Volker Buscher has given up more than just his time and expertise in his quest to prepare the property sector for the digital age. “I used to have long, flowing hair,” laughs Arup’s global digital services leader. “And as you can see, that is no longer the case.”
But Buscher’s loss is real estate’s gain. With more than two decades of experience in change management and hundreds of clients across the world, he is the man to have on speed dial when it comes to guidance on digital strategy.
Not just because he knows what he is talking about, but because he understand why, in many cases, the real estate world doesn’t.
“What we are trying to do here is introduce technology into a business landscape that an entire sector is not used to. The issue is not embracing technology. It is the fact that companies have to change their processes to get used to the technology. And that is a huge transition.”
Buscher’s role is to work with clients to help unpick that problem from the word go. To help them roll out digital strategies that will go beyond a tech innovation here and a time-saving tool there. He knows exactly what needs to be done to recalibrate an entire portfolio. He also knows it is no mean feat.
“It is not easy,” he concedes. “You need to be very clear about the outcome you want to achieve. There is so much innovation happening in niches. A bit of VR here, some BIM there. But that simply won’t add up to the outcomes most companies are trying to reach across their whole portfolios.”
With the added expertise of working across more than just one sector for Arup – “I am doing this for a lot of markets, including transport and energy, and they have different adoption curves.
All about Arup
Founded in 1946, Arup is an multinational professional services firm made up of independent designers, planners, engineers, consultants and technical specialists, working across the global built environment.
Best known for its engineering expertise, the group has 15,000 staff based in 92 offices around 42 countries and has worked on projects in 160 countries, including the Sydney Opera House, The London Eye, The Gherkin and the Beijing National Stadium.
“You wouldn’t touch a big transport programme now without a digital strategy without people thinking you were completely crazy” – Buscher is poised to help guide the real estate sector through its own transition to make it as smooth as possible.
And his first step will be helping companies realise that a commitment to good connectivity and energy-saving technology does not a digital strategy make. That and understanding the true value of tech.
Making the transition
“Proptech is an interesting symptom of where the real estate sector is in its digital transition,” says Buscher. “When the venture funds and tech investors start to realise the value of these sorts of technologies – which they are – the property sector should start to try to understand how they can gain from them financially.”
But that, he adds, will only be truly effective if an appropriate strategy is in place first. And, so far, most real estate companies are being too piecemeal in their approach, often without even realising.
“There are very few businesses out there that would look at the world we live and work in now and say ‘digital doesn’t matter to me’,” he says. “Most will then say ‘we have to do something. Let’s define what we want to change.’ And this is where we see one of three things happen.”
Buscher describes the three levels of digital strategy as “run, grow, transform”. He says the first applies to around 50% of the business he currently works with, which is to carry on with what they are doing with some enhancements and basic digital infrastructure.
“By this I mean broadband, wireless infrastructure, cellular infrastructure. Good connectivity, good spaces, flexible buildings. But that is the very traditional intelligent building approach.
“Grow refers to around 30% of the people we work with. They have the base-level stuff and then they go one step further and aim to be innovative in one or two areas. They say ‘I want to innovate my design processes’ or ‘I want to save costs here using this system’. They are basically asking ‘what can I do to make some changes without making life too complicated?’”
The third tier, transform, is what Buscher hopes everyone will eventually be aiming for. And, at the moment, just 20% of his clients are there.
There are very few businesses out there that would look at the world we live and work in now and say ‘digital doesn’t matter to me’
“They are saying ‘this is not how we want to work anymore’. They look at their whole portfolio, create a digital agenda for the organisation and want to benefit across each and every one of their capital projects.
“They might start with a demo project to learn some lessons but everything is geared towards large-scale deployment from the outset. The transform strategy has to be set up within a financial framework and proper governance models.”
There is no doubt this requires a major corporate overhaul. And Buscher has concerns that the UK has been particularly slow on the uptake due to the growing value of property.
“It is possible we haven’t responded as we haven’t been on a burning platform,” he says. “Here property businesses have had, and still have, a chance to increase their value without having to look explicitly at digital strategy.”
The right combination
But that won’t wash forever. On the comment made by MetaProp NYC founder Aaron Block earlier this year, that he would short the stock of any major property company that didn’t have a digital strategy in place, Buscher says he can see the sense behind it “completely”.
“Technology affects financing, acquisition strategies, operating costs, performance-related issues, the value of entire portfolios,” he says. And that is the other part of his role: showing the property sector where the value in digital truly lies.
“There is a combination of benefits,” he says. “The first is financial. People should be looking to present their portfolio as innovative and novel to be able to attract investors and partners who see themselves as modern.
“If you don’t have the right tech strategy now, there is a real danger investors won’t see you as being modern enough. We are already starting to see that happen on some portfolios.
“Then there are the operational cost savings; energy, security, maintenance. The ROI is usually around 18 months, sometimes shorter. And you obviously have to work out where you want to target that cost saving.”
He adds that, while comparably unquantifiable, user experience is potentially at the top of the list in terms of benefits to be gleaned from an effective digital strategy.
“It is very difficult to put a financial return against a design that successfully has the end user in mind,” he says. “But this could be the most important part of how you approach all of this.
“Take a smart city, for example. It doesn’t matter if you get every process in place, every service right – people still want to live in a place that is great. If they say ‘this is a modern place, an innovative place but not a great place’ then that’s a major problem. So experience is important. Even if it is something you can’t put a number against.”
Slow on the uptake
Back to his point on the UK’s comparatively slow digital uptake on a global scale, Buscher highlights some of the moves happening elsewhere in the world to recalibrate.
“In the US it is being fuelled by tech business growth,” he says. “You start with an employment base of 200, then you suddenly become 10,000, then 40,000 and you want to be 100,000.
“Somewhere between the 10 and the 40 you realise you can’t just buy new space, you need to manage your existing estate. It is almost impossible to do that on an Excel spreadsheet at that scale and so many of these companies are becoming real estate innovators themselves.
“Then take Singapore. This is an example of where digital strategy is built into the government framework. There is a smart programme and it is considered the fourth industrial revolution. And the big sectors that make up the built environment – property, water, transport – respond to that policy framework.
“In China there is less of a strategy but it is growing so fast that doing something new and exciting that doesn’t work can easily be written off as an experiment.
“Even at city scale where you do a smart city for 5m people and it doesn’t work, well you are building dozens of 10m-people cities all the time. So China can innovate very quickly, almost being a greenfield site from a technology point of view.
“Then you have pockets in Australia and Europe and this is usually led by the chairmen and senior execs saying ‘this doesn’t make sense. I have this tech at home and at work, when I am selling an asset, it takes four months to put a transaction file together.’ So it is usually an individual business leader. But there is not yet an industry-wide strategy.”
Until then, and for as long as he is in his current role, he will be giving his time, expertise and – if he could – hair to the cause. “I will be taking this idea of reimagining property in a digital world to the next level. And I would say this, tech is global even if the application is local. It is worldwide, it is happening and it isn’t going away.”
EG is international media partner for NYC Real Estate Tech Week from 9-13 October.
Click here for more information or to register.
Click here to find out how to get up to £150,000 of investment.
To send feedback, e-mail emily.wright@egi.co.uk or tweet @EmilyW_9 or @estatesgazette
