Thomas Herr joined EVANA as CEO in May. The former CBRE executive spoke with immobilienmanager about his goals.
Whatis digital expert Thomas Herr’s opinion on where is the Real estate industry is heading in terms of digitalization?
Thomas Herr: Our industry is slowly but purposefully developing into a data-driven industry. However, for some time to come, there will remain a mix of analog and digital processes. This makes solutions like ours all the more important, as a platform where you can manage both data and documents and access them through automated processes. With our solution we integrate into the digital workflow chain of real estate companies at an early stage – among other things we enable the mining and refining of data. In the classical industry, we would be those who extract the oil from the ground, from which gasoline is then made.
What is necessary for the real estate industry to become more Digital?
The work on a ‘unified data model’ for the real estate industry is a central issue in the digitization of the industry. The real estate industry lacks such a common data model. To help the industry achieve this we are involved from many different angles, such as the ZIA or gif, or in cooperation with other companies to make progress.. This is a common task and cannot be achieved by one company or body alone.
Let us first take a look at your own company. You are the CEO of Evana since May. Which solution do you offer and what is special about it?
In essence, we are a classic software house, which is based on three pillars. Firstly software development is the basis for the further development of our platform. Second, data modeling: We extract data from different document types. We don’t use a sledge hammer to crack a nut, that means: We do not take all available technologies and then apply them to a disordered set of documents. Instead, we proceed very hierarchically. First, we record which document, because it is possible to derive relatively concrete information from it, what kind of data it will contain. In the second step, the platform can extract the data much easier, because it is based on a much narrower set of conceivable data. We are permanently working on the further development of data models for different document types.
The third pillar is still missing.
True. This is the implementation of AI technologies. We use for example elements of machine learning and image recognition but are also developing elements of semantic speech recognition. The goal is to use low effort to achieve the most precise result possible. Today we are already able to categorize about 300 different document types, of those more than 100 document types have a recognition rate of 95 percent. This corresponds almost exactly to human precision.
Where is Evana standing right now? Do you already belong to one of the established digital companies in the real estate industry?
Of course, the further development of such a platform is never finished, but we are just leaving the stage of the original development of the platform and areadvancing into the roll-out. That is why we must pair the three pillars with excellent customer service and project management. The larger the customer, the more importance of additiional services and implementation support.
How long does such an implementation phase take with new customers?
With large portfolios and many hundreds of buildings located in different countries, the entire implementation phase can last a whole year. Often the technical implementation of the system is not the biggest challenge, but change management. How do I introduce and train the employeesproperly with the new system? How can I improve processes? You can say: The same amount of money that you would spend on a software implementation project will be needed for training and onboarding your workforce. Especially if you still have some catching up to do in this respect.
Has the long lamented cultural gap between digital companies and classic real estate companies somewhat closed? Are both worlds beginning to merge?
In our case, we have the advantage that we do not require volume business with hundreds of customers, but rather a few very large real estate companies with large portfolios. These companies take a very professional approach to their digitization and recruit employees at the operational level who are very committed and competent. The entire industry has improved a lot. We can already see this from the fact that large real estate companies pursue so-called greenfield approaches when bidding for tenders . This means they leave their entire existing software structure outside and say: Now let’s plan what it would look like if our processes and systems will be integrated into an ideal digital world . In the end, they then decide on things that are implemented immediately or later. With Evana we are usually with the first wave, because our platform provides the data and insights for building up applications.
What are your growth plans? Does Evana conquer the worldwide market?
Internationalization is a goal for us. But the DACH region initially offersthe most obvious and best market opportunities, because our system is made and designed in the German language. However more than 15 percent of the documents our system can read are in English. UK, USA, Canada, or even Australia and Singapore are certainly interesting Markets to be named first for expansion. Currently, we have for example three POCs (proof of concept) with companies from Great Britain in negotiation. Also many of our DACH customers are international with assets all over the world.
What does Evana do if at some point a data-driven industry becomes a reality? Would you be redundant if reading of data from documents would become unnecessary.
In that case, our role as a bridging technology would indeed be lost. But I think, realistically it needs at least another decade, an infinity in the digital world. At the same time, the question already arises as to what to do with data already gathered. How are new values created from and with the data created? Evana is currently concentrating on the structure of information that makes data available for processes and evaluation. Tomorrow, with the help of the technologies we have mastered, we will still be the experts in data engineering and AI within the real estate industry. This will be the answer to our customers big question about the new data economy – how do I realize the value of the data?
Finally, a question on the consequences of the CoVid 19 pandemic. The industry is talking about possible profound distortions on the different asset classes. Are you expecting upheavals?
I think there could be very disruptive changes because we will see a change in demand in both commercial and residential areas. However, it will not affect all asset classes equally. In addition, it should not be forgotten that it will probably take our economies 20 years to digest the massive increase in debt or the renewed easing of monetary policy. I’m afraid the expression ‘Corona-related’ will be with us for a long time to come.
This interview by Markus Gerharz was first published in German in issue 9-2020 of the magazine “immobilienmanager”.