Procurement is one of the key pillars to delivering a good, durable, stable, sellable and profitable real estate project. This industry has seen days where the choices were limited, projects small and business laws restricted, so the functions of procurement were relatively simpler. But with the advent of endless options, customizations, mega scale projects and ever changing trade & business laws have put the professionals in the field under immense stress to make the right decisions, quick decisions at all times. So here’s a brief list of major challenges that the industry is facing at this point, you might want to consider before you make the big move.
1. Market Knowledge:
Real estate market place is ever-changing. Everything from seasonality to macro-economic conditions affects the procurement decisions. For instance, the on-going US-China trade war has changed the dynamics of supply of material, availability, logistics, pricing and legalities of products and services throughout Asia. This necessitates that a procurement professional be aware of all that’s happening around and be equipped with expert opinions & forecasts. Reading regularly on the news, subscribing to industry news webpages, journals and just talking to subject matter experts certainly adds a lot to your expertise.
2. Business Network:
The importance of a sound business network can never be understated. To have a good list and a good mix of business contacts is the key to successful business management. The essentials are not only a database of peers, but also of relates professional (like architects, designers, engineers, quantity surveyors, etc.) and suppliers who can deliver when others fail. Supplier relationship management also plays a key role in your own delivery, financial and time commitments, and negotiations which in turn require business network. It’s good to relook into your business network once in a while and try being in touch with all who are important to you on a regular basis.
3. Communication Management:
Effective transactions happen with effective communication. Effective communication results from knowing the people you meet or deal with well ahead of time. A good understanding of what they do, the products & services they provide or the projects that they work on, their pricing structure, level of customization and flexibility, their experience & expertise and much of such information collected ahead of your interaction with them helps you make more informed and calculated decisions. And of course, meeting them in person is far more effective and efficient than to keep communication on emails or calls. This helps you build long-term and a direct relationship.
4. Innovation & Ideas:
At the end of the day, real estate procurement is strengthened by the exclusivity of the products used for delivery of projects. Innovation not only adds to the exceptionality, functionality and utility of a project but also the economic value it creates. In short, Innovation provides a strong competitive advantage.
5. Summits & Events:
Focussed business events will not only provide you with the right exposure to work in-line with your object and strategy, but also create new avenues to explore the sector in novel areas. They essentially provide a gateway to achieve an advantage on all the points discussed above. These are also great platforms for you to present your best self and your company to garner the interest of peers you are interested in. Sector specific closed door events like Real Estate Development Summits by GBB Venture offer all of these in a nutshell.
This is our take on building efficiency in real estate procurement. As a procurement professional, what’s your thought on adding value to the process?