Digitalization - Who pays for it? Who earns?
Cost and benefit perspectives for corporates, real estate developers and service providers.
by Marc Gille
After initial enthusiasm and initial disillusionment, the real estate industry has already gained initial experience in the use of digitalization in the operational phase of new and existing buildings. It is still not clear how the economic ecosystem will function in the medium term. Who will invest? Who will provide the services? What pays off, how and for whom?
The Corporate Real Estate Manager
CREM has it the easiest. Even before COVID-19, investments in meeting room and flexible workplace booking, access control, locating employees in the building or on campus and even measuring CO2 levels in company premises were already paying off with an attractive ROI. The transparency of space and workplace utilization and the smoothing of utilization peaks through intelligent booking alone pays off quickly: Only 70% of the space at the next lease renewal has a significant financial impact - or capacity for new hires while maintaining the same space at the location. Flexible distribution of employees according to activity type and current and dynamic team structure makes work more efficient and employees happier. And even the knowledge of CO2 concentration and its clear relation to your own - namely concentration in meetings - can be quantified.
COVID-19 has made it even clearer: instead of a shift plan in Excel, the bookable workstations are limited to the 2m office with booking-based tracing options, aerosol measurement via CO2 sensors and control of larger gatherings of people in the areas - digital 'back to office' can be rolled out in the shortest possible time.
Corporates have understood that this cannot be achieved with individual solutions and an app zoo. You need a corporate platform for building digitization like Thing-it provides.
Once a digitalization platform has been rolled out, the process continues apace: parking space management, e-charging stations for employees, internal or external catering as part of meeting planning, damage reporting, social networking - the spectrum is broad and tomorrow is still largely unknown here.
The real estate developer
The real estate developer has a harder time: even if, for example, the decision to digitize and a corresponding platform has already been made for the office tenant more and more often, he does not know: does this also apply to my tenants? Don't I want the big law firm in which the bastion of the permanently assigned partner office is the last to fall? Digitalization is not yet a toilet or running hot and cold water and therefore not even easily measurable 'in consumption' and apportionable in the service charge bill. And offering digitalization services separately is a completely new business model that you first have to get involved with and understand. However, direct benefits arise in the area of sustainability: evaluating the portfolio according to ESG criteria (https://www.immobilienmanager.de/esg-kommentar-klima-des-wandels/150/75094/) or the threat of tax burdens (https://blogs.pwc.de/insurance/tax-legal/nachhaltigkeit-steuern-steuerpolitik-als-wesentlicher-faktor-fuer-die-erreichung-von-nachhaltigkeitszielen/4831/) are motivation enough to invest in digital support here.
Interestingly, the same building blocks are needed here as in digitalization for corporates: BIM building structure, connection of building technology, but also integration of the user, as comprehensive energy management is not possible without the user: controlling the night setback or controlling the ventilation works better with knowledge of user behaviour. Energy management issues and portfolio evaluation against ESG criteria as well as attractive digitalization infrastructure for the tenant is therefore already a common bet - especially in new construction. And the more diverse the usage profile is: for campus and urban district developers, the district app is already a standard part of marketing.
The service provider
Facilities managers have been digital for a long time and CAFM systems are not a new discipline. However, full BIM, modern IoT sensor technology and indoor location determination, e.g. via Bluetooth beacon approaches, are not always part of these systems, nor are they easy to integrate into them. This is less due to the technology and more to established processes and contracts that do not fit with approaches such as on-demand cleaning. This also often dilutes the corresponding profitability calculations for digital initiatives.
Nevertheless, FM service providers are also slowly but surely turning to a digital infrastructure - from smart cleaning, catering, preventive maintenance, security technology and security patrols to the maintenance of green spaces. And, unsurprisingly, they are also ending up with platform requirements, in some cases far beyond the CAFM focus.
And even service providers that were previously only implicitly part of the service operation around the buildings, such as the surrounding restaurateurs, would like to deliver in building areas, accept orders and process payments digitally and contactlessly without having to take the detour via the corresponding food apps.
How does it all fit together?
So when corporates, developers and service providers invest in digitalization infrastructure: Will this end in a 'software integration wire tangle' like the one the financial services industry has known for more than 30 years, where it not only devours vast sums of money but also significantly inhibits business development (e.g. mergers)? Certainly not. It won't even pay off for a portfolio, let alone for the individual property. The fact that individual software development is wickedly expensive to implement and maintain should also have reached the real estate industry.
So what happens if the already digitized company moves into office space in an already digitized office building and obtains services there from an already digitized facilities manager? Will the BIM data be recorded again? Will sensors and building technology be connected three times? And also the access control system? Or if the office tenant 'gets a taste for it' by moving into an already digital property for the first time: can it then easily roll out to all locations what its landlord has started?
Ideally, all of this would work. But how can these things be shared - even if for a fee? The proud answer from hardware and software manufacturers 'We have REST interfaces?' is rather cute - it just means homogenizing the 'software integration wire harness' with regard to the technical protocol. After all.
First of all, you need to know what you are actually providing interfaces for. Data models such as the Industry Foundation Classes (IFC, https://www.buildingsmart.org/standards/bsi-standards/industry-foundation-classes/) for BIM or the Brick Schema for BIM (https://brickschema.org/) and technical assets such as sensors and building technology definitely help here. Especially when it comes to data management and analytics. However, this still does not clarify how the software modules and the user app interact with each other, how they behave and how their use is billed. Standards in this area will come - until then, you have to rely on the integration capabilities of the products and therefore de facto standards.
Thing-it already supports these integration aspects and will continue to align its interfaces with existing and established standards in the future. And with an app for all user perspectives and use cases, location and tenant boundaries.
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