Editor’s Note: Discover the compound effect of tech
Earning interest on the interest is one of the most tantalising of all financial teachings. Does the modern tech world open the possibility of recreating this famous multiplier effect in the buildings and property ventures we create?
What will be the compound effect of running our projects and portfolios more efficiently? Anyone who has read James Clear’s excellent book Atomic Habits will know the impact tiny actions can have on almost anything we choose, at work and at home.
Are we now reaching a point where we can measure the compound effect of decent new kit in real estate? If you can save dozens of hours a month by handing a mundane research exercise to a machine learning software like Leverton to read documents and flag issues, what will you be able to achieve in that time saved? (No one likes to talk about job losses, but they are inevitable, with huge salary savings.)
Another scenario comes from the psychological impact of trying new things. If an asset manager takes the plunge with VTS and likes what they see, it should inspire her to take another adoption decision, taking a surer procurement path the second time. The better we become at trying new things, the more practiced in our choices and implementation, the more we will attempt. The result of the whole will be greater than one part.
Automation presents another potential compounding scenario. Take automated invoicing. Using a simple plug-in like the fintech star Xero, a bookkeeping application founded in 2006, to automatically send invoices to tenants should mean more time for doing the valuable landlord-and-tenant work such as responding to customers. At the same time prompt invoicing means you should get paid quicker and the cashflow gets stronger, allowing for more investment.
Layering different sets of data on top of each other is another area techies are always talking up. Getting propcos to understand what they own and record it digitally is the fiddly step many are grappling with as they approach first base. Once the figures and timings for energy usage, occupation levels, lease breaks, pedestrian flows, and a hundred other activities in and around buildings are known and viewed in real-time in one place the gains in decision making, asset management and value creation are likely to be massive.
Using mobile devices to record and digitise repairs, equipment locations, complaints and readings out on site means less information will be lost on the way back to the office and the time lag of waiting for it to be entered before it can be read and acted on will be eliminated.
We talk about being more efficient but do we have the tools and processes to achieve the most efficient operating model? As James Clear writes “we do not rise to the level of our goals, we fall to the level of our systems.”
He urges readers to scale it down, make a start. Don’t worry about transforming your business into a digital powerhouse, just attend one event, read one article, let one tech supplier into your boardroom to pitch. You might like what you see. It might become a habit.