Faced with market pressures, there’s never been a better time for CRE companies to digitalise processes and create cost-effective digital self-service for customers, tenants, suppliers and investors. With the right technology, achieving a leaner business is easier than you might think.
The current landscape
The Australian commercial property market is valued at billions of dollars, with major cities like Sydney, Melbourne and Brisbane leading in investment and development. However, like most industries, the commercial property sector was impacted by the COVID-19 pandemic, specifically by waning demand for office and retail property. As the market rebounds, research by Deloitte has found that:
A top priority for commercial real estate companies in 2024 is expense mitigation.
Yet, traditional approaches to CRE operations are holding the industry back, making it difficult for businesses to achieve cost savings. Let’s take a closer look at this challenge and how OutSystems’ high-performance low-code platform is helping CRE companies to quickly and easily modernise their operations via cost-effective digital processes and self-service capabilities.
Barriers to expense mitigation
In the post-pandemic period, keeping costs under control has never been more important for CRE companies, yet due to business complexities, it’s hard to achieve. It’s no secret that manual processes and paperwork-heavy transactions plague the sector. Spreadsheets remain prevalent, with companies using them for reporting (60%), property valuation and cash flow analysis (51%), and budgeting and forecasting (45%). Further, many commercial property players continue to rely on legacy technologies, often designed for specific tasks.
Deloitte reports that over 60% of global real estate owners and investors still depend on legacy technology infrastructures.
Reliance on traditional manual processes and outdated technology ecosystems translates into countless opportunities lost for the commercial real estate industry.
Digitalisation = cost efficiency
Savvy players are breaking down barriers to expense mitigation by adopting new technologies and digitising processes that help them streamline their operations, significantly reduce costs and forge a competitive advantage.
One such company, a diversified property group that owns and actively manages a billion-dollar portfolio of high-quality Australian real estate, came to us seeking to revamp their capital expenditure (CAPEX) approvals process. The CRE firm relied on a combination of manual business processes (spreadsheets, emails and phone calls) and a document management system to handle capital expenditures, which they recognised was inefficient.
In just 8 weeks, PhoenixDX helped the company build a digital CAPEX approvals solution using the OutSystems platform. The new web and mobile application seamlessly integrates with the business’s financial modelling system and its ERP, digitising and automating the CAPEX approvals processes and workflow end-to-end.
The digital solution dramatically streamlines the company’s CAPEX approvals process from 1 month to hours.
Reviewers and approvers now have the ability to self-service – quickly reviewing, commenting and progressing the CAPEX process from anywhere, anytime. Similarly, project managers can track the progress of their requests. Approved submissions are seamlessly and automatically set up in their ERP.
The success of this initial project opened up a whole new unified application architecture strategy for our customer. Using the OutSystems platform, they went on to build a layer of cross-system applications on top of their core systems, such as SAP, Anaplan and Yardi. This allowed them to create end-to-end digital processes that better meet their commercial property needs with respect to procurement, financial reporting, contract negotiations and changing regulations.
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