Monday, November 22, 2010

Speaking Hi Tech!

Everybody gets so much information all day long that they lose their common sense...Gertrude Stei

With due respect to Mr Gertrude he must have skipped the real estate industry while writing this famous quote!

As recently a study was undertaken via a renowned Management Institute in the country for a US software giant corporation. Its about use of software as well hard ware in Real Estate /Construction industry or call it IT ie Information industry in the country. As being one of the largest employment generating industry & turnover even higher than Automobile industry yet the use of computer & related services is not even 2% of its turnover!
Many will be surprised but as  with whatever limited exposure I have in last 20 years in real estate industry, I will say its failure of Computer Industry as well the Real Estate Industry combined! If Computer Industry hasn't been able to understand the exact needs of this business then Real Estate Industry wasn't ever truly open for the newer technology & laid their demands clearly!

Basically software industry is indirectly is a parasite in itself! No offence all software guys but it needs a customer industry to adopt their knowledge which in end is used to improve the parental industry! Here what has happened as the real estate has been never standardized so naturally IT industry has never been able to understand what this industry needs! And as the land prices is the only thing in world which keeps on rising without doing anything they never have been keen on improving the business with assistance of IT industry. Also real estate has got least of technical personals & don't required any licence or that sort of thing so obviously they prefer to stick to orthodox methods of construction !
I remember even in my Eng college days civil guys were more comfortable with T square for drawing than using drafting equipment,which other branches were frequent with!
Frankly the topic is so vast as well covering many aspects that it’s pretty difficult to cover all of them in a single paper. Till now the real estate stands as the largest revenue as well employment generating industry of the country also it has the honor of most unorganized industry too!
Its this Unorganized status of this industry makes it most potential for the IT industry & I think studying this particular aspect gives maximum opportunity to any management student of both the faculties to cover up the lacuna.
Such is the irony that after spending nearly 15 years in the industry I am unable to give concrete figures to any of my statement, simply because no official guaranteed statistics is available on the data I will be mentioning below, for e.g.

We don’t know exactly
1. How many houses we need leave apart city wise even in total country.
2. We don’t know what kind of houses we need.

3. What is affordability for the same in terms of money to fulfill this demand?

Above two basic questions leads key to many answers such as what kind of technology we are looking for to build these houses as well the infrastructural need these housing will require.

I think here is where IT can play a major role along with networking as such type of information will require a huge data collection which has to be backed up with the networking for the collection of same. Right now take example of a simple term in present housing development “Rain water Harvesting“!

Now RWH is being practiced in India since from ancient time, right from Mohanjaro-Harappa establishments & ask any person in the field, he can list hardly a few techniques. This is because of communication lacuna & no networking as well poor data storing facilities every local area developed its own techniques. And this technique got restrained to not even that State but that District only.
Consider Chennai in Tamilnadu, Surat in Gujarath , Sicar in Rajasthan & Pune rural in Maharashtra .All four have different needs & so have different systems of Rain water Harvesting. Now show me a single platform which gives such information and now consider the time wasted in collecting the information before finalizing any system. That was just one aspect of at least 400 activities involved in real estate housing.

Presently IIEC ( International Institute of Energy Conservation, USAID arm) made an Environment Impact Assessment Criteria for Pune real estate development. It has listed 88 main heads & nearly 200 subheads which are to be analyzed.
Now tell me with no single data providing network available of software for the same how one is going to do the job!
 Leave apart Environment data, I am sure there wont be hardly 10% developers who knows exactly how much money they have to pay to the various Govt agencies under different heads as no central data of that kind is available! We pay as the concerned consultants brings the chalans! This is the scenario & we talk about affordable homes! Affordability is knowing first at what cost the home has been manufactured or will be manufactured!
Right from identifying the potential land for real estate to hand over the finished product to the customer we can break the act in following 10 stages:

1. Identifying the demand of housing.
2. Zeroing down the piece of land as per demand
3. Acquiring the land (Including legal transaction)
4. Planning the housing as per the needs.
5. Procuring Material
6. Procuring Labors
7. Maintaining quality in construction process.
8. Providing physical Infrastructure such as road, water, power. Providing social infrastructure such as school, medical, commerce, recreation.
9. Marketing of the houses
10. Handing over and post occupational activities.

Now as in most of the actions except planning that to restricted the drawing part where support like AutoCAD software is there, rest all actions took extraordinary time either due to manual systems involved or no data base available.
 Like RWH a single plastering to masonry is being carried out by at least 7 known ways. Which will be cost saving where? How we are going to answer this?

Here I think we need the fusion of It Industry & Construction Industry. You have mentioned use of graphs & Charts in the paper! It’s unfortunate that we never bothered to keep record of even site accidents in the Industry leave apart Quality checks!

Major reasons is at many places there is no demand for housing or there is excess demand or demand is there but lack of knowledge restrains the demand on affordability reasons. Also there is a myth that application of IT in Real Estate will create un employement in the industry.

I thing firstly we have to acknowledge the lacuna on this front, then work out the reasons & then access the system to overcome it by developing the IT products which will support the existing system as well strengthen it on data base building. This will be the biggest task. And its high time for the Builders as well the Real Estate Industry as a whole to take this job which in end is a key to lower down the construction cost & making homes more affordable for the end users.

Sanjay Deshpande
Sanjeevani Developers,
Gharkool Lawns,100’ DP Road,
Patwardhan Baug, Off Mhatre Bridge,

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