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Real estate project managers are on the front of new development. The job requires seamlessly coordinating various moving parts, and the goal is always flawless execution: delivering on time and on budget with as few missteps as possible.
All too often, that goal seems out of reach.
Project managers are facing an onslaught of problems, including rising construction and materials costs, labor shortages, supply chain delays, and an impending recession. The choppy market has only compounded the standard complexities of a large-scale, multi-faceted development project, like scheduling, budgeting, and stakeholder management, all of which are still omnipresent.
Now, technological advances are giving project managers a new tool belt to eliminate errors, plan projects more effectively, and create efficiencies throughout the development lifecycle.
These are the ways that technology is modernizing the job of project managers and driving projects that meet deadlines and budgets.
Automate Administrative Tasks
Laborious and time-consuming tasks are the top challenge for real estate project managers. In a survey conducted by NewtonX in partnership with Northspyre, 67% of project managers said that the time spent on administrative tasks was their biggest challenge, and time spent compiling reports was among the top five difficulties.
Automated technologies are solving this headache. Automation can eliminate up to 70% of administrative duties and save tens of thousands of hours on low-value and repetitive tasks, and the technology is only improving. By 2030, 80% of project management tasks will be completely automated, according to a report from Gartner, allowing project managers to focus on project performance and outcome.
Automation isn’t new, but research from McKinsey noted that it is finally available at a low cost, making it possible to automate widespread tasks to reduce administrative work while also lowering costs. “For the first time, we’re seeing that these technologies are both increasing productivity, lowering cost, but they’re also increasing flexibility,” Katy George, a senior partner at McKinsey, said in an interview with The New York Times. “We’re starting to see real momentum building, which is great news for the world, frankly.”
The technology to do much of this is already available today. Programs like Northspyre are leveraging automation to handle project scheduling, data entry, invoicing, and report generation. These programs can also pull historical data from past projects to provide more accurate reporting and planning than manual processes.
The average commercial real estate development project takes two-to-three years to complete. Even the best-laid plans at the start of development must be adapted as market conditions change. All too often, project managers can only react to issues and challenges after they impact the project. Tyson Browning, professor of operations management at Texas Christian University, said that project managers are firefighters, in most cases, rushing to respond to mini-crises. This cycle has a material impact on the bottom line, with most developers losing 12% of the total development investment to management or execution problems.
In the NewtonX survey, project managers said maintaining the budget and schedule of a project and reliance on outdated or irrelevant data were the second and third biggest challenges during construction. Real-time data and predictive analytics are alleviating those challenges by delivering pertinent information when project managers need it most. The technology creates an opportunity to anticipate and adapt to changing market dynamics before they cause issues at the property level.
At Northspyre, real-time data can deliver insights about materials pricing, supply chain movement, macroeconomic trends, vendor performance, and other variable project trends. With this information, project managers can better plan and adapt to changing market conditions to improve outcomes and reduce errors that lead to project delays and budget overages.
Collaboration and Communication
Real estate development involves a lot of engagement. From investors, architects, designers, contractors, brokers, and vendors, dozens of different hands touch any given construction project. The most successful projects foster a collaborative environment across stakeholders. However, more than one-third of project managers need help keeping stakeholders updated on the project, and another 16% say they experience challenges managing discrepancies across teams.
Technology is helping to connect stakeholders and seamlessly share information to get everyone on the same page and give everyone access to the same information. Projects run smoother when all project stakeholders are connected and contributing to the conversation.
This begins by creating a centralized database for project information that each stakeholder can access and update as needed. A shared database places the most recent and relevant information at every stakeholder’s fingertips, reducing misinformation or lost documents. Communications technologies augment shared databases by connecting stakeholders and centralizing conversation. Chat programs eliminate long, messy email chains and store conversations better than text messages.
While still new in its construction applications, virtual reality has the potential to improve productivity and simplify processes. Project managers must physically visit construction sites to get updates, track progress and meet with vendors and contractors, but virtual reality tools will allow project managers to get a three-dimensional, real-world perspective of a project without leaving the office. Virtual reality, also known as augmented reality, has been growing in popularity since 2019, and it became prevalent during the pandemic when in-person visits were limited. It’s beneficial to any project manager, but especially those working on multiple projects or relaying information to remote developers or investors. With virtual reality, site visits can happen anytime and anywhere.
Today, project managers are using both virtual and mixed reality, a hybrid format where virtual reality is used on the physical construction site to project the future property in real space. In both formats, project managers can see the entire project or specific schematics like floorplans, individual units, and property details, and they can essentially “walk” a building before ever breaking ground. Both greatly benefit tracking progress, understanding updates, and collaborating with stakeholders about the end goal.
Post-pandemic, project managers have navigated through pricing volatility, labor shortages, and supply chain disruption—but technology is ensuring project management teams are informed, agile, and prepared for any scenario. Gain valuable insight into the common hurdles faced by project managers and how to overcome them in our original research report: The Biggest Challenges & Opportunities Facing Real Estate Development Project Managers in 2023.
Tag(s): Real Estate Technology
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