Closing the Digital Gap

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Closing the Digital Gap

Published 26 November 2020

Tim Ryan, Partner and Head of TMT at international law firm DAC Beachcroft considers how the real estate sector can make the digital leap to transform business performance, and examines the associated legal risks.

This article first appeared in Estates Gazette 26 November 2020.

Predictive analytics to guide town centre repurposing and to inform energy use in offices; BIM (Building Information Modelling) to test different scenarios for large developments; helpful robots in shopping centres; and air quality monitoring are just some of the way the real estate sector has taken-up technology.

However, in common with many other sectors, the majority of businesses have been proceeding with caution, taking something of a pick and mix approach. We understand the potential of technology to improve experience, value and efficiency. However, closing the digital gap – the space between promise and delivery – is a bold leap that requires adaptation and commitment from every area of the organisation. It may be IT facilitated, but it requires the whole business to work together, and it needs to be led from the top.

David Seacombe, of leadership advisory firm Aston Beck notes that, “digital transformation is about changing how the organisation works together to improve value. It’s not something that you hand off to your IT department - digital refers to the speed and agility of approach. Information is digitised, procedures are digitalised, but the whole company is digitally transformed in order to stay relevant as markets evolve, customer preference changes and technology advances”.

Incremental Change

Value is generated by enhancing the customer experience, which in turn is dependent on better employee engagement, a revised operational process and a reviewed business model. Each of these four areas of transformation need to be progressed but not necessarily all at once. Start by identifying the change you want to make and then begin by working on small, clearly-scoped opportunities. In this way change is incremental and importantly, robustly-tested at each stage. Leadership needs to provide a strong story from the start, communicating the corporate purpose and urgency of need to employees and involving the relevant teams in planning the transformation.

COVID-19 has given us real experience of customers not just using technology to do things differently, but of doing different activities in different places. The paradigm shift for real estate is the geographical disconnection of activities. Technology allows interaction at scale and distance. In 2021, value will be driven by being customer-centric. By using technology to understand the customer journey and the customer experience, backed by the other three areas of transformation, we can become a customer-centric demand-responsive sector and make the shift away from the traditional product-dominated supply approach.

Focus on Legal Risks

Early exploration of the legal risks helps to ensure that the wider business context is carefully considered, and can give assurance to a business that is likely to be feeling uncomfortable and uncertain. Doing this at every stage of change helps establish a new framework of governance that is at the heart of establishing proper safeguards from the start.

The risks to be considered include:

  • Data: data is everywhere. Businesses need to be aligned to protect privacy and ensure compliance.
  • Intellectual property and ownership: intangible assets are very valuable and must not be overlooked, particularly where software and other digital assets are key. It must be safeguarded and exploited properly.
  • Platforms and systems: must be delivered or procured in a smart, agile way with suitable protections and safeguards built into commercial contracts.
  • Continuity: a digital mindset means even more exposure to technology. Digital resilience and possible speed of recovery need to be assessed.
  • Protection: the prevalence of technology substantially widens the attack surface. There is no traditional perimeter; instead a disparate network, a potentially open door through which attackers can infiltrate.
  • Supply chain: third parties have to meet organisational standards and values, with relationships being carefully considered and embedded to ensure resilience.
  • Contracts: these need to be properly reviewed and drafted to ensure resilience, with proper assessment to consider if they offer appropriate protection and future proofing. Procurement teams will be involved where relevant and often require specialist support.
  • Regulatory: frequently projects push at the boundaries of established practice. Work with the regulators to ensure they understand what you are hoping to achieve and that you are trying to comply.
  • Employment: the restructuring of teams and an ongoing requirement for updating skills are just some of the changes likely to impact the workforce; a robust communications plan needs to underpin every action as well as appropriate legal advice.


Tim Ryan

Tim Ryan

London - Walbrook

+44(0)20 7894 6978

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