Project management in the real estate industry and especially controlling are currently subject to drastic changes in the course of digitalization. The reasons for these changes are increasingly complex real estate projects, which often have to be managed and controlled by several people in real time. The aim of project controlling is to ensure that project goals are achieved within a planned cost framework. It includes all activities that are necessary to implement a project efficiently and according to plan. However, integrating all these processes is becoming increasingly difficult with conventional methods because project development in the real estate industry is characterized by an increase in complexity.
The first choice of software to control allocations or cash outflows has and often still is Excel. However, the maintenance of sensitive data by several people can prove to be difficult. Excel is clearly not a software designed for collaboration. Getting started with a complex Excel data sheet is anything but easy neither is updating data. The longer the project takes, the greater the potential for error: simple collaboration, secure processes and reliable data do not exist in this form. But this is exactly what makes cost management fast and efficient. The chaos created can result in expensive opportunity costs.
Digitalisation is the key word here: Project controlling of large construction companies is now increasingly digital via integrated EDP systems and to a growing extent cloud-based.
The efficiency of project controlling in the real estate industry is largely determined by the quality of the available data material or the interfaces to third-party systems. Thanks to digitalisation and new controlling tools, data is now easier to access live.
The establishment of efficient, digital organisational processes is the essential element of successful project controlling. Access to current data in real time and by multiple users with appropriate access rights keeps these systems fast and up-to-date. In this way, considerable additional savings potential is realized in operational project management.
At the beginning is the conception
The basis of the controlling concept is the design of a company-wide digital IT platform, which contains all project-relevant data. It enables the integration of the individual controlling modules of a project development.
Project development begins with the acquisition of a property. A project budget is defined.
– The planned costs are fixed by a quantity surveyor. They correspond to the economic targets of the Development Calculation.
– The orders are automatically recorded via interfaces. The creation of efficient processes is of particular importance here. Parallel to this, the actual creation of the object is started.
– Changes to the planned project budget are examined for their economic impact on the overall project planning.
The coordination of these activities and the digital processes with each other is crucial for success.
Pitfalls in everyday project life
In practice, digital platforms that are not yet integrated company-wide and information that is fragmented or outdated hinder a functioning project controlling. Furthermore, the consolidation of data is problematic if they are available in different IT systems.
If digital workflows are not precisely defined, the cost-related basis is not created at an early stage and controlling principles are not sufficiently implemented in the project, this has consequences: The result is a lack of transparency in the individual projects, which makes it difficult to maintain an economic overview and leads to additional coordination and organisational effort in the preparation of meaningful project reports.
Controlling tasks are growing …
Today, more than ever, the task of controlling in project development is to create an instrument with which complex interrelationships of individual processes can be digitally and transparently represented and their effects on the company can be shown. Controlling not only has a system-coupling function by combining, analysing and evaluating digital information, but also takes on a system-building function by establishing an IT process organisation throughout the company, which allows operative tasks to be completed efficiently and promptly, thus creating the basis for the target-oriented control of individual projects and the entire company.
… Controlling possibilities are growing
Today, the availability and evaluability of information is ensured company-wide by software. The existing data can satisfy the information requirements of all report recipients by setting up a hierarchical reporting system. Both the aggregation of the data material and the analysis of condensed figures can be carried out in digital platforms without great effort.
Based on the information available, the incoming invoices can be checked digitally, and confirmed according to the release hierarchy. Payment is initiated via an ERP software. At this point at the latest, the digital comparison of the planned costs with the actual costs incurred is possible via reporting, so that the necessary transparency is also ensured.
Top 3 prop techs offering digital controlling solutions for real estate projects
- PROBIS Expert: PROBIS Expert offers digital cost controlling for real estate, risk management and quantity surveying of construction projects. It offers cloud-based multi-project controlling for banks, investors, project managers, project developers and controllers. Above all, the software enables different perspectives on a project, portfolio or fund and makes it possible to effectively control and evaluate costs in complex real estate projects.
- RIB Software: RIB offers expedient cost transparency for all participants which gives decision-making security to minimize the economic risk in every project phase.
- ORACLE conject: Conject is a Collaboration Platform for the Real Estate and Construction Industry
Author: Moritz Koppe, Managing Director of emproc SYS, digitizes the cost management and financial processes of the real estate industry with the controlling software PROBIS Expert for developers, banks, property owners and investors.”