Two-sided marketplace can unlock efficiencies for CREs
Even by the standards of startup culture - which speaks of backing a good idea and refining it into a full blown paradigm disruptor - the beginnings of 'Twitter' border on the ridiculously optimistic.
Try saying the kernel of the idea aloud to yourself. "It'll be a social messaging service, except not private, and we'll limit it to 140 characters". How confident would you be about sharing that idea with friends and family? Let alone pitching it as the next big thing, across the table from a hardnosed venture capitalist? Yet, this is a platform that now tracks the zeitgeist and what is 'trending'. Such is the power of a two-sided marketplace business model that targets unfulfilled needs, and facilitates direct interaction between suppliers and customers, creating value through an intermediary platform.
Online marketplace Wadi.com and real estate portal PropertyFinder.com are some standout examples of the two-sided market, in the Middle East. However, the B2C applications were only the first step in a world of better relationships and more efficiently addressed needs. With simplicity at its core, the two-sided is primed to unlock powerful efficiencies for the B2B market, using real-time data and transparency to transform how work gets done.
One such set of innovations the two-sided market approach is facilitating lies within the realm of commercial real estate services. IoT collated data, AI and Machine Learning empowered real-time analysis are enabling a new and proactive model of command and control, which will revolutionize how owners operate their commercial real estate assets.
Enterprise scale digital platforms bring forth the promise of leaner, more interactive Commercial Real Estate services (CRE)
Historically commercial real estate has been a huge family-tree of third parties, collaborators and vendors, branching off from every operational aspect. Can an IoT and AI based model resolve these complexities or will it add to them? It should be apparent even in a cursory glance that the industry is particularly fertile ground for disruption by the two-sided market. Every automation asset and associated service has a specialised and developed ecosystem around it. This is true of technologies and physical assets, as well as a complex array of relationships between the industry's dozens of stakeholders.
Portfolio-wide platforms can untangle this complex web within the CRE space. These digital platforms will enable an optimised and unified operational model, for the benefit of end-users as well as the businesses that service them. Both, commerce and functional efficiencies are empowered by the transparent, reliable and predictive model that such software solutions will help create.
In the context of commercial real estate, digital disruption isn't just about a few process optimisation features and some capability to crunch numbers on the go either. The contemporary customer expects the same convenient and real-time response from service providers, which they have become accustomed to in every other walk of life. For CRE businesses that hope to address such expectations with consistency, portfolio-wide digital platforms powered by IOT and AI, are the key to unlock complete system-wide transparency and real-time control. And with the two-sided market, this has become an affordable option for CRE owners.
The era of digital CRE
What exactly can one expect on the horizon for the CRE owners? Is this simply a better way to track assets and anticipate issues? How will investing in a digital platform set a CRE brand apart from its competition? The answers to those questions are actually rather unequivocal. These are not just small tweaks with which to claw out meager advantages. A commercial real estate business that adopts an enterprise scale digital platform is capable of radical improvements in their bottom-line results, unprecedented ability to deliver on sustainability goals, and outstanding occupant experiences.
The relationship between CRE owners and the many partners and vendors they rely upon is a critical behind-the-scenes aspect of commercial real estate. If even a single such service or amenity is sub-optimal, the entire operation is undermined. What this technology is capable of delivering is a completely integrated and optimal ecosystem. The promise is one of nothing less than complete operational flexibility, ease of operations and maximum potential for profit. The combination of IoT, AI and Machine learning gives an endless interdependent complexity the ability to be 'smart'. Digitised CRE businesses can align every physical asset and all workflows into a point focus, without oversimplifying any particular aspect in the least.
An innovation that will enable several more
In principle, enterprise scale unified platforms are quite similar to the core ideas behind Industry 4.0. So what exactly would be different here? Superficially, one could argue that there are more similarities than not, but real estate is a very particular set of parameters to deliver such a model in. Not many industrial applications would have to reconcile peak efficiency with customer experience, after all. What the cocktail of Connectivity, IoT, AI, Augmented Reality and Blockchain will enable in commercial real estate in the years to come, is likely to set itself apart from all such comparisons with other industries. Truly comprehensive and real-time software based digital platforms are going to be the new gold standard for the commercial real estate industry. And I firmly believe that any reservations that the current crop of CRE owners may have, are bound to be shattered in the wake of the unprecedented gains early adopters will make.
So let the tango begin.
Prabhu Ramachandran is the founder and CEO of Facilio. Views expressed here are his own and do not reflect newspaper's polic.