Indian real estate market: Technology's role in boosting efficiency and competitiveness of the sector

There was a time when the real estate development industry was known for its huge profit margins. However, with supernormal profit margins also came a lax attitude towards cost control and an increase in unnecessary expenditure. with no proper management systems to keep operations and expenditure in check, operational efficiency remained a concern. This trend continued up until the turn of the century, when things changed, especially in the larger tier 1 cities such as Mumbai. With growing inflation, the input cost required to build a home rose faster, in comparison to the sales prices of homes. Also regulatory initiatives such as the introduction of chargeable and fungible FSI increased the overall input cost sharply. This phenomenon, also known as margin compression, has been steadily impacting the real estate industry ever since, and it means that developers need to shift to a new playing field by adapting means and resources that reflect more of lower margin, manufacturing intent. And this is precisely where technology can help. Technology has been at the forefront, leading the operations of the real estate industry post the COVID pandemic, as things have changed from ‘real life’ to ‘real-time’. This has helped save time, resources, and costs, with the benefits aiding both, the buyers and sellers. Real estate tech is broken roughly into two buckets - operations tech and sales tech. Operations tech is more focussed on bottom line efficiency, and includes ERPs, 2D design tools, collaboration platforms and document management software. Sales tech is more focussed on top line efficiency and includes things like Virtual Reality (VR) and Artificial Intelligence (AI), and digital marketing drivers. Overview of some of the technologies and softwares the industry relies on: Enterprise Resource Planning (ERP) ERPs are software modules that manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. They also help in controlling wastage and leakages throughout the system. They especially help in planning procurement through a project’s life cycle, which has become even more important in the highly volatile commodity price cycle that we find ourselves in. Eg. Softwares like SAP, Farvision, etc. have departmental dashboards, which offer direct insight into the performance of various functions of the company or the project. 3D Designs Using technology to design in 3D takes away a lot of the speculation of costing and budgeting, and reduces time. You can also make changes in your 3D designs by reviewing each component of a structure individually. With this, you can save the time spent on physically drawing 2D designs. Eg. Softwares like Autodesk Revit offer realistic 3D renders, enhance collaboration and co-ordination, document construction, detect clashes, and aid in efficient planning and scheduling. Unfortunately the Indian landscape is not fully geared up to using 3D design tools as yet, though some of the larger players have started using them to some amount of success. Cloud Systems Collaboration is critical when creating a complex structure that combines engineering, architecture, and design, as one might expect. These systems make such collaborations available online through a metered system connecting different technical teams, ensuring all resources are on the same page and updated on the latest development in real time. Document management and release also become a critical aspect of this collaboration, and a DMS tool ensures seamless and accurate communications especially between the design and execution functions. Sales and CRM Platforms Online Sales & Customer Relationship Management (CRM) platforms ensure that leads are not missed, and are attended to in the appropriate time span. These softwares also help in keeping a track of sales figures and managing inventory effectively. Eg. Softwares like like Salesforce are flexible, offer easy management and optimised processes, and have actionable data dashboards. Virtual Reality (VR) and Artificial Intelligence (AI) Technologies such as VR and AI, giving the buyers a virtual walk through tour of the spaces, allowing them to get a look and feel of the areas and determine their feasibility. Giving the buyer an option to see the property before they purchase it boosts sales and buyer confidence. Going ahead, the future of the sector will depend on how the industry progresses technologically, and in order to stay competitive, real estate developers must look to adopt new technology and practices to truly embrace change. The author is Managing Partner of Viceroy Properties. Views expressed are personal. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.