Facilities Management Middle East
COVER STORY
FACILIO, A US-BASED START-UP, IS GAINING MOMENTUM BY RIDING ON THE WAVE OF O& M DIGITISATION POST PANDEMIC
The Rise of Operations Tech in Real Estate . Facilio, a US-based start-up, is gaining momentum by riding on the wave of O& M digitisation post pandemic
The pandemic will fade, but its effects will linger. With economies reopening in full swing across the world, real estate owners and operators are breaking the inertia, digitising operations, and preparing to thrive in the long term.
The past year has served as an inflection point for the commercial real estate industry, not only in terms of intensifying the need and interest in operations technology, but also actual adoption.
It is the seventh development plan for the emirate since 1960.
The pandemic impacted the macro CRE (commercial real estate) environment in several ways. It forced the industry to recalibrate its focus onto safety, hygiene, security and ROI, at a time of reduced occupancies & revenue.
While economic recovery has kicked-in globally, and overall rent collections have bounced back to healthy numbers, the pandemic has made agile and nimble operations, as well as cost management, a top priority for CRE organisations. Looking ahead, CRE organisations have their path carved out for them now - to rapidly adopt digital transformation and a technology-first mindset to build operational resilience and maintain a strong competitive positioning in today’s climate.
A study by Deloitte estimates that operating costs could go up to $19 per square foot in 2021. Statistics like these are driving strong interest and adoption of operations & maintenance (O&M) technology to help CRE owners optimise their costs by using agile operative practices. Having gotten a taste of operations tech in the aftermath of the pandemic, portfolio owners & operators now want more.
This growing interest explains why Facilio, a software firm headquartered in New York, with global operations, increased its square footage under management by a whopping 50%, post-pandemic. And the panacea they offered? Helping real estate portfolios and service providers develop a structured digitisation plan, automate key O&M processes, and focus on the occupant experience.
Facilities Management Middle East spoke with Prabhu Ramachandran, founder and CEO of Facilio, on the big-shift within the industry and how Facilio’s leadership in the emerging category of data-driven and connected RE operations.
LEGACY O&M TECH IS NOT DESIGNED TO DELIVER EFFICIENCY GAINS OR ELEVATE THE EXPERIENCE
All property operations technology is about automation. But often portfolios have complex legacy processes, various diverse systems (that don’t talk to each other), and employ multiple layers of outsourcing that make even modern O&M strategies unsuitable for a permanent pandemic-induced shift. For instance, automating operational workflows for unique business needs or optimising system schedules for dynamic occupancy still relies on manual processes, vendor calls, or expensive integration efforts. Information from systems is locked at a site level and leadership decisions have largely been intuition-driven bets rather than data-driven roadmaps—an expensive trade-off today. Clearly, O&M tech/software wasn’t designed to fine-tune operations for efficiency gains or to elevate the experience.
Facilio believes that advances in artificial intelligence, IoT, and cloud technologies, specifically platform-led approaches that unify data silos and allow multi-stakeholder access, can do away with this tedium.
“There is both a sharp change and an enormously significant one,” says Prabhu Ramachandran, CEO of Facilio, who helms the platform that is used by modern O&M teams globally to manage over 60m square foot alongside applications that automate unique workflows and control systems remotely. “Sharp because before Covid-19 property operators adopted technology austerity. Even as proptech grew and sensors and devices got commoditised, firms devoted relatively lesser attention to differentiate properties via operational agility or experience or sustainability, and more to fancy facades and flooring. Significant now because investing in tech and tightening O&M leaks has emerged as the secret sauce to building organisational resilience. A unified O&M software layer is helping firms recover and reposition the value of existing spaces in the aftermath of the pandemic.”
WHY RE OWNERS & FM’S ARE MOVING AWAY FROM LEGACY SYSTEMS POST-PANDEMIC
“The opportunity for data-led
operations is enormous,” adds Ramachandran. “In a data-led future, the ability to have a connected operational environment will be as important as the skills people bring to bear.”
Ramachandran compares the rise of data-led operations to the rise of another transformative technology. “Years ago, the consumer car industry was about automobile prowess and the aesthetics of the vehicle,” he says. Today it’s all about connected features and the owner’s ability to improve vehicle performance through data-led insights. We can see a similar trend in the buildings industry today, where there will soon be a connected layer of O&M technology in every new and retrofit project, that not only puts the owner/operator in control but also ensures innovation-readiness.”
Since the crisis, the industry has raised its game, and moved away from complaining that the ‘last useful operational innovation was 20 years ago towards software adoption’. Portfolio owners and operators are modernising their data-collection & asset management capabilities, and their O&M functionalities. Smart building teams have created a pragmatic world of software-led “data unification” projects, of which predictive maintenance, portfolio-wide visibility, and cloud-based performance optimisation are the most tangibly popular use cases for efficiency and experience.
“Such outcomes require a wellcalibrated platform that is optimally productised for scale and time-to-value, and supports IoT-enabled connected capabilities with multi-party frontend applications to perform specific functions. To building operators, this means better transparency of opex management, stronger stakeholder engagement, and improved agility. And eventually this data-led approach translates into enhanced asset value — a differentiating pillar for CRE competitive strategy,” explains Ramachandran.
HOW FACILIO PREDICTED & EVANGELISED DATA-LED, CONNECTED OPERATIONS
RE owners and FMs are moving away from legacy systems and the pandemic is accelerating this shift
It is this appeal that has set Facilio apart, even within the context of the current seismic shift to techled operations in real estate. The company has had an evangelical zeal in championing this vision, since its inception four years ago.
Well before the pandemic reset the industry requirements, the ‘ Verdantix Green Quadrant IoT Platforms For Smart Buildings 2019’ identified Facilio as a ‘strong challenger with a clear vision, established financial strategy and an innovative product that delivers transformative value addition’. In early 2020, Facilio was named in the Guidehouse Insights Leaderboard by Navigant Research that examined top 14 intelligent building software providers and their platforms for optimising operations.
Facilio’s deep understanding of evolving market needs has positioned
IN A DATA-LED FUTURE, THE ABILITY TO HAVE A CONNECTED OPERATIONAL ENVIRONMENT WILL BE AS IMPORTANT AS THE SKILLS PEOPLE BRING TO BEAR.
the company perfectly to help its customers to respond to the pandemic, and thrive in the post new normal economic scenario. Before the pandemic, Facilio invested heavily in strengthening data collection, integrations, and product capabilities using ML-generated insights that focused on outcomes of operational agility and efficiency. When Covid-19 hit, opportunities nearly doubled, putting the company on a path to hyper-growth.
With an innovation driven DNA, and a strong platform and technology that was built specifically for real estate operations, Facilio has rapidly established a global presence as an industry leader, managing over 450 buildings including renowned landmark projects across North America, Europe, the United Kingdom, the Middle East, Australia and the Asian markets—with expansion plans that involve new markets around the globe.
“While data, mobility, and softwareled operations are being perceived as a latest breakthrough by many today, Facilio was one of the few industry leaders to have championed this shift in the building operations space, since its inception,” says Ramachandran.
The company has a strong moat of product flexibility, ease of implementation that compresses timeto-value from months to weeks, and a global ecosystem of channel partners focused on software sales. While the giants of automation (Honeywell, Siemens, Schneider) are tying up with leaders in corporate IT (SAP, Microsoft, Cisco) and are pushing into the building operations space,
Facilio’s specialised platform plus applications approach offers customers a viable and attractive alternative, with useful rather than cutting- edge O& M add- ons, in a conventional ERP/ EAM bundle.
“We have the advantage of having meticulously built the right solutions, much before the pandemic created an industry-wide awareness about the merits of the approach. You could say that we have earned our stripes as a highly focussed tech player that introduced a transformational solution to a traditional market like real estate—much like how Uber did in transportation. We have a responsibility to help the built environment transform towards dataled operations and take advantage of these technologies” Ramachandran adds.
WINNERS WILL BE THOSE WHO ARE QUICK TO ADAPT AND ADOPT TECHNOLOGY
The pandemic has promised a world where more gets done with less time. Retailers are investing heavily in online services to compete with the likes of Amazon. Restaurants are improving the dine-at-home services even as dine-in reopens. Workplaces are finding ways to keep their customers and staff connected when they are not in office. Overall, firms are identifying and defining the new rules to play by keeping data (and digital strategies) at the core of it.
It is revealing that the UAE’s vision, that values innovation above all else, is indicative of increasing the capacity and resources towards sustainable development and improved asset value. The larger market should take a similar approach and master the art of walking the tightrope of seizing new opportunities while breaking down functional silos and enhancing agility.
“Portfolio owners and operators need to prepare for a long-term shift in how O&M works, as momentous as the leap to internet banking or connected cars. That means beefing up digitisation of workflows for productivity gains, embedding sustainability as a path to everyday cost-savings, and preparing O&M stakeholders for a more peripheral role. Platform-led O&M technologies are the next great innovation in the building industry, and they promise to be hugely consequential and ROI-focused than the humble spreadsheets and point solutions,” concludes Ramachandran.
With the real-estate industry working on over-drive to achieve dramatic results, the pace of the CRE industry’s transformation is fast and furious. So what does this augur/ forecast for the future? That the winner will indeed take it all. While there is little doubt about the benefits of technology for real estate operational excellence, the market continues to be divided between leaders and followers. Winners in this highly competitive space will be those that are agile to adapt and adopt technology platforms and innovation-led technology partners to realise cost savings, operational efficiencies and superior customerexperiences.
Tech- driven operational efficiency will bring in strategic business value for REs