Transforming the Urban Landscape

Saturday, April 05, 2008

The Real Estate industry has witnessed explosive growth over the past few years. From churning out signal free expressways out of patchy highways to building 'green' offices and intelligent homes that are high on the use of technology, to postulating yet another kind of outsourcing-facility management; this industry has seen it all. Being a late adopter of IT, they've done a commendable catching up

We're all intimidated and awestruck at the same time by the sheer size and variety of commercial complexes and residential condominiums being built nowadays. The magnanimity and quantity of real estate projects is a pointer to the rising economic wealth of a nation. So, it doesn't come as a surprise that, synonymous with the economic boom of this decade, we see a sudden spurt in construction activity across the country. A lot of innovative commercial office complexes, multi-leaved expressways, high-rise condominiums, ports, multi-level automated parking lots and airports are seeing the light of the day.

Both technologies and human capital play a big role in ensuring that we see a lot of innovation. Right from the stage a concept is mooted, to the actual simulation of the model, to carrying out the construction of individual components, to maintenance, repairs and interior décor; technologies play a vital role. In fact, were it not for the availability of all algorithms and 3D modeling software, a single bridge would take up to eight years to complete!

However, even with so much money being pumped into this sector, and looking at how IT drives it, you'll be surprised that even 0.5-0.8% of the total investment for IT equipment and implementation, is considered good enough. The meagre investment in IT is partially understandable as bulk of the capital goes into raw material procurement, labor costs and operations management that require co-ordination amongst people spread across remote locations, uninhabited and difficult terrains, and areas with minimal communications infrastructure. Moreover, bulk of the time and resources are spent on projects that span over quite a few years. Similarly, as these projects involve a massive amount of raw material, spiraling costs of the projects are what the management is constantly looking to control. However, with increasing investments and a more demanding customer, things are set to change for the better. ASSOCHAM projects that the real estate industry will grow at a whopping 30% in the next 10 years, attracting an FDI of over USD 30 billion. Riding on such massive investments, the domestic real estate sector that currently stands at 14 billion dollars is expected to spiral to 102 billion dollars during the same period.

IT@Hiranandani Group

What role has IT played at Hiranandanis? As far as Hiranandani is concerned it has been a two-way traffic. We have provided good IT backup infrastructure place in various locations, especially in Powai and Thane wherein we have provided a lot of space in terms of highest level of quality of infrastructure for the IT industry. Secondly, we have provided a lot of backup connectivity with the sites in terms of large bandwidth and communications. On the other side IT's role at Hiranandani's has been to greatly improve the intercommunication amongst various departments and making project management easier. Niranjan Hiranandani Managing Director Real estate is dominated by middlemen. How can IT be used to create transparency between the customer and the developer? Customers can directly communicate to us through the our website. Also in the real estate business, once a transaction has taken place, customers interact with the developer directly on post-sale issues. How can IT be used to alleviate problems faced in the real estate business? Increasingly, as we put projects across the country and the world, we have to see that there is instantaneous information flow amongst project sites, architects, designers, various departments of the company and the developer. Also, redressal of customer grievances, reducing paperwork and decreasing the time for clinching a deal are priorities.

IT/ITES industry has been in the forefront of consuming space in metros and many of the second-tier cities. And with the disposable incomes of the suave, urban executives increasing, aided in no insignificant terms by the availability of affordable home loans, the demand for world-class luxury apartments has seen an upward spiral. No longer are customers content only with the basic amenities such as power backup, 24 hr water supply, round-the-clock security and the availability of household services; they want value for money.

Move Over Highways, it's the Age of Expressways

The state-of-the-art Delhi-Gurgaon Expressway has nine flyovers, four underpasses and 2 foot-over bridges on a 27.7 kilometer stretch. DS Constructions commenced work in January 2003 and the project envisaged conversion of the Delhi-Gurgaon Section of NH-8 into an access controlled 6/8-lane highway with service lanes across certain sections. Of course a lot of 3-D modeling software have been used for designing the beams and the columns and other structures in this colossal project, but the technologically intensive 32 lane toll plaza at the Delhi-Gurgaon border is the one to make headlines. The 32-lane toll plaza on the Delhi-Gurgaon border is the second biggest in Asia and among the 5 largest in the world IT knowledge and the will to implement advanced solutions in the Construction industry is amongst the lowest for any industry. In fact going by the current figures, most companies spend only around 0.5-1% of the total capital on IT. This makes the job of an IT head even more thankless. The biggest challenge vice president-IT, CR Narayanan faced on joining was the lack of coherence amongst legacy systems. This was aggravated by the lack of enthusiasm amongst employees in adopting new technologies. As he rightly quips, 'Not long time back the only thing in IT people knew was Tally, the accounts package.' The stakes were right there in front of him. One option was to integrate all the existing systems and bring them to a level so that they would be usable across the organization or go for a standard application. The company decided to implement SAP, as experience suggested this to be the most successful ERP package in similar industries. The entire implementation was over within a period of five months. As of now, they've implemented the core modules that can be easily integrated in future with SCM or CRM apps as when the business scales up. C R Narayanan Vice President - IT, D S Constructions Although the company has a rich experience in infrastructure development across India-expressways, ports, parking lots, SEZs, etc; they find tolling to be a different baby altogether. As Narayanan points out, 'The Delhi-Gurgaon expressway is very busy with more than five hundred thousand vehicles using this expressway and over one hundred and twenty thousand vehicles paying toll. Not that the company wasn't smart enough to introduce the right technologies from the start, such as RFID based 'Smart tags.' These small devices are meant to be stuck on to a vehicle's windscreen and are instantly recognized from a distance of 20 mtrs from the toll gate. At about 10 mtrs, the handshake takes place, ie the system checks for available balance, verifies the authenticity of the vehicle using the tag and so on. In case of fraud, the tag is invalidated and the next time the vehicle tries to cross the plaza the boom bar at the toll gate won't let the vehicle to pass through. Kapsch, the worldwide leader in tolling systems, has provided the entire tolling infrastructure. The system has been so designed as to record three shots of each vehicle passing through the toll plazas. High-res cameras have been placed at vantage points at each toll gate to record images of the driver, vehicle's number plate and a whole body shot of the vehicle. The efficacy of the system can be gauged from the fact that even though a vehicle might be traveling at 80 kmph, the image rendering software can take pretty accurate images. When asked about future projects by the company, Narayanan talked about the ongoing automated car parking at KG Marg, Delhi as the next unique development. The parking lot would have the capacity to handle 1600 cars with only two operators, and even those could be dispensed with. It's estimated to take around 24 months to complete.

So, we see innovations in the form of automated power management with emphasis on 'green' principles; automation in interior décor; remote management of the essential aspects of building operations such as power control, air-conditioning, servicing of equipment, security and so on. In addition to commercial buildings and residential apartments, the same trend can be seen in the construction of expressways. No longer are these condemned to be stretches of unpredictable potholes or inadequate lighting or for that matter bumpy rides. Round-the-clock illumination, innumerable signboards, state-of-the-art technology in building roads and flyovers, and the latest in tolling systems, all this promises to leap frog India to superpower status in 2020.

Remote facility management
We've seen outsourcing of manufacturing processes, software development, BPOs and call centers. This has now been further extended to outsourcing of legal processes, financial transaction processing and publishing and media. So what's the next step? Outsourcing the management of high-end services related to commercial and residential complexes. A lot of companies have entered this segment and in the latter part of this article we've presented a case study on one of those-Ngenox. They're managing the power management, air conditioning, equipment repair and maintenance, and the routine facility services such as accounts and administration, through custom-built software from their facility in Gurgaon. Such kind of remote management has its own set of benefits. For one, the management of the commercial or residential complex offloads a part of its responsibility to an outside vendor, who may have an expertise in facility management.
This way companies can focus on their core competency rather than spending time attending to periodic control of equipment and attending to user queries. Remote facility management is slowly but surely becoming a rave as managements of large buildings prefer handing over this monotonous yet extremely critical task to specialists. The latter on their part have developed the necessary infrastructure to keep a continuous eye on their client's facility.

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