Improving Value Creation in Real Estate Business Through Virtuality

Aalto University, P.O. Box 11000, FI-00076 Aalto www.aalto.fi Author Jan Olin Name of the publication Improving Value Creation in Real Estate Business Through Virtuality Publisher School of Engineering Unit Department of Real Estate, Planning and Geoinformatics Series Aalto University publication series SCIENCE + TECHNOLOGY 3/2013 Field of research Real Estate Business Abstract Especially in the recent decades, information technology (IT) has intensified the value creation in companies and also enabled a number of new ways to create value. This study aims to discover how virtuality in particular could help improving value creation in real estate business and by what means this would be possible. For this purpose, the ambiguous – as it turned out to be – concept of virtuality needed to be outlined as it is from the perspective of companies in the real estate business. A literature review was conducted in order to outline virtuality and to generate a value creation framework for evaluating the capability of creating value within the value streams of companies in the industry. This framework was based on Lean management principles. The empirical part of the study consisted of case studies. The information from the literature review was applied in the contexts of the case companies, which represent the real estate business in Finland. Means of data collection included interviews, questionnaires, workshops, and brainstorming sessions with the end customers and those participating in the value creation processes. After determining the current situation of the case companies in terms of value creation and its challenges the applications of virtuality to study further was narrowed to four: integration of information systems, telepresence, virtual model of a building, and building information modelling (BIM). Then the potential impact that utilising these applications would have on value creation was simulated on a hypothetical level. The main results of the study are not only based on the empirical part, but also on the literature review. Approaching virtuality from the real estate business perspective, the literature review concluded in a framework presenting two distinct concepts of virtuality: organisational virtuality and digital representation virtuality. The empirical part of the study showed that some of the potential that virtuality has is currently left untapped in the Finnish real estate business.Especially in the recent decades, information technology (IT) has intensified the value creation in companies and also enabled a number of new ways to create value. This study aims to discover how virtuality in particular could help improving value creation in real estate business and by what means this would be possible. For this purpose, the ambiguous – as it turned out to be – concept of virtuality needed to be outlined as it is from the perspective of companies in the real estate business. A literature review was conducted in order to outline virtuality and to generate a value creation framework for evaluating the capability of creating value within the value streams of companies in the industry. This framework was based on Lean management principles. The empirical part of the study consisted of case studies. The information from the literature review was applied in the contexts of the case companies, which represent the real estate business in Finland. Means of data collection included interviews, questionnaires, workshops, and brainstorming sessions with the end customers and those participating in the value creation processes. After determining the current situation of the case companies in terms of value creation and its challenges the applications of virtuality to study further was narrowed to four: integration of information systems, telepresence, virtual model of a building, and building information modelling (BIM). Then the potential impact that utilising these applications would have on value creation was simulated on a hypothetical level. The main results of the study are not only based on the empirical part, but also on the literature review. Approaching virtuality from the real estate business perspective, the literature review concluded in a framework presenting two distinct concepts of virtuality: organisational virtuality and digital representation virtuality. The empirical part of the study showed that some of the potential that virtuality has is currently left untapped in the Finnish real estate business.