Click and mortar

Click and mortar

Technology in sectors such as banking, telecommunications or medicine is accorded the importance it deserves, much like the aorta in the human body. The role of latest technology in the Indian real estate industry, though, is still considered cosmetic. Apparently most companies in India have “very little regard for the value placed on software as it is an intangible asset that they cannot see, feel or touch.”
Enterprise resource planning (ERP), or ERP systems, typically underline the connection between the major processes of a company. Be it to offer visibility in accounting, estimation, construction management, or to manage cash flow. Industry ready ERP solutions for the construction and real estate industries help integrate core construction management processes with the accounting and scheduling systems.

ERP product
Balaji Sreenivasan, founder and CEO, Aurigo Software, explains the evolution of ERP systems. “ERP systems in the past have only catered to the manufacturing industries, automating the 4Ms of any business (men, material, machines and money).

Today ERP has evolved with industry add-ons for each vertical, making the deployment that much more successful with reduced deployment timelines, reduced customisation expenses and most importantly, with industry best practices available out of the box. This has coincided with the fact that large ERP vendors (SAP, Microsoft and Oracle) have significantly reduced their prices.

BRIX 2009
Aurigo Software recently announced the release of BRIX 2009, the company’s fifth generation product. Coupled with established ERP platforms such as Microsoft Dynamics AX, SAP or Oracle, it makes for a complete industry ready ERP solution, covering finance, inventory, stores, CRM, HR and Payroll. Specific to real estate, BRIX 2009 works closely with Microsoft Dynamics AX and Microsoft Dynamics CRM to automate lead generation and processes involved in order booking, transfers, managing sellable units, preparing demand notes (invoices) and hand-over.
The product is an end-to-end estimation, contract management and inspection system. It is best used during the estimation, planning, tendering, project management, plant and machinery monitoring and site inspection phases.
One of Aurigo’s four Indian clients, is Chennai based Navin Housing and Properties. The company has been using appropriate software in its construction projects since the mid-Nineties. AutoCAD for the preparation of drawings, Staadpro for modelling based on the architect’s final drawing, build super fast (BSF) for estimation, and so on and so forth.

In the field for more than two decades, the company then required a better manageable ERP system with a lot of inbuilt systems in order to expand to other parts in Tamil Nadu as well as other states. According to R Kumar, Managing Director, Navin Housing and Properties, the company opted for BRIX 2009 so that all its construction projects at various locations could be connected live with its corporate and registered offices.
This was done so that each activity could be captured immediately in order to improve the efficiency, reduce the workload and to monitor all the department functions.

And what are the company’s expectations from the ERP solution?
“By using Aurigo’s BRIX 2009, we expect increased efficiency of all the staff, reduction in workload, reduction in time, decreased project duration and above all, better monitoring of performance of various functions,” says Kumar.
Another of Aurigo’s Indian clients, Delhi-based RDS Project, is doing a pilot project in Maharashtra with the new ERP solution. Mayank Goyal, Director RDS Project Ltd, explains.

“After doing a thorough study of our systems and processes at our geographically spread regional offices, we discussed and finalised on a standard system.
After making the necessary changes to Aurigo’s existing ERP system, for the pilot project, we are feeding all our past and live data and checking the results.”

Technology vital
Since use of the BRIX ERP solution is still in its implementation phase, it may be too soon to speak of results.
Nevertheless, one fact is clear. As Kumar puts it, “Technology is in fact a vital facet of Indian real estate. And unless technology is used widely, realty companies will not grow, both, in terms of efficiency as well as volume.”

Considering that Indian organisations set aside less than 0.15 per cent of their revenue on IT spend, this buys them very little, confirms Sreenivasan. “Even a five per cent reduction in project costs is sufficient to recover the cost of technology investments several times over within a year for construction and real estate companies.

The bottom line is that there are no free lunches and construction companies should open their wallets a little more on IT and invest in technology.
 That is how the realty industry operates in the developed countries, providing higher levels of efficiencies, increased profitability and greater transparency.” It goes without saying that even technology cannot succeed without proper adoption and accountability.

If funding sources like governments and banks were to create policies that force the real estate and construction companies to have greater norms for financial transparency, quality of construction and project accounting, it could well mean ushering in a brighter future for Indian real estate.