Can Integrated Project Execution Management Approach be a blessing?

In the Real Estate industry, project delays is a common and perhaps an accepted norm. Well.. a recent study has relieved that there six issues in project management -

1. Inaccurate assessment of project risk
2. Lack of capability to manage project complexity
3. Inability to correctly estimate and monitor
4. Ineffective utilization of best practices and benchmarks
5. Difficulty to involve multiple and diverse stakeholders
6. Inability to synchronize project plan and execution 

Some real estate companies attempt to get around these issues by using a project scheduling tool - be it tools such as Microsoft Project or Primavera, but still have failed, simply because... in a typical project and I would like to stick to the Indian context - the project execution team is on-site and in most cases the project management team (architects, designers etc.) sits out of a head office or branch office distant from the project execution team and both managed by the Top Management team located perhaps at a third location. So... no synchronization, no looking at the same picture... many a times it ends up more as a case of each blind person looking the elephant and assuming and interpreting what the elephant looks like in their own personal way. Result - project delays, resources utilization issues, cost overruns and depleting profit margins - all the stuff that no CEO or CFO likes. 

In fact... it all starts in the very initial phases of a project itself, wherein there is always an hurry to "announce" the project with very little time for detailed planning, time for putting in the necessary supporting infrastructure, identifying and assessing the project related risks and the time taken to augment and do good them - for example, time taken for land acquisition or right of way or alignment or even environment or forest clearance if required. The estimates built in the initial project plan for clearance from various agencies can go wrong leading to delays. At times, there are issues around the scope definition itself.

What is perhaps required is - an integrated project execution managementwherein the project scheduling tool has integrated BIM (Building Information Management) capabilities and is able to create project schedules that are precise and accurate and which allows one to breakdown the plan into tasks and link these tasks together with the ability to be able to test different scenarios and their impact on the end delivery date of the project. What is required is the ability to assess -

• What is the likelihood of completing the project on time and within budget?
• Which tasks are most likely to cause the project to be delayed?

Also, it is common practice in a construction project of having an “internal” or “target” schedule which is less than the “contract” schedule. If not handled properly, this can cause cash flow pressures. Most importantly, the Top Management would like to see the costs built in into the project scheduling tool and also to be able to run multiple scenarios to understand the impacts of these scenarios on the overall costs of the projects thus been able to reflect upon the projects costs.

Another issue is - to be able keep track of the project progress and to be able to built in the progress / delays into the project plan so that an impact analysis is possible and corrective actions can be initiated too. From a Top Management perspective, one needs a project scheduling tool that allows they to see project progress online across multiple devices. This will also enable a much closer working relationships between the Project Management and Project Execution teams. 

It is very important to understand that the project plan is as good as the "weakest" link in the entire plan. Effective project execution management is all about identifying the "weakest" link in the project plan and address it. Once the "weakest" link is addressed, then one needs to look at the "next weakest" link and go on and so forth. The project scheduling tool needs to be able to capture this information for historic and learning purposes so that future projects plan are made more effective and efficient. 

The project scheduling tool also needs to have the able to connect and take data from and share data to various other systems deployed in an infrastructure company to enhance the value to the business.

Today, there are scheduling tools that facilitate this integrated project execution approach to project management within the scheduling tool itselfand it is time Indian infrastructure companies consider adopting this approach to plan project much more effectively, reduce delays in project delivery and gain repute with the customers for "on-time delivery".

The crux of success for any real estate company is - effective and efficient, timely, on budget, on time project execution.

"Kill 3 Birds in 1 Stone" or "Ghar Wapsi" or both - Maha style

Recently on 16th June 2015, the State Government of Maharashtra unveiled what it called an "Investor-friendly IT and ITeS Policy". The policy aims to attract an investment worth ₹50,000 crore and generate employment for 10 lakh people in state.

The policy, called the "new IT and Enabled Services Policy" offers sops including - an additional FSI upto 200% by charging a premium, subsidy on electricity tariffs, property tax at residential rates, concession on Works Contract Tax for IT and ITeS companies and also reimbursement of property tax for companies which set up their units in rural areas. 

So, if one looks at these sops, one wonders is it an attempt by the Maharashtra State Government to try to "kill three birds in one stone"?

Well... the way I look at it, - bird one - IT and ITeS companies, get them to set up shop in Maharashtra; Maharashtra has been losing out on these companies setting up large infrastructure and service centres to others states - Tamil Nadu, Andhra Pradesh and Karnataka; bird two - generate employment for 10 lakhs people in the state (employment generation is always a priority for any government). The bird three seems to be just little hidden away but is significant - a boast to the Infrastructure and Real Estate industry in the state. 

Or....

is the new policy is also aimed at facilitating a "Ghar Wapsi" of sorts for the large number of people from Maharashtra currently associated with the information technology (IT) sector who have moved to other states for jobs. Will it bring them back to set up and work for IT and ITeS related businesses in their home state?

or it is both... if so... then "it is four birds in one stone".... 

Whatever be the case -  all these sops under the new policy will definitely see an increase in activities around commercial real estate and setting up of IT parks which will also follow with an increase need for residential housing as these companies will need the physical infrastructure for their employees to work and also for them to reside. So... I see good times for the Real Estate Industry in Maharashtra, in the commercial and residential space, especially in Navi Mumbai, Pune and Thane.

Can "Government Citizen Participation" model work for the Government's Smart City projects?

June 25 2015 - would be a historic day and important day for the urban development sector. It is on this day the Prime Minister of India will formally launch the 48,000 crore Smart City project and unveil the roadmap, which is an attempt to transform the urban infrastructure in India.

Recently, the plan for 100 Smart Cities have been cleared by the Government Of India; out of which 20 cities are likely to be shortlisted for the Smart City project in the first phase, 40 will be selected in the next stage to be followed by 40 more later.

As per governmental official sources, the project will be implemented through an area based approach comprising retrofitting and redevelopment. Each Smart City aspirant will be selected through a ‘City Challenge Competition’ which intends to link financing with the ability of the cities to perform to achieve the objectives. Each state will shortlist a certain number of smart city aspirants as per the norms to be indicated and they will prepare smart city proposals for further evaluation for extending central support (http://computer.financialexpress.com/news/pm-modi-to-unveil-rs-98000-crore-smart-city-amrut-projects-on-june-25/12312/).

The biggest challenge is going to be for the state governments and urban local bodies as to how to effective and efficiently spend the huge proposed investments to be announced by the Centre Government. The key would be to put in place a monitoring mechanism to ensure that the money spend is rightly and appropriately spend and there are no project overruns which are a common and typical problem faced by Government initiated projects in India. 

Secondly, if the Smart City project needs to be successful then there needs to an atmosphere to bring in transparency in the functioning of the Government and the urban local bodies and here e-governance initiatives and solutions will help in bringing the same.  

Maybe the Government could consider a "Government Citizen participation (GCP)" model rather than the now famous "Public Private Partnership (PPP)" business model for the Smart City project. I believe that the Government should consider and evaluate ways and means to get the Citizen involved. It is important to do so as all that will be done under the Smart City project would be impacting the common citizen and his/ her involvement in how they would like to have their city managed is very critical; decisions on governance of the Smart City and the solutions to be deployed perhaps should not be left to only a "elite" and "smart" few.

For example, the Government could consider announcing the initiatives / changes to be made under the Smart City project and making them known to the common citizen with clear and defined timelines and milestones through public sources and public notices or even on a governmental portal that can be accessed by any common citizen even through yr mobile. The "citizen portal" can accept  the point of views on the progress of the initiative awarded to a shortlisted smart city aspirant; should then calculate a "satisfaction" index for the awarded project and then the payments to the shortlisted smart city aspirant could be linked to that "satisfaction" index for the initiative awarded and undertaken them. This will do two things - ensuring active involvement of the common citizens and would act a "check and balance" mechanism for monitoring the project execution status, hence minimizing project cost overruns and actual progress on ground within a stipulated time frame.

I believe the "Government Citizen Participation (GCP)" model definitely needs much more work and thought process if the citizen truly needs to get involved, but then we can now take baby steps to a "citizen-centric" planning approach for ensuring a sustainable urban development in the long-run.

Green Building Material - Bricks from excavated soil...

The Economic Times of India, Mumbai Edition (dated 3rd June 2015) has published an news article that states "Green Building in City may Get up to 20% Discount on Property Tax". It seems that the Municipal Corporation of Greater Mumbai (MCGM) is in discussions with Indian Green Building Council (IGBC) on the proposal. Well... that is a great news as the proposal is aimed at a discount on property tax paid by developers and residents and aims at popularizing and boosting the demand eco-friendly and energy-conserving structures.

If the proposal is accepted and it goes through that I believe this will help "green" become more mainstream and popular in the Real Estate market. Also, in the present stagnant Real Estate market where the supply seems to be more than the demand for housing, a "green" building project is perhaps easy to sell and more importantly today's environmentally conscious buyers are willing to pay a little higher price to buy into a "green" building project. A favorable decision on the proposal by the MCGM will also trigger a large market and demand for "green" materials and thus perhaps may bring down the overall cost of construction of "green" and sustainable buildings. Also, the said proposal could be in line with the Government of India's "green" policy because "green" buildings will lead to "green" cities which would be self sustainable.  

Now, if the primary objective of a "green" building is to reduce the impact of building on the environment and human health, then why can the excavated soil that is removed whilst laying the foundation of the building be used to make bricks. These bricks can be used directly in the project itself, making it a true "green" project as one will save on removal of the excavated soil and transportation and dumping of the same to an alternative location; mind you, there is a cost associated with all that removal of the excavated soil and its transportation and every cost does count. Using hydraulic presses, the excavated soil mixed with about 10% of cement as a binding factor can be compressed into bricks which directly used to make walls. The existing moisture content in the soil itself is good enough to form the brick structure. Walls made from such hyper compressed bricks will need minimal plastering as they would be on a very smooth surface and also be uniform is shape and size. So, the fact that these hyper compressed bricks are compressed at high pressure, their crushing strength would also be far superior to the normal kiln-burned clay bricks. Also, the fact that these hyper compressed bricks would not need any "curing" as in case of cement blocks, the speed of construction and overall project timelines can much faster.

In fact, the MCGM themselves can also consider setting up a hyper compressed brick making plant and supply the hyper compressed bricks to the Real Estate developers, thus also compensating for the loss of revenue on property tax as a result of the above proposal. As for the raw material, I am sure there is enough construction rabble available which is freely in large volumes the MCGM perhaps does not know what to do about other than using it for land filling.

Smart Construction - 3D Printing and Brickless Internal Wall System

Can we apply 3D printing to Real Estate? It sounds crazy... does it not? But just think about it, why not? But then it is also true... very little has changed in the construction industry in the last 100 years now.

Just imagine the potential that such a technology would have and the cost advantage the technology will extend to a Real Estate Company - quicker construction, lower labour costs, less wastage and a much safer and accident-free environment. Imagine the possibility to be able to print a complete well planned building or project or even a town right from the architectural drawings. 

Well.. it is in fact now a reality... and a Chinese company WinSun Decoration Design Engineering Company has announced that they have built the highest 3D printed building, a 5-storey residential house and the world's first 3D printed villa. In fact, the company announced that they were able to built 10 houses in 24 hours.

In this 3D technology also known as "contour crafting", a nooze sprays concrete along a contour path to shape the walls of a structure. Buildings are essentially assembled in layers automatically along a grid: One section of the machine moves vertically, while another moves horizontally.

Personally, I see a great potential for this technology in all "value housing" projects and initiatives launched by many a Real Estate Companies and more importantly in the the Government of India's initiative of "100 Smart Cities". Well... it can be argued that creating a smart city isn’t just about creating the physical infrastructure — roads, clean water, power, transport and so on but then it would perhaps be a good beginning if we are able to convert an urban town plan as defined on paper considering all aspects as it is originally envisaged using the this technology India would still come a long way in its efforts on developing "planned infrastructure" in the country and would be a new beginning in the Indian construction industry.

Brick walls and concreting of the brick walls add to the cost of construction and in a "value housing" project the Real Estate Company's biggest challenge is to keep the overall costs down. This is where - brickless walls can come in and be used for internally partition walls and are a good alternative to the traditionally used gypsum or plyboard for partition walls and can be a great cost saver in terms of the material costs compared to the conventional internal walling systems. These products are pre-fabricated and pre-engineered with strong quality checks and are waterproof, termite proof and possess high strength and are fire resistant too.

The most important point is that since the thickness of internal walls made using these products is reduced as compared to a conventional wall, the Real Estate Company can get more saleable / usable area and also the project cost times can be considerably reduced as compared to the conventional brick wall system.

If the Government of India really intends to achieve their vision of "housing for all" by 2022, then speed of construction and cost of construction are two critical and important factors and it is time for Real Estate / ECO Companies to look and do things differently to meet the demand and expectations. Definitely, there exists a potential business opportunity for an Indian engineering company or a Real Estate company to work with Chinese companies like WinSun Decoration Design Engineering Company to manufacture 3D printers for the Indian construction industry under the "Made in India" initiative of the Government of India and new "Indo-China Strategic Collaboration" initiative.

Will real estate marketing be all about "just" facilitating a sale?

We are seeing changing trends and experimentation in the Real Estate industry, with Real Estate companies, for example, tying up with the new big boys of the industry - the ecommerce companies to promote and sell their projects online or Real Estate companies developing and deploying "smart apps" that can be downloaded by the potential and existing customers on their smartphones.

By the customer response to such initiatives, it is very clear that customer expectations are changing... the customer wants everything made available "on the fly", instantaneous, immediate and as and when they want it and in a format that they are comfortable in and most importantly... at their own time... they do not have the patience to have a face-to-face meeting and listen to long presentations and walk-through at least in their initial stages of a home search. 

Now, this perhaps in my view, makes the job of the marketing team of Real Estate Companies a little more difficult than before... it is not longer limited to as simple as - creating a webpage, putting up social media links on that webpage, email marketing of projects or putting up commonly used marketing contents such as - features, location details, master plans and electronic brochure and /or a walk-through on the company or project webpage... and then hoping the projects will eventually be sold when the customers see all of the above and go for a on-site visit, the on-site sales team is able to sell the project to the potential buyer and the convinced potential buyer possibility buys into the project all based on the reputation and market standing of the Real Estate Company.

Today, the potential buyer is expecting an "overall and complete satisfying experience"... The potential buyer wants to see pictures of the project, see LIVE  images of the construction status and project progress. It is no longer about "a sale and forget" but also about "after sale" service experience and also about the "post moving in to the home" and also perhaps the "day to day tenant" experience too.

Based on the above and the future trends, the Real Estate companies may be compelled to take a longer term view of their customers and partner with their customers over the entire life cycle of their projects. Real Estate companies may have to built innovative IT solutions themselves or with partnership with others to enhance the buyer expectations and use technology to realize efficiencies and improve access to the services even in a post sale scenario.

For example, the customers of the future may want to look at available properties in the comfort of their homes - online (which they can do today too) but through a virtual reality (VRC) headgear, maybe they may want a virtual reality (VR) walk-through or perhaps choose a virtual agent to take them through the project details and its features; further they may want to visualize how their existing furniture and other stuff will look into the new space, may want to add their bit of customizations to the new space. All of this even before they decide to buy the home.

In the post decision "to buy" stage, if the customer is seeking a home loan, the customer may want the real estate company to line a virtual interview. Alternatively, there could be a linking of the customer's income tax account and PAN details with the Banking Loan Approval department to give instantaneous loan approvals and sanctions; a payment gateways for online payments on through their website; the customer may want monitoring and usage of utilities in their home realtime; a portal that can connect them to other service providers to provide and facilitate all service utilities for the tenant.

Well, I believe... the customer of future may want a "complete package" and Real Estate Companies may have to take a note of it soon... The list and the possibilities are numerous and with technological advancements there is great potential to be the real and true differentiator and to have a few USPs up one's sleeve...