Hi Daniel, you are now working for Credit Suisse Asset Management Global Real Estate as a Digital Transformation Manager. How has your personal journey been so far?
Just after my Bachelor’s degree in Business Engineering, I worked for a large German industry company in Corporate Real Estate Controlling. During 2015 and 2019, I worked for a business consultancy in Frankfurt with a focus on strategy and transformation projects in the real estate sector. In parallel, I was honored to participate in the MBA Digital Transformation Management program at Goethe Business School. Thereafter, in summer 2019, I joined Credit Suisse Asset Management as a Digital Transformation Manager, leading transformation projects for our Global Real Estate business as well as managing the cultural and people change management. Besides my professional career, I had the great chance to do a seminar in Digital Real Estate at University of Zurich in 2020 and 2021.
So, you are combining professional expertise in Digital & IT with Real Estate know-how. What do you find interesting about Digital Real Estate?
Amongst globalization and sustainability, digital transformation is one of the societal mega trends of today and will accompany us tomorrow. Be it in a private as well as in a working environment, digital technologies and innovation are changing nearly everything. As a digital native, born in the mid-1990s, I am used to using technology in my daily life and I am expecting digital tools in my working environment as well. However, whilst some industries are constantly moving towards digital excellence, others are still lagging behind. Speaking for the real estate industry, the implementation is still at its early stage. On a side note: Real Estate is the largest asset class in the world and constitutes more than half of the world’s assets, thus having a massive potential for digital transformation – and I am looking forward to playing an active role in this exciting journey.
Can you tell us about the status quo of digital transformation in Real Estate?
We do already see different trends affecting the real estate industry. As an asset-intensive sector, business operations are more and more building on available data that is mainly coming from internal sources. In this context, organizations are starting to make use of Artificial Intelligence and Machine Learning tools for data analysis and interpretation. Besides, COVID-19 has strengthened the usage of mobile solutions as well as the implementation of Augmented and Virtual Reality support, e.g. for property visualization and leasing processes.
Nevertheless, and as mentioned earlier, the real estate industry is still far behind other sectors such as Automotive or Pharma. Even though digital transformation is seen as a relevant field of action, most organizations are still at the early stage of their transformation journey – whilst in the meantime, so-called PropTechs (from “Property” and “Technology”), are ready to revolutionize or even disrupt the industry.
And what challenges do you see for the industry’s transformation?
Obstacles to digital transformation are diverse. Not without reason, business students are used to the phrase “Culture eats Strategy for Breakfast” - many studies have already shown that digital transformation will only be successful if people are willing to support the journey. Especially for traditional industries, acceptance to change is often a major (cultural) challenge. That is why open and transparent communication as well as a well thought out people change management approach is key for success. Besides, transformation management requires the right talents – and it is no secret that personnel resources are scarce.
From a data perspective, the real estate industry is lacking transparency as well as standards and guidance on how to make best use of the available data. A transition to a data-driven business is hard if high-quality data is either not available or the organization is not able to use it. Organizations are giving away a chance to build a competitive advantage, meaning a boost in process efficiency and massive improvement of their decision-making capabilities. A lack of transparency and availability makes the transformation even harder from a cultural and change management perspective. Without making data available to the end users, it is hard to pitch for the value of data – or would you believe that “Data is the new oil” if the value-add from data is not tangible within your organization?
On the other hand, are there specific opportunities for real estate businesses?
As mentioned before, the real estate industry is having massive amounts of data. This data needs to be centrally available to the organization and its members – at any time and from everywhere. There is massive potential coming from the usage of Data Analytics tools, e.g. for strategic and operational decision-making. Data Science and Artificial Intelligence will not only favor the automated analysis and interpretation of real-time data but also allow for making predictions on future operations. Data will therefore have a growing impact on business success.
With smart home, smart offices and smart cities on everyone’s lips, the Internet-of-Things will play a strong role in the digital transformation of the real estate business. Sensors are not only capturing and processing property and energy data (and therefore enriching the data basis) but will also enable data-based building operations. With that, processes will become more cost-efficient and at the same time contribute to building sustainability and tenant wellbeing.
Last but not least, I am certain that also the Blockchain technology in a sense of asset tokens and smart contracts will play a role in the transformation of the real estate sector.
Do you have a personal recommendation on how to move transformation forward?
I think it is no question that the real estate sector needs to get up to speed and keep the pace with other industries. Here are some key recommendations that I would give to organizations to do so:
- People Change – Get the right people on board as active supporters of the journey. People willingness and organizational culture are key success factors for change.
- Stay Curious – Foster a culture of learning and testing. Good ideas can come from everyone and from everywhere. Failing is no reason to feel ashamed.
- Ecosystem – Stop thinking in silos and start to collaborate with your external partners, startups and competitors. Be open and foster agility and flexibility in your organization.
- Value of Data – Pitch for the value of data and make sure you have the right data in-house for your processes. Use insights from data to strive for operational excellence.