The rapidly expanding use cases of data science and big data analysis have now penetrated the Real Estate sector, an industry which is poised to touch $4,263.7 billion globally by the year 2025, as per Grandview Research.
The capability to make better data driven decisions results in improved efficiency and cost savings for the entire stakeholders of the real estate industry. Some of the immense benefits of a seamless availability of data and better informed decisions for the sector include-:
- Reduction in construction, operations and maintenance costs of real estate projects and equipment.
- Avoidance of time and cost overruns of projects
- More effective project planning and execution
- Less accidents on sites
- Better ability to drive customer loyalty for repeat purchases
- Better contracts and other documents management
- Significant savings in O&M through better warranty management
- More effective sourcing through well-organized vendor management
- Better compliance with government regulations
A data-driven approach also significantly lowers the OPEX of real estate players by enabling consistency, objective decision making, standardization & benchmarking, comparing against benchmarks for course correction, availability of insights for better informed decision making, predictive analytics etc.
Even a 5 percent reduction in cost of rebars and cement can save crores of rupees in a single project. That is the power of data driven decisions.
Enhanced Market Outreach
Real estate buyers face a host of choices and options when it comes to purchasing a property. This makes it difficult for realtors to understand what property will interest a particular set of customers?, how will they zero in on numerous potential clients? The answer to that is data driven decisions.
While agents still dominate the industry in reaching out to end customers, data analysis tools are now precisely capturing customer sentiments and expectations. This has enabled realtors with improved targeted marketing by acquiring the customised requirements of customers.
Prevailing Challenges in Indian Real Estate Sector
Real Estate operations generate huge volumes of data including-
- Research to identify the best locations to set up new projects at
- Project design, planning, budgeting
- Construction operations
- Lead generation and management
- Contracts and document management – partners, suppliers, government, customers
- Property maintenance and management
- Society formation, conveyance, and handover
Some of the major challenges facing the real estate industry are lack of established processes to identify and capture useful data, lack of awareness about the availability of technology to capture, analyze and use this data for better-informed decision making.
The largely unorganized nature of this industry that has a few large names and a huge mass of unorganized sub-contractor and labor supply industry comes as another challenge. The most common inhibitor to the data-driven approach in the real estate sector however comes as a lack of awareness regarding how technology deployment can drive breakthrough improvements in profitability, timeliness, and quality of projects.
Besides lack of awareness, the availability of specialized technology products and service providers is another challenge in this industry.
Also, sourcing, construction, operations, and maintenance processes in the real estate sector are full of inefficiencies, due to the largely unorganized nature of the bulk of the industry. Even the large known brands have to depend on subcontractors from the unorganized sector for some of their activities.
Many of the large IT service providers who also provide services to this industry treat this as just one of the many verticals they service, and a relatively small sector in comparison with the other sectors like BFSI, Telecom, etc that they are active in.
IT In Indian Real Estate Sector
The Indian real estate sector is fairly new to the concept of deploying IT in its operations. It is however experiencing increasing openness, especially at a point when the industry is going through troubled times and most players are looking actively for ways to drive efficiencies in their operations.
The government of India has also been very active in deploying technology for transparency and efficiency in infrastructure megaprojects, which is driving visibility for the good technology can do in the real estate sector too.
In the near future, as the networking technology continues to progress, it will create increasing amounts of data in and around structures, their use, and their users, further boosting innovation and disruption in the segment.