Real estate assets produce a sea of data every second, from HVAC systems, lighting, lifts, occupancy, and more. These separate software systems and technologies create data siloes and fragmented information, and pose considerable challenges to everyone in the real estate industry.
Asset managers in particular face numerous issues due to poor visibility of building and portfolio performance. Whilst data is being produced all the time, many asset managers lack the tools they require in order to harness their assets’ data, whether it be real-time or historic information. Without a solution, it is challenging to conduct accurate and regular reporting, benchmark and compare assets, and make key decisions to best manage and extend the life of assets. Other challenges include a lack of data for adequately understanding occupants and the inability to interact with them, poor connections between asset management and financial records, and inadequate data ownership.
So how can asset managers overcome the challenges presented by technology and what value can digitisation, particularly digital twin technology, drive in this critical role?
Top challenges facing Asset Managers
The sheer amount of data produced for each built world asset, and the siloed nature in which it exists, often leads to that data being underutilised. This causes several knock-on effects that impact the asset management function, which are further exacerbated when managing multiple buildings across a portfolio.
1. Reporting and decision making
As part of their role, asset managers must perform timely and accurate reporting practices, due to compliance requirements. However, these are often driven from multiple systems, multiple data sources, excel spreadsheets and estimates on key metrics. This can be a largely manual and time-consuming process for asset managers, which becomes even more complex when managing and reporting on different assets. Furthermore, the data used for analysis may have varied methods of calculation and presentation and can often be based on different data languages.
2. Sustainability/ESG reporting
The same challenge has implications for ESG reporting. Vendors who control systems in built assets (including heating, cooling, lighting, maintenance etc.) often provide proprietary software packages, require maintenance to be performed by their team and purposefully exclude external parties from accessing data, to protect contracts. This proves to be a significant challenge for asset managers when conducting reporting on energy consumption and emissions, using data that they should be entitled to access.
Driven by regulations across the globe, sustainability practices themselves are also becoming increasingly important in the real estate industry. For example, in New York City, buildings of particular sizes must cut emissions by 40% by 2030 and 80% by 2050, and in the EU, similar reductions are mandated, with 55% reductions required by 2030. Without a clear view of energy consumption, understanding how to meet these requirements is difficult, despite being a top priority for asset managers to ensure penalties for non-compliance are avoided.
3. Cyber security
In this era of unprecedented digitisation, cyber needs to be a top priority for all businesses. A cyber attack has the potential to yield damage to a business’ reputation and bottom-line, but more critically, can be detrimental to the safety of occupants. When it comes to real estate, both Information Technology (IT) and Operational Technology (OT) need to be protected. When data is held in different systems, it becomes much harder to protect all the endpoints, with the “attackable surface area” inherently being significantly larger. Asset managers need to have assurance that their portfolio is secure, and demonstrate robust risk management processes to executives (and investors) across their entire portfolio.
While the current technological landscape presents its challenges, there are also big opportunities for asset managers, with Deloitte reporting that 83% of asset managers consider using technical tools as an important challenge for the organisations. In a rapidly evolving digital landscape, real estate investment managers are looking for new technologies to increase efficiency and further growth.
A digital twin unlocks the opportunities of digitisation
A digital twin overcomes the challenges of digitisation and brings opportunities that result from unlocking and linking data in one interface. Their potential is well established across various industries, including aerospace, automotive production, supply chain management and manufacturing. Digital twin adoption is now being realised across both the public and private sectors with Gartner projecting that over two-thirds of companies implementing IoT will have deployed a digital twin by 2022.
Digital twins have also been applied to the real estate market and have evolved beyond individual structures and buildings. They allow asset managers to gain new insights with more accurate benchmarks and asset performance comparisons. As digitisation and the application of digital twins expands across portfolios, the potential impacts on the industry are immense.
By implementing a digital twin, such as WillowTwin™, asset managers can overcome the challenges they face by providing an intuitive way to store, organise and access information generated by complex real estate assets. As a result, siloed data and proprietary technology becomes more accessible, useable, and easier to interpret, even as complexity scales.
With WillowTwin™, asset managers get a deeper understanding of how buildings are performing. Disparate data sets, technologies like IoT devices, and all processes running throughout an asset are brought together into a live, unified portfolio view. This doesn’t just drive efficiency – it equips asset managers with the information needed to make accurate and strategic portfolio decisions. Furthermore, Willow future-proofs all assets in a portfolio, providing a secure and safe integration point for new software solutions.
By providing a single source of truth, WillowTwin™ equips asset managers with the data they need to:
1. Measure and compare performance of assets across a portfolio
As WillowTwin™ easily scales and is designed to be implemented across entire portfolios, asset managers can leverage this in many ways. Not only can they gauge the performance of multiple assets, but can also monitor, assess and correlate aspects including operational performance, maintenance requirements, and energy with each other. This improves budgeting, planning, and reporting, ultimately driving efficiency and increasing revenues.
2. Meet compliance and regulatory requirements
The twin provides real-time oversight of multiple assets, simplifying issues such as compliance and regulatory requirements. Also, with a wealth of information at their fingertips, asset managers can hold consultants and suppliers accountable for maintaining critical assets to ensure their sustainability priorities are adhered to and targets met.
3. Understand and triage issues quickly
Additional benefits for asset managers include confidence in data accuracy and accessing live statuses on essential issues. This information can be accessed from anywhere via the cloud, allowing for improved decision-making, insights into risk and compliance items, and minimised disruption and data loss when changing management teams. Furthermore, accurate and real-time data on assets minimises discrepancies across sub-contractors, and reduces costs.
Deploying WillowTwin™ across a portfolio and getting started on the digital twin journey
Getting started on the digital twin journey is simple. Willow begins by connecting three core capabilities across the portfolio – typically HVAC, Energy and Tenant Service Requests – and linking them to spatial context. Once the initial deployment of digital twins across a portfolio has been implemented, operational insights relating to these areas are immediately available across the portfolio through structured and standardised data sets. This enables users to compare performance, connectivity and key KPIs across assets, whilst providing a future-ready foundation to integrate best-in-class smart building technologies relating to Occupancy, Cyber, Energy and Sustainability to drive deeper insights into building and portfolio performance.
With digital twin technology, asset managers can overcome the challenges historically faced in their role as a result of paper trails, out of date reports and siloed proprietary systems. With a digital twin implemented across their assets, asset managers are equipped with the comprehensive, real-time data that is critical to making timely, robust and strategic decisions relating to the buildings and portfolios under their management. As the role continues to evolve and as new technologies are introduced, asset managers can rest assured knowing that their digital twin will not become obsolete with time but rather builds a strong foundation on which to build an ever-growing technology capability. Digital twins are no longer a revolutionary “hype” technology, but are proving their value and yielding great returns on investment in the market today. The asset management profession is primed to be transformed by digital twin technology, and those who embrace this technology will reap benefits not only today, but well into the future.
To learn more about implementing a digital twin for Real Estate, download our ebook here.