Transforming Real Estate Operations with Robotics and Cognitive Automation

In today’s competitive environment, robotics and cognitive automation (R&CA) technology can be a game changer for real estate (RE) companies, helping reduce errors and increase operational efficiency. To date, the RE industry generally has been slower to adopt digital technology effectively, as reflected in the operational inefficiencies that plague the industry, including the use of manual to semi-automated processes in key functions such as finance, property management and portfolio management.

Understanding R&CA Technology and the Benefits

R&CA essentially replicates human actions and judgment at tremendous speed, scale and quality, all at a relatively lower cost. Robotic process automation (RPA) uses software to automate many manual, repetitive and often rules-based processes and tasks.¹ Cognitive automation uses machine learning capabilities for judgment-based processes and predictive decisions. Natural language processing, natural language generation, machine learning, cognitive analytics and sensing are some of the cognitive capabilities that can revolutionize RE ecosystems.

To understand how R&CA can benefit the RE industry, consider how many RE companies continue to use spreadsheets for recording, collating and analyzing data for cost aggregation, lease administration, invoices, accounts payables, property valuation and forecasting. A deeper dive into a typical RE company’s lease accounting and administration processes suggests that many documents-such as lease agreements, deeds, brokerage contracts, vendor payables and credit applications, property management agreements and property tax assessments-are still maintained in a physical (either scanned or spreadsheet) format. Substantial time is often spent reading, manipulating or abstracting paper or digital documents for relevant information. This tends to result in sub-optimal utilization of data and employees given that different departments often work in silos.

RE companies may also be challenged to perform in-depth analysis on lease accounting data if the data is not structured in the desired format. Consequently, they may need to employ dedicated teams to define parameters and analyze the data in order to perform advanced analyses and capitalize on the insights locked within their documents to make informed decisions.

Moreover, the high level of human involvement in back-office operations can increase the probability of fraud and error. Research suggests that most errors in the accounting and tax functions, for example, tend to be the result of someone deleting spreadsheet formulas, making incorrect manual calculations, using multiple sources of data input, and storing sensitive data on unsecured devices.²

How R&CA Can Improve Operational Inefficiency

The implementation of R&CA, including RPA, can eliminate inefficiencies inherent in many finance and accounting tasks, including lease accounting and administration, invoice processing and payroll management by:

Optimizing costs. RPA can decrease costs drastically and may even end up being cheaper than offshoring.³ R&CA software can enable processing 24/7/365 without breaks and holidays.

Improving speed and accuracy. RPA can accomplish mundane and cumbersome tasks, such as extraction and digitization of data from lease contracts or invoices, faster and more accurately than people can.⁴ Studies have shown that using cognitive technology to generate actionable data from unstructured documents can increase efficiency by four-and a-half times compared to traditional processes.⁵

Streamlining record management. Optical character recognition with cognitive technologies can enable converting lease records, invoices and other essential documents that are usually recorded manually or scanned into formats suitable for reporting and analysis.

Enhancing compliance and risk monitoring. RE companies can automate many of their risk and compliance monitoring activities using RPA. For example, tracking invoices for compliance with contractual terms, and periodic review of lease contracts to avoid any potential risks of tenant defaults of contractual obligations can be easily automated.

Enabling informed decision-making. Use of cognitive extraction technologies, such as natural language processing, would allow companies to cull relevant data and information from unstructured documents fairly quickly. RE companies could employ a variety of tools and technologies to convert the unstructured data into a structured format, from which the data can be easily visualized and used to generate actionable insights.⁶ For example, converting lease data into a structured format could benefit property management, lease administration and billing processes by making it easier to integrate the data and store it in a more centralized manner.

To tap the potential benefits of R&CA technology, consider evaluating processes and tasks that can be automated, the technology implementation approach and possible adjustments to their talent strategy.

Evaluating Processes and Tasks

When assessing current processes and tasks that may lend themselves for RPA and cognitive automation, respectively or collectively, following are some key attributes for RE companies to consider:

-A large volume and repetitive nature of work

-Scalability through addition of labor

-High incidence of errors

-Use of traditional workflow tools

-Budget constraints that are limiting system modernization

-Workflows where decision-making is based on disparate systems

Roles requiring perceptual human skills, such as handwriting recognition or facial identification, and other cognitive abilities-planning and reasoning, for example-could also be considered. Based on Deloitte’s analysis of some of the key jobs in the RE sector, many property appraisal, budget analysis, accounting, bookkeeping, and auditing and property management tasks appear ripe for RPA application. RE companies may even consider using R&CA technology for future cash-flow projections, billing, payables processing and payroll applications.

Evaluating the Technology Implementation Approach

Along with assessing processes and tasks, RE companies would need to evaluate the technology implementation approach that they wish to pursue. This decision will largely depend on their budgets, estimated return on investment and the sense of urgency to automate existing tasks.

RE companies should consider two more factors, which look beyond financial considerations. First, it is an imperative for companies to evaluate and implement data access, protection and privacy measures, based on the amount of tenants’ and employees’ personally identifiable information, or PII, processed using these technologies.

Second, RE owners should acknowledge that the application of R&CA technology will enable use of information and analysis across different functions, requiring more collaboration among a variety of stakeholders.

Like any new technology, R&CA comes with the potential to improve the execution and quality of routine tasks radically by making them faster, cheaper and more accurate. To realize the full benefit of the technology, RE companies also will have to break existing silos among people and processes. They may also have to revisit their talent strategy, as use of R&CA technologies may require them to train employees to do higher-order work that requires more critical thinking and discernment. Eventually, RE companies using R&CA can achieve the two-fold benefit of being able to deploy their people to more meaningful tasks and enhancing their overall productivity.

-Produced by , vice chairman and partner, Deloitte & Touche LLP, and Deloitte’s U.S. Real Estate & Construction leader; and Surabhi Kejriwal, research leader, Real Estate & Construction, Deloitte Center for Financial Services, Deloitte LP.


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