Smart Design, Devices, Platforms, Integration, and People are the key ingredients for creating the Smart Building and Smart Asset Management Industry of the future.
The way that businesses operate has completely transformed over the past decade with the convergence of innovation and technology, while the transition to a multi-generational workforce has upended our established approach to work, people, and the environment. The focus on cost reduction and efficiency of our outdated models of asset management has swiftly been surpassed by more dynamic, agile models that aim to enhance health, safety, sustainability, productivity, collaboration, experience, and wellbeing. These factors are even more important in a post-pandemic era.
The property sector itself is going through a monumental shift and a time of seismic disruption. The nature of property as an asset has fostered many hurdles to progress and transformation with the sector becoming a laggard in the evolution of industry 4.0. Some of these factors include: long-termism views on investment; unaligned stakeholders and contracts; fragmented value chains; siloed lifecycle stages, prolonged underfunding of R&D and technology; lack of workforce diversity rates; and finally heterogeneous products.
Asset Management Dynamics
While the sector has traditionally been a laggard, the tide is turning. We are now seeing trends with larger Commercial Real Estate (CRE), Facility Management (FM) and Owner/ Managers (OM) firms understanding the need for change and opening up to new concepts; with a particular focus on workforces for the future, smart buildings & spaces, and on-demand experiences. This is evidenced by the emergence and acceleration of the PropTech sector and industry-leading Asset Management companies setting up accelerators, collaborating, co-creating, integrating, and developing products and new processes to meet evolving dynamic environments.
Moreover, the Asset Management industry is set to grow considerably in the coming years. Research by MarketsandMarkets estimates that the Facility Management sector is set to grow by an astonishing 66% from 2020 to 2025, estimated to be worth USD 65.5 billion by 2025. Furthermore, according to Fortune Business Insights the Global Property Management market is predicted to reach USD 23.63 billion in value by 2026. This figure does not take into account the growth that will be experienced by suppliers of this sector.
In order for the industry to manage heightened societal and customer demands, industry growth, and the digital and cultural transformation required, it must be underpinned by the emergence of a new norm of operating and managing assets by converging the physical, digital, and people aspect into integrated operating models.
Covid-19 and the current political environment has created new challenges and forces and accelerated existing trends, which include:
- Integrated Services
- Multi-Generational Workplaces
- Dynamic Environment
- Health and Safety
- Sharing Economy
- On-Demand Customer Service
- Prioritisation of Wellness
- Customer Personalisation
- Smart Technology & Workplaces
- Smart Buildings
- Diversity and Inclusion
- Talent Gap
- Technology Adoption
Today, we are beginning to see the first-mover advantage, which could possibly lead to future industry consolidation with a few dominant players. This will accelerate the industry’s transformation through economies of scale and saturation. As we are predicting steeper adoption rates; societal, resource, and client demands will also become key drivers underlying this need for change.
The Digital Transformation
The Future of Asset Management – fuelled by innovation and technology.
The definition of PropTech varies – depending on who you speak to – but it forms a part of the greater digital transformation of the built environment and pertains to the different stages of the assets lifecycle, including Asset Management. This digital transformation will enable smart buildings, cities, and communities to be interconnected. According to Fortune Business, the global smart building market size which stood at USD 43.64 billion in 2018 is projected to reach USD 109.48 billion by 2026. The creation, deployment, and adoption of this technology will profoundly impact the role of Asset Managers and how assets are managed in the near future.
There is a myriad of technologies that have and will deeply augment Smart Buildings and Asset Management, such as; the Internet of Things (IoT), Smart Devices, Smart Platforms, and Apps, Artificial Intelligence, APIs, Virtual and Augmented Reality, intelligent Building Management Systems (iBMS), BIM and Digital Twins. These are just a few of the technologies that will fundamentally change how modern buildings are designed, built, managed, and used. Coupled with critical infrastructure coming of age, such as 5G and next-generation batteries, the possibilities are boundless as 6G, Edge Computing and Quantum Computers arrive on the scene.
According to a recent Deloitte survey, 90% of organisations do not have the right type of workplace to enable digital behaviours and culture which are going to be paramount for survival in this new norm created by the pandemic and buildings, workspaces and its managers will form a major part of this journey.
Today, tomorrow, and the creation of our new norm
Asset Management will continue to evolve its traditional manual and analogue processes to a digital environment. This will require integration and greater collaboration with the other ecosystem players in the value chain. As the sector adapts to the current demands and trends; and adopts the above mentioned technologies, we will see an inflow of the new talent that will be required and an upskilling of the current workforce to achieve the delivery of this transformation. Assets will be managed by utilising technology, and talent will be deployed as required through data-driven insight to enable better and more accurate decision making. Asset Managers will not be managing assets, but rather people, technology, and outcomes. The typical reactive role will transform into a proactive and predictive approach, with a greater emphasis on operational excellence through the information gathered by technology. This will allow for real-time management of all aspects of the asset with the additional element and emphasis being placed upon the experience, health, and wellness of the asset and its digital and built environment.