3. What according to you is slowing the pace of a data driven approach in the real estate sector?
The most common obstruction to data driven approach in real estate sector is lack of awareness of how technology deployment can drive break-through improvements in profitability, timeliness and quality of projects.
Apart from lack of awareness, availability of specialized technology products and service providers is another challenge in this industry. A host of IT service providers who also provide services to this industry consider this as just one of the many verticals they service, and a relatively small sector in comparison with the other verticals like Telecom, BFSI etc.
With a legacy in developing and implementing technology in the construction industry, Highbar has the necessary focus, depth and breadth of technology expertise. We rarely come across direct competitors with a specialized pedigree and capabilities portfolio in the construction sector.
4. Does a data-driven approach significantly impact the OPEX of a real estate player? your views
Systematic processes for capturing, cleaning, storing, organizing and analyzing data to draw insights are rarely visible in the industry. A lot of activities and decisions happen through gut feel and tradition. To that extent, the OPEX is fairly person driven and not process driven.
A data-driven approach will significantly reduce the OPEX of real estate players by enabling objective decision making, consistency, benchmarking & standardisation comparing against benchmarks for course correction, availability of insights for informed decision making, predictive analytics
A reduction of as low as 5 percent in cost of rebars and cement can save tons of money in a single project.
5. How India fares against the developed nations in this regard?
Globally, the real estate sector has been a relative laggard in IT adoption in comparison with most other sectors of the economy. Indian real estate sector is fairly new to the concept of deploying IT in their operations. However we are witnessing increasing openness, especially during the time the industry was going through troubled times, since most players were looking actively for ways to drive efficiencies in their operations. The government has been very active in deploying technology for enhanced efficiency and transparency in infrastructure mega projects, which is driving visibility for the good technology can do, in the real estate sector too.
The SAP implementation done by Highbar at HCC is actually being showcased by SAP to their global clientele and prospects in the construction sector as a “Center of Excellence”. To that extent, with infrastructure overhaul in the process, smart cities coming up, we can foresee increased adoption of technology in real estate projects too.