Controlling of real estate projects increasingly cloud-based

Digitalisation in the real estate industry by emproc SYS GmbH & Co. KG

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Controlling of real estate projects increasingly cloud-based
Corona accelerates development enormously

Project management in the real estate industry and especially controlling are currently undergoing drastic changes. Experience shows that economic crises have a delayed impact on the sector, as the real estate market generally lags behind economic developments. How the Covid 19 pandemic will affect the real estate industry in the long term remains to be seen. However, one thing is already certain: all processes that can be digitised will receive a strong boost.

Compared to other sectors, the real estate industry is currently still in the middle of the pack when it comes to the implementation of digitalisation. The representative benchmark study "Digitalisation Index for SMEs" commissioned by Deutsche Telekom shows corresponding results. But digitisation is worthwhile, as even individual measures, such as the use of PropTechs, generate digital added value and have a positive impact on the revenue development of the companies.

Some real estate segments and asset classes are under observation due to the corona-induced economic situation, as construction sites are partly lacking employees or materials. Investments in German real estate are also already weaker than recently because investors are holding back strategically. Which segments of the industry will be among the winners and which among the losers will depend significantly on digital acceptance and efficiency.

The basis for these changes is the existing cost pressure and increasingly complex real estate projects that have to be managed and controlled by several people. The aim of cloud-based project controlling is to ensure that the project goals are achieved within the planned budget. It includes all activities that are necessary to implement a project according to plan and efficiently. However, integrating all these processes into controlling is becoming increasingly difficult with conventional methods because project development in the real estate industry is characterised by increasing complexity.

The first choice to control awards, use of funds or outflows of funds has been Excel. However, the maintenance of sensitive data by several people can prove difficult. Getting started with a complex Excel spreadsheet is far from easy, as is updating data. There is great potential for errors, which can result in expensive opportunity costs.

Digitisation and interfaces to other systems are the key words here: project controlling in large real estate companies is now increasingly carried out digitally via integrated IT systems and, to an increasing extent, cloud-based. The industry will change in the wake of the crisis and digitalisation: On the one hand, specialised niche providers with small but technologically mature solutions will establish themselves, on the other hand, generalists with a broad service portfolio will (continue to) successfully serve the market.

Company-wide use

The efficiency of project controlling in the real estate industry is largely determined by the quality of the available data material and the interfaces to third-party systems. Thanks to digitalisation and new controlling tools, data is now more easily and live available.

The establishment of efficient, digital organisational processes represents the essential element of successful project controlling. Access to current data in real time, the evaluation of any dimensions of the projects by several users with appropriate access authorisations keeps these systems fast and up-to-date. This creates additional transparency as well as considerable savings potential in operational project management.

At the beginning is the concept

The basis of the controlling concept is the design of a company-wide digital IT platform that contains all project-relevant data. It enables the integration of the individual controlling components of a project development.

- Project development begins with the acquisition of a property. A project budget is defined.

- The planned costs are determined by a quantity surveyor. They correspond to the economic targets of the development calculation.

- The orders are automatically recorded via interfaces in Controlling. The creation of efficient processes is of particular importance here. In parallel, the actual creation of the object is started.

- Changes to the planned project budget are examined for their economic impact with regard to the overall project planning.

The coordination of these activities and the digital processes among each other is crucial for success.

Pitfalls in everyday project work

Digital platforms that are not yet integrated throughout the company and information that is fragmentary or outdated hinder functioning project controlling in practice. Another problem is the consolidation of data if it is available in different IT systems.

If digital workflows are not precisely defined, the cost basis is not created at an early stage and controlling principles are not sufficiently implemented in the project, this has consequences: The result is a lack of transparency of the individual projects, which makes it difficult to gain an economic overview and leads to additional coordination and organisational effort in the preparation of meaningful project reports.

Controlling tasks are growing ...

Today, more than ever, it is the task of controlling in project development to create an instrument with which complex interrelationships of individual processes can be mapped digitally and transparently and their effects on the company can be shown. Here, controlling not only has a system-coupling function by bringing together, analysing and evaluating digital information, but it also performs a system-building function by establishing a company-wide IT process organisation that allows operational tasks to be completed efficiently and promptly and thus creates the basis for the goal-oriented management of individual projects and the entire company.

... possibilities of controlling grow with it

Today, the availability and evaluability of information is ensured throughout the company by software. The existing database can satisfy the information requirements of all report recipients by setting up a hierarchical reporting system. Both the aggregation of data material and the analysis of condensed figures are possible without major effort in digital platforms.

Based on the available information, the incoming invoices are finally checked digitally, confirmed depending on the release hierarchy and payment is initiated via ERP software. At this point at the latest, the digital comparison of the planned costs with the actual costs incurred is possible via reporting, so that the necessary transparency is also ensured.

About the author

Moritz Koppe - Diplom-Ingenieur Architektur | Immobilienökonom (IREBS) | Managing Director emproc SYS GmbH & Co. KG

Moritz Koppe, born in 1978, studied architecture and real estate economics at TU Munich, RGU Aberdeen, the Faculty of Economics at the University of Regensburg (IREBS) and TU Dresden. From 2007 to 2010, he worked as head of general and cost planning for gmp Architekten on the A-Plus project at Frankfurt Airport. In 2010, he moved to emproc GmbH where he is, among other things, project manager of project control costs at Munich Airport as well as in construction monitoring for various banks. Since 2019, Moritz Koppe has been managing director of emproc sys, publisher of the multi-project controlling software PROBIS.

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