How is digital modernization impacting the real estate industry?
Digital modernization is the strategic integration of digital technologies to transform existing traditional and non-digital business processes, services and infrastructure.
Digital modernization addresses several challenges that have long plagued the real estate industry, including lack of visibility into current and historical bidding/job costing, inability to understand margins, reliance on outdated legacy systems, human capital constraints, lack of standardization, and disconnect between field and office.
Lack of Visibility in the Real Estate Industry
One of the primary challenges in real estate is the lack of visibility into current and historical bidding and job costing, which makes it difficult for companies to understand margins and impacts on business, such as revenue and profit forecasting.
Many companies also rely on outdated legacy systems that lack integration, leading to scalability concerns and manual work. Human capital constraints further exacerbate these issues, as manual work often leads to inefficiencies and scalability concerns. The lack of standardization across departments or divisions and the disconnect between field and office also affect the transfer of data and overall communication.
Financial Process Challenges
In addition to the above challenges, the real estate industry faces challenges in financial processes across four categories: Cash Management, Accounts Payable (AP), Accounts Receivable (AR) and Financial Planning and Analysis (FP&A). These challenges include inaccurate tracking, delayed payments, data inaccuracies and difficulties in accessing data for decision-making.
Utilizing existing functionality, integrating core systems, implementing an xFPA solution, reimagining and streamlining processes and automating workflows can help overcome these challenges and improve overall financial efficiency.
What Questions Should Real Estate Professionals Be Asking Themselves?
About the people…
- Where do you have instances of institutional knowledge that present risk?
- Have your employees complained about the difficulty of existing system functionality or the lack of systems that increase their daily workload?
About the process…
- Are your finance and general operating functions generally accurate and efficient?
- Do you consistently meet deadlines and leverage financial data in key organizational/strategic decisions?
About the technology…
- Are systems in your tech stack reliable?
- Do systems in your tech stack offer you a competitive advantage?
- Where are you not using tech to minimize the mundane, eliminate manual processes and drive informed decision-making?
The Impact of Digital Solutions
Data analytics, Enterprise Resource Planning (ERP) systems and intelligent automation are a few solutions to combat these challenges.
Data analytics have been demonstrated to improve job margins and planning across projects, as well as to increase revenue, optimize spend and maximize capital, all of which can aid in making more informed decisions. ERP systems reduce technology stack while improving capabilities. Intelligent automation can streamline processes, condense manual work, reduce human costs and expand employee capacity.
How Can Schneider Downs Help?
Leveraging our extensive expertise in finance and accounting, digital solutions and the real estate industry, our team empowers real estate companies to enhance their project and business outcomes by utilizing technology to provide greater insights, automate processes and enable them to concentrate more on their core business activities.
Questions? Contact the SD digital team at [email protected].
About Schneider Downs Real Estate Services
The Schneider Downs Real Estate industry group provides accounting, tax and consulting services to clients nationally and internationally. Our real estate group meets our clients’ needs by providing value-added solutions in all areas of real estate ownership, including commercial, industrial, residential, multi-family, student housing, hotel and land development.
To learn more, visit our Real Estate Industry Group page.
