The Future of Real Estate Procurement is Digital - Really Singapore 24/2/20 09:17

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The Future of Real Estate Procurement is Digital

! B2B, Digitalisation, Marketplace, Procurement, project management, Proptech, Real estate, Technology " October 11, 2019

Written by Rachael Renovah

# REAL ESTATE AND PROCUREMENT TODAY

In today’s procurement landscape, bottlenecks involving tenders and change requests
$
still exist. The traditional procurement process, currently abided by most of the present-
day firms, is time-consuming and causes easily-avoidable errors.
%
Living in today’s digital age and ecosystem has redefined many aspects of our lives. Take
& our personal lives and the way we currently purchase for example. Online purchases are
but now only a click away. Product comparison and sieving through reviews are easily
achievable within a matter of minutes. Within minutes, we can become quite confident in
making informed purchase decisions.

Procurement processes within a B2B setting, however, is far more cumbersome and time-
consuming. Businesses are expected to profile, source and review purchases at the
approval of the entire finance, procurement and some even management or a
committees team – which lengthens the entire process by double becaus of the various
avenues of consent needed. Making it a less than desirable process for most PMs…

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According to CBRE: “80% of project savings result from stages preceding construction.”

In essence, frustrating contract gridlocks in this murky phase of tendering and bidding
process can still be eliminated before the execution stage – so long as we are willing to
address them.

NEXT-GENERATION REAL ESTATE

PROCUREMENT
The overarching theme, within the next 5 to 10 years, for real estate procurement lies in
digitalisation. Businesses are just beginning to ride on the burgeoning Proptech trend to
address common inefficiencies in vendor and bid management processes.

In general, the Proptech ecosystem covers the idea of combining real estate and
innovative technologies to deliver customer-centric value and operational efficiency
across the real estate value chain. With a $20 billion investment mark set this 2019, the
sector is expected to evolve as an enabler for the B2B market in a way that has never
been possible before.

HOW IS PROPTECH GOING TO IMPACT ME?

If you are a property manager or a real estate investor yourself, chances are you’re likely
to be part of the proptech experience already. Proptech seeks to come into the
procurement value chain in various ways.

From intelligent supplier profiling to automated bid contracts, proptech leverages on

advanced technologies to improve some of the poor project management principles
within traditional procurement processes at current.

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Poor transparency

A shortcoming especially in terms of weak oversight and controls over procurement

management. Reports found that poor transparency is also inherent in bid-rigging due to
a lack of legal literacy.

Poor IT security

Proptech is now influencing traditional project management firms to adopt end-to-end

encryption. With the use of public ledgers, blockchain can help ensure authenticity in
bidding and cut suspicious documents.

Poor lead time

The procurement department is also considered one of the weakest in data

management as compared to other real estate segments. Extensive and repetitive
administration processes which usually involves thorough proposal amendments and
contract filling can easily be automated real-time.

WHY CURRENT PROCUREMENT PROCESSES ARE

UNSUSTAINABLE

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One of the issues is the lack of a clear and inclusive benchmark system or process that
allows buyers to feel confident about their choices. On a global market, any sort of
sourcing request might return with an answer, but the current marketplace is divided into
many sub-markets which makes it near impossible to get a comprehensive and
accessible benchmark.

As such, project managers are restrained to the limited pool of existing providers within
their network. These ‘lemon markets’ (Akerlof) lack transparency and are not as effective
and sustainable for project management as we think.

SMARTER MARKETPLACES AS A SOLUTION FOR

ALL
Presently, there are only a few mobile procurement solutions within the market. The
adoption of these solutions increases but still at a galatial pace, considering the
perceived security issues and the obstinacy in the culture of Fintech. However, customs
within the procurement process are slowly changing for the better, such as the
automation of purchase orders.

Firstly, smart marketplaces should have the ability to intuitively filter and profile vendors
based on their current offerings and previous track records. (Features available within the
Really tool!) Similarly, project managers should undergo a standard qualification process
to verify their working experience, past track record and professional certifications in their
respective service line. This helps build user confidence in an open and highly
professional network of genuine vendors and contractors.

Secondly, comprehensive product details are imperative in closing the extensive

informational gap between vendors, clients and their project managers. For projects
which grant more flexibility in procurement requirements, buyers should be able to shop
freely through product catalogues and effortlessly drop-in enquiries. (Features that can
be found within the Really tool!)

Ultimately, such ideal smart marketplace facilities should aim to improve the end-user
operational efficiency for both vendors and project managers.

THE RESULT OF DIGITALISATION AS AN ENABLER

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Consequently, real estate players should be able to improve their workflow efficiency with
digital time management tools. Smart marketplaces should be able to intelligently
identify and benchmark the specifics of each item. In essence, each and every service or
product should be easily sourced and comparable regardless of their origin.

To combat poor lead time, the ability to perform thorough profiling also means that
project managers need not painstakingly sieve through thousands of profile across
numerous products for their suitability. Such marketplaces should be able to intelligently
filter out relevant prospects based on necessary project requirements. In short, project
managers deserve to reduce their hours spent on irrelevant products and services, and
focus on maintaining healthy client relationships and managing risks and project
timelines.

WHAT REAL ESTATE STAKEHOLDERS CAN

EXPECT

Ironically, ensuring effective procurement management likely involves getting traditional

procurement out of the way in the long run.

Technology will play a pivotol role in this transformation, but not without the use and
deployment of end-users like project, property and facility managers as well as all
relevatn stakeholders and clients, and finally the suppliers – vendors, contractors and
providers. A user-friendly procurement experience can certainly be achieved if we are
open to embracing new-age technology that serves to support workflows, making them
more efficient and smarter. For one such tool, check out Really Singapore. Singapore’s first
integrated project and property management, e-procurement and open marketplace
solution.

Don’t forget to share!

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