Everyone in the commercial real estate space appears to be talking about new technology and its application in the commercial workplace environment. So, what is Proptech? The technology used in the property space is colloquially referred to as ‘Proptech’. We are familiar with discussions around big data, IoT, AI, Robots and Apps, but the Proptech movement is now talking about how this can improve the Workplace experience.
Proptech is following on the heels of Fintech (financial technology). Fintech revolutionised the crusty world of banking. Fintech gave us the ability to access our bank accounts online as well as peer-to-peer lending, micro-financing and crowdfunding.
The conservative world of real estate has been equally slow to see the benefits of the technology revolution. Yet there is a huge groundswell of talent that is being financed by billions of dollars that are challenging the way that real estate is traded, used and operated. Real estate is the largest fixed asset class in the world and the one that underpins most economies and pension funds. These developments thus have the potential to change all our lives and how we interact in what is still the most expensive asset on our collective balance sheet.
This sector describes technology-based platforms which facilitate the use of real estate assets. The assets can be land or buildings, including offices, shops, storage, housing and other property types. The platforms may simply provide information for prospective users and sellers of space, or they may more directly facilitate or effect rent- or fee-based transactions. This sector supports the real estate occupier markets.
Fintech describes technology-based platforms which ease the trading of real estate asset ownership. The assets can be buildings, shares or funds, debt or equity, freehold or leasehold. The platforms may simply provide information for prospective buyers and sellers, or they may more directly facilitate or effect transactions. This sector supports the real estate capital markets.
Smart Buildings describe technology-based platforms which facilitate the operation of real estate assets. The assets can be single property units or entire cities. The platforms may simply provide information about building or urban centre performance, or they may directly control building services.
For the purposes of this article, I want to concentrate on this third area which is the one that directly supports and influences Workplace and Facilities Management.
Buildings today need to integrate people and systems functionally and dynamically.
Commercial buildings are evolving to cater to changes in technology and workplace behaviour. New opportunities are being presented for efficiency and enhanced asset and workplace productivity. Occupiers are demanding buildings that act as a virtual gateway to connect people both within the office and around the world.
Workplace & Facilities Managers need to provide safe and secure settings, ubiquitous network connectivity as well as functional space. The provision of an IOT enabled environment will enable improved business productivity.
With more employees being concentrated in smaller spaces and the increased demand for dynamic, collaborative areas there is a growing need to optimise space for the productivity and efficiency of employees as well as the building itself.
Workforce productivity can be achieved through universal network accessibility. This enables scalable growth, unified communication and multimedia engagement methods. This is facilitated by in-building cellular coverage such as DAS (Distributed Antenna Systems) and small cell technology, seamless Wi-Fi connectivity, collaborative AV solutions and communication through digital signage.
In addition to this, workforce behaviour is being influenced by social and economic drivers. This is placing a greater focus on how our lives and experiences are improved with technology.
Supporting a BYOD environment, enabling collaborative business communication, achieving regulatory compliance and overcoming the restrictions of legacy systems presents many challenges.
Enabling the Internet of Things in a commercial building allows you to analyse your environment. The ability to make real-time adjustments will improve efficiency and productivity. This will unlock Workplace performance and reduce occupancy cost.
The property industry has lagged behind business when it comes to embracing new technology. The consensus, however, appears to suggest that this is changing and the advent of Proptech means that we are entering a world where technology has the power to transform not only our workplaces but our relationship with it and consequently the experiences we able to enjoy.
Despite the use of technology we need to understand that humans are still critical to the delivery of superior workplace experience. It is uniquely human to engage in relationships, and we are working at a time where there is a premium to be had on excellent customer experience through engagement and relationships.
Research carried out by Dr Danielle Sanderson at the School of Real Estate at Henley Business School suggests the human still holds the aces and the keys to the bottom line. “Machines can do the job, but they cannot replace the power of personal contact.”
So despite the technology takeover, we’re not yet thankfully in a world where the robot can trump the human when it comes to providing the best workplace and service experience.
Post-occupancy feedback suggests that crucial areas of experience satisfaction or concern are around communication, responsiveness and the understanding of business needs. All these are within human capability.
So while AI, machine learning and robots have the potential to cause massive disruption within the property industry, there is still a key role for humans in the process of building, buying, selling, occupying and servicing real estate. After all, we all still need to be persuaded, convinced, cajoled, reassured, advised and applauded. It is these vital customer connections that are the ones which transform a transaction into an experience that has the power to multiply the bottom line. To date, robots are not capable of achieving this.
As we travel further, we are more exposed to a greater number of leisure and retail experiences in our personal lives. We naturally expected our workplaces to follow suit. It is essential therefore that the Workplace and FM industries need to become more focused on the Workplace experience.
Most of us are aware of what is coming down the line in terms of the Internet of Things (IoT) and how this can be applied in the Workplace. I welcome IoT and its capabilities in assisting us managing the workspace, but like all new technology, we should be careful how we adopt and use it.
Steve Jobs, the founder of Apple said, “You've got to start with the Customer experience and work back toward the technology - not the other way around.”
The late Apple visionary understood the importance of the Customer experience. By focusing on the needs and wants of Customers, Apple was able to create some of the most revolutionary products from the iPhone to the iPad. The genius of Steve Jobs was turning industries on their heads by starting with the experience.
In our rush to apply the technology, we need to be mindful of the experiences we are creating. For instance, we have been remiss on the majority of occasions in the way we have applied the open-plan office configuration. There is nothing wrong with the philosophy of open-plan. It is the inappropriate application that has caused the counterproductive experience.
When it comes to the implementation of technology, we need to be equally careful. We need to be circumspect in not disguising efficiency and cost reduction initiatives as improving the Customer’s Workplace experience. My experience tells me that these two concepts are strange bedfellows.
Workplaces need to be viewed holistically to ensure that their spatial, cultural and technological components are aligned but we also need to recognise that there are fundamental differences in the focus of different Workplaces, their output and the requirements needed in servicing them.
All work happens somewhere, and all workplaces and their users require the provision of a conducive space, environment and services in order to be productive.
But for most people, ‘Workplace’ brings to mind a typical corporate office environment.
These environments are increasingly supporting knowledge workers who require a variety of different work settings in order to maximise their productivity. The currency of these workplaces is the experience that supports the human production line, the organisation’s competitive advantage as well as its brand.
In these types of 'Hi-Touch' environments, it is precisely the 'touch' that is important. I am of course not referring to the inappropriate laying on of hands, but to some form of human contact. The human being is a pack animal and we crave the human touch. This is particularly true in when trying to design 'moments of magic' in your customer journey through the building.
Proptech can walk hand-in-hand with the customer experience by providing the occupiers with a remote control in a format that they're familiar with i.e. their mobile device.
Occupiers are able to control their domestic appliances, security and access their banking via their smartphone so why can they not access the amenities that we provide in their commercial work environment?
A Proptech App would allow us to sit in our Customers pocket to get a better sense of their experience and satisfaction in real time. This is now expected and allows us to act upon issues in a more responsive manner.
In a recent survey by HqO occupiers are crying out for tech-enabled amenities and services. Tenants want to be able to choose the technology they want for their workplace. The survey shows that Apps for daily conveniences are top of mind for occupiers. 75% of the workforce will consist of millennial's within seven years, so it is no surprise that mobile apps are infiltrating the commercial workplace.
Workplace and Facilities Managers cannot be back-of-house players any longer. We need to be out front conducting and creating superior workplace experiences that allows us the unique ability to unlock workplace performance for our clients
In the survey by HqO, occupiers were asked to choose technology that they wish their office building incorporated. The findings show that Apps and daily perks & conveniences are on the minds of tenants.
Customers seem to like a seamless, efficient brand experience, particularly when it comes to tedious tasks like grocery shopping and banking. Automation in these situations has allowed Customers do what they need to and get out without too much forced brand interaction.
This has allowed both institutions to reduce their costs significantly by handing off this approach to customer interaction in much the same way as Uber and Airbnb have done so successfully.
The downside of this is the removal of the human side to brand interactions. Which is the antithesis of most marketing strategies in service organisations. As humans we crave emotional connections with other human beings.
While the odd automated retail or bank branch maybe seen as a benefit, if automation is rolled out on a wider scale in our workplace, our satisfaction with these brands could suffer. This will likely depend on what kind of impression an organisation wants to leave on its employees but as we have seen from the West Coast tech companies the workplace has become the battleground for talent attraction and retention and as a facilitator of improved employee engagement.
If it’s important to your brand to appear forward-thinking and innovative, by all means staff your Workplaces with robot representatives. But if your brand is one that prides itself on having a human touch, you’ll probably want to give them a miss and leave to your Workplace and Facilities Management provider.