The Indian real estate market has time and again proven its resilience as it withstands the fluctuations around supply chain challenges, increase in interest rates and the ever-changing macro-economic dynamics. To deal with the dynamism of the sector, companies in the sector are moving from a conventional to modern way of operating standards, paving way for smart & efficient organizational structures.
As per latest statistics, there has been a major change in the demographic of home buyers in India, where the average age has reduced to 30 years. The real estate sector has also been the focus of multiple deals, with investments across the spectrum. There is also a heightened focus on implementing new age technologies, such as artificial intelligence (AI), robotic process automation (RPA), virtual reality (VR), etc. The newly digitally transformed real estate industry is now utilizing to provide facilities around online site view, forecasting of buying periods of the properties and digital design of under construction properties, resulting in saving time and energy and making property search a smooth process. On the other hand, this digital advancement is helping the developers to manage operational challenges like creating customer profile across different parameters and create customized solutions.
This new age change in the industry shows the importance of technologically skilled workforce and perform data driven analysis and forecasting. This paradigm shift created a need of real estate organisations to recruit and train high skilled workforce as well as provide opportunities to grow across departments to gain competitive advantage in the industry.
Hence, to exist in an environment of constant digital and data disruptions, organizations are trying to revise their customer strategy. Some of these changes in the organization structures are leading to an agile workforce:
1. Flatter and leaner hierarchies: More and more real estate companies are moving to a leaner, decentralised structure where the decision-making power is delegated to functional / business units. This helps in ensuring a stronger governance on project snags, as well as quicker resolutions in case of escalations.
2. Project-based teams: We have seen considerable success in real estate teams adopting a project team-based structure, resulting in a matrix organisation. These teams are self-sufficient and agile, which allow for management to work efficiently by assembling the most suitable team under a project manager. For instance, few growing real estate players are witnessing issues associated with timely project delivery, individual/group responsibilities and accountabilities resulting in significant attrition. The experts at GT planned to run an organization study to address issues through one-to-one meetings with top management as well as star performers and project site workers. This analysis resulted in radical shift with new org structure with clear demarcations of roles and accountabilities. A comprehensive performance linked incentive system was designed to drive teamwork across the organisation, while balancing the requirements of rewarding individual performance.
3. Central Strategy Management Office (SMO): An increasing number of organisations are finding it useful to set up a central strategy management office which acts as an information and governance funnel between executive team and business heads. This allows for the CEO and executive team to free their bandwidth from operational tasks, without losing stronghold on governance. For example – GT supported a very large real estate firm in their global transformation project by designing a new operating structure that would bring agility in decision making and to empower the teams to be able to take key decisions. This was further supported by using the balanced scorecard methodology, developed organization, function and individual level performance scorecards. A clear set of KRAs, KPIs and role descriptions for the role holders within management and business unit leaders was created and an authority level matrix for each of the key processes was created. ALM would describe the process workflow for SAP and personnel accountable for each step.
4. Dedicated customer experience office: Real estate companies are taking on a serious role in ensuring a smooth and efficient customer experience, from enquiry to post-allocation. Management is investing in the training for sales and marketing to provide a world class experience to the customer and strengthen their competitive advantage.
5. IT as a core function: As smart homes tend to make their way into India, organisations have seen a paradigm shift with regards to their IT department. In the digital era, the IT department has now become a core function to promote cross functional expertise and new age digital initiatives.
6. ESG and sustainability as a focus: The environmental standards that real estate companies are expected to adhere to have seen a drastic change. Globally, many real estate organizations have introduced roles like the chief sustainability officer. This trend is now getting attention of the players in India as well, there has however been a large focus in investments to bring the right talent on board, who can drive this initiative within the spaces created.
With the needs of the sector changing, businesses have had to redesign and adapt to the new working standards to better meet the strategic priorities. It is by adopting these new technological advancements, innovation and operational efficiencies that realty sector can truly have an impact on the human workforce landscape and cater to customer demands most efficiently.
(By Sumeet Abrol, Partner, Grant Thornton Bharat)