Marco A. Soriano, General Managing Partner, The Soriano Group
New Trends to lower costs and half the time. Really?
Alternatively speaking, the industry has always been changing from all perspectives with technology, but not just the integrated systems to manage inventory, but way way way before in pre-designing engineering and architectural phases. Some of the old school developers do not care much for it. But, all of the new generations taking over the industry are indeed deep learning themselves. It is about time, some of my board members at Soriano Group would say. The cost of constructions these days are insane and because of the time period we must all account for to delivery, it could changed a great deal the original financial model in place. The truth is the populations are always growing at almost exponential rates, and housing is always needed. But the basis of the issue relies on the demand/supply and the timing of it. This means that today we may all want the lovely home, but by the time it is constructed the price of it could have gone down to 25% less. Some developers hope the market is low to make the supply and create that demand at a higher price and that is their profit. I know! This is tricky unless you have already built yourself or bought your first home. In a recent Metro journal it was written that the New York City construction boom started to slow down. But, What does this mean? Well like all markets, it peaked and,the Department of Building Data can only show that. All municipalities have these records. However, it is valid to remember that just because someone had been granted the permit to build, that it may not be the case if they do not have the funding. After all, constructions take several months to be completed. No?
See in NYC alone it was issued a total of 165,988 construction permits in 2018, down from 168,243 in 2017 and well expected to be lower this 2019. THIS IS the moment for modular construction to take on. Can you see why? After all we are always in need to add a few more millions of square feet to our most populated cities or a few more square miles in new building space.
It is also strongly suggested that even though modular construction allows for shortened construction timelines—a benefit in a city that needs more affordable housing—it has proven difficult to build, with cost concerns and construction delays among the issues that have plagued modular companies. Not so much in southern Florida where the construction market still seems to be booming. Hence, it may just be that it is cyclical also its application. Still, from projects are being estimated to be completed 25 - 30 percent faster than a traditional building project—perhaps this can be the example an instructive case in how to do modular right. We all know it saves time, and as it scales up, it will start saving money. It seems that it is indeed a long-term strategy for the cities.
Let us turn the corner a bit.
It may be worth to mention that the industry has also shifted significantly on being smarter on the cloud with the Internet of things, big data and artificial intelligence. Most of the known leading cloud providers offer these business solutions that tap the power and many more emerging technologies. Specially, digital tech to manage Payment Operational Systems, Inventory Management and even blockchain systems.But I will leave this footnote for a future article. Do you remember that a few years ago construction companies used innovation and digital transformation mostly to create a differentiator? The dramatic growth in digital tech and cloud computing over the last two years has since changed the mindset. What? Yes, and it changes the price per square feet, too when buying or selling a property.
Let alone when building it from ground up. Regardless, today if your company is not innovative and leverage the latest tech available, then they are out of business. Commercial buildings and even the hospitality sector must implement online retail, banking, and other services because these are their main revenue channels. Yes, 84% of US banking customers used online banking for their transactions, and 43% used a mobile phone for these activities. So it is very easy. Target your new consumers with what they want. To undergo a digital transformation may need to re-engineer their current processes instead of doing old patchwork. Furthermore, your IT Executives must consider digital initiatives in tandem with their cloud strategy and not in isolation.
There is not doubt in my mind that the infrastructure to support compute power, storage scale, and speed of these technologies is best provided by the cloud. So you are already asking I hope: “Should I develop and host the infrastructure to support digital or leverage the improving robust one and services offered today?”
Lastly, if you are ignoring the digital revolution, then my dear reader it will be disastrous to your organizations as well as to yourselves. Humans and businesses generate trillions of gigabytes of data every day. Whether we realize it or not, digital is transforming our lives. It is essential for organizations to develop and implement a digital strategy that works with cloud initiatives and tools.