Digitization vs Digital Transformation in Real Estate

Digitization vs Digital Transformation in Real Estate blog post

Digitization and digital transformation are two buzzwords that often make rounds in today's real estate industry. Both play a significant role in shaping our industry's future. However, it's easy to get them confused. Understanding the differences between the two is critical for companies seeking to thrive in an increasingly technology-driven environment.

What is Digitization?

Digitization involves converting manual processes into digital formats. In the world of real estate, this translates into replacing traditional paper-based methods with digital technologies.

Let's illustrate with a common real estate example: leasing agreements. In the past, an employee would have to fill out a leasing agreement, writing details such as the tenant's name and start date onto a physical form using a pen. After filling out the document, copies would be made and filed away into a physical cabinet.

Today, this once manual process has been digitized with the help of leasing systems like MRI Systems and Yardi, enhancing both speed and accuracy. These digital systems may even incorporate advanced technologies like AI or machine learning to further refine the process. Now, any authorized person within the company can quickly log into the system and access leasing information, which is neatly organized in a digital database.

While this shift to digital is undoubtedly beneficial, it brings about both opportunities and limitations. On the one hand, with digitization, data is now readily accessible and organized. Any authorized person on the leasing team can log into the system, pulling up leasing data at the click of a button. This shift can lead to increased efficiency within the leasing department, potentially removing the need for cumbersome file cabinets and hours of manual data entry.

On the other hand, the limitations of digitization become apparent when we consider the broader context - the entire portfolio. The newly digitized leasing data is often confined within that specific leasing system and continues to operate in isolation. The leasing team might be able to work more efficiently, but can the property management team leverage that digital lease data to improve their processes? Can the finance team access this data and draw meaningful insights for financial planning? Digitization doesn't automatically enable such cross-functional collaboration or strategic decision-making.

In essence, digitization's main achievement is to get information organized and quickly into a digital database. However, the pressing question becomes: what can we do differently, or better, now that we have this data in a database rather than a filing cabinet?

That's where the concept of digital transformation enters the picture, empowering businesses to use that data in transformative ways.

What is Digital Transformation?

Digital transformation differs significantly from digitization. It doesn't just focus on specific processes but transforms how an organization operates and makes strategic decisions. It's not about merely incorporating digital tools into operations but leveraging technology to rethink business models, culture, and customer experiences.

Let's make this more clear with an example. Imagine a traditional real estate company managing multiple properties with different systems for leasing, property maintenance, tenant feedback, energy management, and other functions. Each of these systems operates in isolation, focusing on their own tasks. They do not naturally communicate or exchange data.

In a digitally transformed scenario, this real estate company would employ technology to create a unified platform integrating the data from these systems. Information from all diverse operations would flow into this master platform and give them the ability to see a bird's eye view of the entire portfolio. This would allow for insights that were previously impossible to achieve when the systems operated separately.

For instance, the company could identify a correlation between tenant satisfaction and maintenance response times, or between energy efficiency and lease renewals. But it doesn't stop there. Insights like these can prompt strategic decisions and action plans.

Given this new perspective, the digital transformed company might decide to form a dedicated team tasked with tracking and maintaining response times across all their properties. This team could use the unified platform to monitor real-time data, identify key areas needing improvement, and implement changes. They could also use the system to track the effectiveness of their changes, seeing in real-time how their efforts impact tenant satisfaction and other important metrics.

Another example: perhaps the consolidated data sets suggest a link between high energy efficiency and lease renewals. The company could then invest in green technologies for their buildings, or propose sustainable initiatives like recycling programs to attract and retain eco-conscious tenants. The possibilities for strategic improvement are endless and can be constantly redefined as new data and insights come to light.

So while digitization is a part of the journey, digital transformation is the destination – a state where technology is not just an add-on but integral to the company's operations and strategic decision-making. It takes more than filling in digital forms. It's about harnessing the power of technology to change the way you do business for the better.

Are you Digitized or Digitally Transformed?

Still not sure? Here are a few simple criteria to help determine if your company is merely digitized or has undergone a digital transformation.

  Digitized Digitally Transformed
Use of Technology Technologies are used to make existing processes more efficient. Technologies are used to create new, innovative ways of doing business.
Integration of Technology Technology is used in isolated departments or processes. Technology is seamlessly integrated across the entire company.
Decision Making Decisions are made primarily based on traditional methods and strategies. Decisions are made using insights derived from digital data, allowing for more strategic planning.
Company Culture Employees view technology as just a tool for specific tasks. Technology is ingrained in the company culture, and is viewed as essential for all aspects of business.



Recognizing the distinction between being digitized and being digitally transformed is a significant step towards embracing change. If you've realized that your business falls under the former, congratulations! You've already begun the journey towards digital transformation.

Digital transformation doesn't happen overnight. It requires dedication, perseverance, and a clear vision. It's about understanding how technology can reshape your business and accepting the effort required. It also involves convincing the rest of your organization to buy into this vision, which is no easy task. But with clear goals and an unshakeable belief in the potential benefits, you can navigate this transition successfully.

So, what's next? In our upcoming blog posts, we will delve into practical next steps, starting with identifying a single area in your business that could benefit from digital transformation. Let us know in the comments what you'd like to see more of, and stay tuned for our next post!

By embarking on this journey, you're not just future-proofing your business—you're setting the stage for unprecedented growth and success.


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Nisha Garigarn

Nisha has 8+ years of experience using technology to create delightful customer experiences in real estate. As VP of Solutions, she's helped deploy ility across 60 million sqft of real estate. She is based in Brooklyn, NY.


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