Digitisation – making modern future-proof

Only holistic approaches make the potential of digital transformation clear – and, above all, usable

The construction and real estate industry makes an enormous contribution to industrial value creation. The pressure to innovate is enormous – for economic and ecological reasons. When it comes to digitisation, however, the limits of the industry are also evident: many properties are not fulfilling their potential.

The potential that digitisation offers a property is only revealed in the context of a holistic view throughout the life cycle. It lies in the value creation processes regarding construction and operation of the real estate, as well as in the technical and functional equipping of the property. But is the construction and real estate industry really capable of a systemic approach to digitisation? We have highlighted a few points to shed light on that question.

Real estate construction is now increasingly carried out in line with the BIM (building information modelling) approach. Determined by standards, driven by the state and increasingly demanded by building owners, ‘model-based’ planning and construction has now established itself as an industry trend. But it has by no means cut through far enough. The majority of the value creation in construction (€156 billion in 2020 according to the German Construction Industry Association) is still carried out in the traditional way. Why is that? Three reasons stand out:

  • The building owners only demand BIM planning and construction in exceptional cases. The advantages of a modern, digitised project workflow are currently only apparent for larger construction projects and/or for building owners with continuous investment and a regular project pipeline.
  • The value chain is interrupted several times over the life cycle of the property. As a result, there are only limited benefits from digitisation, offering ‘partial optimisation’, for the industry stakeholders at each life cycle phase. In the design phase, the planning team develops the property model according to BIM conventions, which are relevant for the performance targets in planning. But are they also relevant later for the operation of the property by the owner?
  • The value creation in planning and construction is largely (more than 80%) provided by companies that each have fewer than ten employees. The digitisation of construction is a Herculean task for small engineering and architectural firms – and thus the majority of industry stakeholders.

The digitisation of real estate is usually attributed in the industry to building automation – a trade that is often given a minor role in the planning phase and construction process. The relevance of the best possible building digitisation for convenience, functionality of technical systems, operational and supply security and in sustainability terms is underestimated, and the potential is not exploited.

The course for later building digitisation is set in the planning phase and is the task of the technical building services (TBS) planner. This requires:

  • Digitisation expertise for the conception and planning implementation of the digitisation solution for the property
  • Cross-sector expertise across all technical specialist trades to ensure optimal system management and integration of all technical facilities and systems

These two prerequisites are rarely met: very few of the approx. 8,500 planning offices in Germany can develop ‘smart’ solutions!

‘Cross-sector’ design expertise is the key factor in a smart solution!

And doesn’t ‘digitisation of the property’ need to be taken further? Without doubt, well-designed building automation, including a management level suitable for operational control, is the core element and a must. However, a smart property should have more far-reaching capabilities:

  • It is essential that modern real estate is equipped with a digital management system for all relevant operating and service processes. The simple reason for this is explained by a rule of thumb common in the industry: after ten years, the cumulative service costs are equal to the amount invested.
  • It is essential that modern real estate is equipped with a digital energy management system for all relevant energy processes. This is because, with a share of 40%, the real estate sector makes a significant contribution to the German energy footprint and thus also the climate footprint.
  • After construction and throughout its period of use, modern real estate should be available as a digital twin in line with the BIM standard. This is the only way to optimally plan and implement changes in use, conversions, renovations and safety-relevant measures.
  • Modern real estate should offer its users state-of-the-art functions from the digital world – otherwise it loses its attractiveness. This results in considerable demands from ‘smart’ users in terms of the adaptability and innovative capacity of the property. Orientation on the IT industry and its speed of innovation is an inevitable necessity.

But any opportunity for digitisation must, of course, be economically proportional to the required outlay. That requires valuation methods and feasibility studies throughout the property life cycle that are currently unusual in the real estate industry. The assessment of expenses and effects (in economic, ecological and qualitative terms) can be determined, for example, with a TCO (total cost of ownership) approach. This is another requirement for the construction and real estate industry if modern and sustainable real estate is to be constructed for the building owner.

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