As history has shown time and again, technologies consistently disrupt established practices and replace old ways of doing business. With the demand for ever-increasing productivity and the need to streamline organisations and processes, digitisation is no longer a choice but a necessity to stay competitive.
Today’s digital transformation represents a realignment or investment in new technology, optimising work processes and customer engagement, whilst boosting efficiency to meet market demands. This is essential for companies to continue to compete. There has perhaps never been a time where this is more apparent than during the COVID-19 pandemic. This has had a huge impact on the way we live and work across the globe and brought about fundamental changes to organisations striving to adapt to a new normal. The pandemic has accelerated the implementation of automated technologies, but with the focus mainly on work from home (WFH) and more recently the return to work, other contributing factors driving this change have been largely overlooked.
While the steady rise of digitisation in the corporate sector has been picking up pace over the last decade with a continued increase in share of products and services, a global survey of executives by McKinsey highlights just how big an impact COVID-19 has had in accelerating this transformation. According to McKinsey’s survey, the adoption of digitisation and automation has accelerated by 10+ years across the Asia Pacific region in the first 8 months of the COVID-19 pandemic. This coincides with an acceleration in digitisation of their customer and supply-chain interactions as well as internal operations over the same period.
Now let’s look at two of the major contributing factors driving change: cost reduction and what that means for digitisation, and how digitisation is improving productivity in the workplace.
SG&A / cost reduction
With the challenges presented by the pandemic, it’s understandable that organisations have looked to cut costs as they address the uncertainties of a constantly shifting landscape. In fact, findings from a McKinsey survey of nearly 300 CXO’s reported organisations were targeting 10-20% cost reductions on average across all business functions. This is in conjunction with ‘cost management’ and ‘growth’ ranking in the top two of their top three priorities over the 12 month period, which on the surface would seem to be at odds with each other. With resources already stretched in many organisations, and no signs of this abating with current workforce shortages, it raises the question, how can these two seemingly opposing objectives be achieved? The answer comes when we look at how organisations plan to allocate spending, and this is where automation and digitisation takes a leading role.
Investment into Digitisation
With 61% of McKinsey’s respondents citing building digital capabilities as a top three priority, rising from 42% in the previous quarter, and predictions of an 11% decline in office support functions as a percentage change from 2017 to 2030, investment in automation is only going to increase as it takes on a greater role to support business functions. The additional investment recognises technology’s strategically important role as a critical pillar of the business and seen as more than just a cost saving initiative as demonstrated by the survey results below.
According to McKinsey’s survey “organisations that experimented with new digital technologies during the crisis, and among those that invested more capital expenditures in digital technology than their peers did, executives are twice as likely to report outsize revenue growth than executives at other companies.”
Productivity improvements through Digitisation / Digital transformation in the property industry
So what’s the key benefit of digital transformation? According to an article by AI Multiple, (40%) of executives point to improved operational efficiency, (36%) improved time to market and (35%) improved customer experience. In addition to these operational benefits, digitalisation is seen to be at the core of enhancing customer experiences and will provide organisations with a competitive edge over their competitors. This fundamental change of mind-set focusing on the customer as well as operational and IT improvements can generate (20-30%) uplift in customer satisfaction, (10-20%) improvement in employee satisfaction and economic gains ranging from (20-50%) according to McKinsey. Respondents also pointed to two critical drivers of their own digital transformation strategies as (51%) spurred by growth opportunities and increased competitive pressure at (41%).
The PropTech sector has been getting recognition since the late 1990s during the internet boom. PropTech, or property technology, involves all the tech tools that real estate experts use to streamline and optimise the way that people research, market, sell, buy and manage a property.
Now present in over 64 countries worldwide, the proptech sector has been driving disruption of the real estate and facilities sector through digitisation of a range of functions from online auctions to 3D building walk-throughs and everything in between. The number of innovation-driven proptech companies has only been increasing every year due to the immense benefits brought to the industry, with the top three biggest disruptors being construction technology (historically one of the more conservative sectors) and AI and Big Data analytics.
PropTech disruption has enabled the daily activities of almost every player of the property market, including facility and property managers, landlords, tenants, agents etc. as they continue to improve communication across all channels.
According to the PropTech Global Trends 2020:
- 80% of companies utilising PropTech have seen a positive impact on operations and services, with 70% seeing an increase in decision-making and finances.
- Investment in PropTech solutions is driven by a need for streamlined efficiencies (65%), cost-reduction (47%) and improved decision-making (44%).
Digital Transformation Strategy: Top ten benefits for success Artificial-solutions
- Deliver a better customer experience
- Improve collaboration
- Manage deeper customer insights
- Reduce cost of operations
- Make data-driven decisions
- Empower employees
- Create new business models, products and opportunities
- Decentralise production
- Handle compliance and effective risk management
- Maintain your business ahead in the market
While rapidly implementing new internal technology capabilities can be cost prohibitive, there are plenty of products on the market from innovative businesses looking to disrupt the status quo in their relevant industries.
From office managers to facilities managers responsible for individual offices or national portfolios dealing with antiquated legacy systems, we know the main challenges you face everyday: manual paper based systems or several disconnected spreadsheets, lost emails, back and forth phone calls with staff and contractors, making decisions based on ‘gut-feeling’ and many more.
Created from the same principles as FMClarity, Ratesmiths is another groundbreaking Australian company in the property industry that has automation in its core. Their innovative marketplace is the answer to many of the problems faced by tenants and fit out companies, and are revolutionising the way businesses source and select their ideal design and fitout partner.
Designed to support everyone from the office manager involved in their first office fitout to seasoned professionals. Starting from the moment the office lease expiry is uttered by the executive leadership, to completion of the office fitout, their range of education resources, tools, templates and tender portal streamlines the procurement process. By reducing reliance on word of mouth referrals that limit access to a rich market they provide access to a better range of suppliers that can be quickly matched by price, project size and project/ business capabilities to support tenants to achieve the best value from their office fitout.
Driven by their mission to provide an independent source of truth on the quality of service providers in the design and fitout industry, Ratesmiths is the first marketplace to introduce a rating system to the design and fitout sector as they look to rebuild trust across the industry through independent client ratings. Almost two decades of knowledge and experience is fueling innovation as they strategically position themselves as the independent experts in the industry.
Technology is here to support organisations to achieve the next level of productivity in your workplace. While developing systems internally can be cost prohibitive and time consuming leading many organisations to prioritise capital for other projects, the rise of innovative players in the PropTech industry means you’ll never need to look far to find the right solutions that can be easily implemented to streamline your internal processes. Ratesmiths is one of those innovative problem solvers.
Learn more or book a demo today at ratesmiths.com