Digitisation of property management

Today we already benefit from digital and virtual products. New forms of living and working environments are changing our living environment. But at the latest since the corona virus we know that digitalisation is more than just a feature.

Marc Lorenz

Published on March 12, 2020

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Without digitalisation in its simplest form, the home office, the slump in productivity in the coronavirus shock would probably have been virtually impossible to manage in almost all sectors of the economy.

The "digital natives" demonstrate that the transformation process from the analogue world to digital reality is not only feasible, but rather both desired and necessary. The networking of areas of life, in the simplest case life and work (or work & life) is perceived as normality by digital natives. Information is divided according to addressees and made available in the cloud. This way of interacting prevents breaks in processes and ensures that information remains available even if individual members of working groups fail. In contrast to digital processes, the analog world is not organized in a cloud, but is usually sequential. If a link in the chain fails, the corresponding process comes to a temporary standstill.

Why do property management companies lag behind the development?

The residential sector was able to escape digitization for a long time. The sheer volume of new terms and concepts is already driving most classic property managers in Berlin into a cold sweat. What is a socio-structural transformation process in connection with digitization? Why does a small apartment suddenly have to be a micro apartment and what are APIs or the Cloud? It should not be forgotten that on the other side of the "digital natives" is an ageing society. But here too, developments are in full swing. Those over 70 years old today are by no means clueless when it comes to handling the latest technologies; they have long since recognised the benefits of digitisation for themselves and are among the most grateful users and early adopters of new trends. According to the commandment "I stay @home instead of a retirement home", the own home offers completely new possibilities to maintain the independence of older people much longer than ever before, thanks to technical support systems. Self-determined living in old age has so far been given even less consideration in future housing projects. Although barrier-free construction methods involve higher costs, they will generate high returns in the long term. This fact will continue to pose major challenges for the existing housing market.

Property managers must shake off the dust

For a long time, the classic property management companies acted as if the topic of digitisation was none of their business. In many property management companies, digitization was and still is understood to mean the transfer of introduced "proven" analog processes to ERP systems. This isolated view of internal processes neglects the most important component of modern real estate management, namely the networking of all persons, entities, systems and information involved. A fundamental and a recurring criticism of classic property management is the lack of transparency. Anyone who has ever gained insight into an old-school property management company in Berlin will understand that this deficit is not only a question of corporate culture, but rather of being caught up in maximally analogous processes. The self-image of property management in 2020 must therefore be to manage, connect and inform. Wherever there is management rather than administration, the focus is not on the company's own processes, but on the customer and the property.
There is no alternative to transforming the classic property management company into a modern, data, process and service-driven enterprise. Process speeds as well as the flow of information independent of time and location are only two parameters that digital property management has ahead of classic property management.

Management Dashboards

For a long time, digitization was understood as the optimization of communication between existing systems. In the best case, the company benefits from systems that communicate smoothly with each other, but the customer usually does not. The reporting, for almost one hundred percent of the owners and thus the clients of the property management, was limited over generations to unclear, almost always outdated and badly prepared Excel statements. Only with the understanding of and the understanding for the requirements of the customer (!) to the digitization the traditional interface philosophy has moved away. The owner and property management customer wants access to the key figures of his property portfolio. He expects a tool that is independent of time and location. This is where the real potential of digitised real estate management lies: more transparent portfolio management, fast and secure access to real-time data and, as a result, a better understanding of the portfolio for decision-making on a solid basis.

And the daily business?

Digitisation plays out other strengths in day-to-day operations. The integration of building services engineering into technical facility management and the connection of external service providers (e.g. meter-reading services) reduce costs, accelerate processes and have a positive effect by making unforeseen measures (accidents) recognisable in advance using sensor technology. Workflows in tenant management, which can be triggered by tenants via service portals and integrate tradesmen and management, reduce travel times and costs.

The soft skills of digitization

Best comes last. Anyone who has worked their way up to this point will perhaps have realised that digitisation serves mankind by eliminating breaks in processes, ensuring that properties function smoothly and, last but not least, has a positive influence on the relationship between landlord and tenant, thereby increasing satisfaction. Tenants who live in harmony with their apartment, their management and thus with the owner, recognize a true value. They are happier tenants. In the broadest sense, digitization thus gives room for hedonic price increases.