Smart Tech, Smarter Buildings. Five Lessons from PropTech Professionals
By Ilka van Heerden, Head of Strategy & Pursuits, Structure Tone UK
Last Friday, Property Week hosted its second annual Tech and Innovation Forum, bringing together industry voices to discuss PropTech trends and innovation in real estate.
Panellists across the day shared a breadth of knowledge and tangible learnings surrounding forecasted trends, defining value, interrogating AI adoption and navigating business transformation.
Distilling such a wealth of intelligence into a single summary isn’t easy, but here are my top five take aways:
1. Tech is a must have – but do we really know what we want?
Not that long ago, tech was just a ‘nice to have’ and was often value engineered out of projects but today it is increasingly becoming a ‘must have requirement’ across the board.
Just days before the conference, MI5’s Director General, Sir Ken McCallum, shed light on the potential significant risk that AI and cyber poses. On a global scale, the tech companies that once dominated the stock markets are being infiltrated AI and cyber brands.
In the built environment, RICS has reported an underwhelmingly low adoption of AI, which suggests that we aren’t quite ready as an industry to fully embrace the opportunities of tech or be resilient to its harm, either in our operations or our projects.
2. A dumb building might be the next stranded asset
Not all new buildings have smart tech embedded as standard, and retrofitting existing ones takes time and investment. But as investors want future proof stock and tenants demand high-spec space, there is a risk that sub-par buildings will simply lose their economic value. While this is a call to action for the real estate industry to look for solutions across large-scale portfolios, smaller scale developments do not always have the resources to transform their empty or rented stock. So, how do we ensure that all buildings maintain long-term economic value as we move forward into a tech-centric future?
3. Money alone is not a sufficient metric for value
While technology is clearly driving economic value, it shouldn’t be the only metric by which we measure return on investment. When it comes to communicating the value of smart buildings, we need to first start with understanding our client’s building challenges. From there, we need to demonstrate results that show not only economic benefits but the compounded benefits across sustainable improvements, operational efficiency, business resilience, and human experience. Not forgetting – the risk of not embedding tech.
4. AI shouldn’t be the goal
It may seem counterintuitive, but all the while we are extolling the virtues of tech and AI, it is important that they aren’t the goals in and of themselves. Whether it is for your business operations or a project for a client, it is critical to have clarity on the challenges that need resolving and what the desired outcomes are and then figure out how to use AI and/or tech systems to get you there.
Often, senior leadership who have not grown up with tech are better equipped than digitally-native younger generations, because they are starting with the question ‘what does good look like’, not automatically turning to tech for the way forward. On the other hand, C-Suite staff are often expected to make business critical decisions about technology that they have limited knowledge about, when they wouldn’t take that risk in any other business area.
5. Adoption is a people problem, not a tech problem
Digital transformation is a fundamental business change; it is not simply introducing a new magic tool that staff can use or fear being replaced by. Successful adoption relies on strong leadership, board level buy-in, and advocates throughout the business – it must include meaningful collaboration with IT teams, but it can’t just be left to them to shoulder the responsibility.
When it comes to working with an AI tool specifically, it is helpful to think about it as a new or junior member of staff. With this perspective, you start using AI as a helpful assistant that you can delegate tasks to and will save you time, while you are still the expert and decision maker. You then start thinking about how to teach and train the tool, in the same way you might with a new starter. This approach reminds us that the buck stops with us. We would rarely just blindly accept and approve work done by a new joiner without checking it first, and we shouldn’t do that with AI either. An organisations’ strategic advantage is still its talent, and decisions still need to be made by humans.
Final thoughts on the forum
With so much to think about when it comes to tech and smart buildings, it can be easy to feel overwhelmed. But in this somewhat traditional industry, there is a hive of innovators that are ready to take us on a journey to propel the built environment into the future.
While technology is something to be harnessed, the foundation of the real estate industry is, and will also be, its people. So, if we can embrace the opportunities of PropTech and mobilise meaningful change, we can create resilient businesses and a truly future-proofed built environment.