News: Developers to tap big data to handle demand, costs-29-03-2022
Developers have started to adopt tech and use advanced technologies in cost management to gauge the demand and plan their procurement strategies accordingly," said Saurabh Sharma, India director of David Adamson Group, a UK-based international construction consultancy.
Real estate developers are hiring tech companies and harnessing big data to mitigate the impact of rising input costs through accurate forecasting of demand and placing of orders with the right set of vendors – and at the right time.
The companies are doing predictive analysis, using procurement data of the past five years and expected demand from the upcoming projects, to aid decisionmaking and conserve costs
“Now, the prices are changing frequently. But a substantial amount can be saved by ordering at the right time - and from the right place,” said Naren Vijay, Executive Vice President, Lumenore, a unified business intelligence and analytics platform. “We are working on a couple of projects. We have realised that in real estate, most of the data is scattered. We do analytics, build big data for them and help them in optimising the cost of construction.”
Developers said the cost of steel has more than doubled and cement by nearly 38% in the last two years due to which the cost of construction has moved up by at least Rs. 500 per sq ft.
“Developers have started to adopt tech and use advanced technologies in cost management to gauge the demand and plan their procurement strategies accordingly,” said Saurabh Sharma, India director of David Adamson Group, a UK-based international construction consultancy. “Technologies such as BIM are helping developers stay ahead of the curve and pre-empt the needs of the project accordingly.”
Rising crude prices and disruptions in the supply chain have brought a lot of financial stress for the construction industry. Rates of construction materials have skyrocketed, leading to cost overruns at various construction projects.
“Advanced techniques such as predictive analytics have gained traction in the industry. By using historical data, machine learning techniques, and statistical algorithms, predictive analytics can identify the likelihood of future events,” said Aditya Kushwaha, CEO and Director, Axis Ecorp, which is executing data-analysis mandates for real estate projects. “These models are now also being used to ascertain the movement of raw materials prices.”
While input costs were already climbing, the pace has accelerated in the wake of the Russia-Ukraine war.
“The industry can use forecasting technology that will help in understanding the future demand, essential items to buy at the moment, inventory required, cost of raw materials and other important elements. With the use of AI and machine learning, the realty sector can predict the demand and preferences of consumers by analysing a humongous amount of data easily,” said Gaurav Kumar, business unit head construction chemical - SNF India.
CREDAI NCR, an industry body that represents real estate developers in and around Delhi, said input costs have gone up by about 30 to 40% recently, and the cost of a few items have more than doubled in the past two years.
Apart from realty developers of Delhi-NCR, the CREDAI members in Maharashtra are also contemplating work stoppage due to cost escalation.
“Predictive analytics tools can easily project a revenue chart for any commercial or residential project by evaluating data, identifying pricing trends, and identifying various risks,” said Vinit Dungarwal, Director at AMs Project Consultants Pvt. Ltd. “Consequently, the cost of raw materials can be predetermined and resources can be conserved.”
