H&A had the pleasure of providing an article for the Italian-based magazine, The Procurement. David Hickey, Senior Director of H&A, writes about the Technological Advancement in Site Location Strategy through the lenses of physical advancements, digital advancements, and communications advancements. The full article is below.
Technological Advancement in Site Location Strategy
By: David Hickey
In today’s age, multinational corporations are faced with tremendous technological advancements leading them to constantly evaluate their business strategies and core objectives.
The real estate operations are now more than ever at the forefront for corporate executives and leaders, where they are seeking the most optimal location for their operations. As a result, the site location strategy process is evolving significantly to support the dynamic, critical decision. Industry experts are developing advanced applications and utilizing innovative platforms to better serve their corporate customers in the extensive process.
Moreover, companies themselves are undertaking new ways and techniques to advance their location strategy and, as technologies evolve, the process of selecting a site will also evolve. Though site selection is both an art and a science, available technological tools can aid the science behind site selection to eliminate misnomers and previous held beliefs about communities, to instead discover the truth through data and proven analytics.
In this technologically-driven world, professionals are developing easy-to-use software and customizable tools to support the site selection process. The following article will shed some light on how some technologies and trends of the 21st century are affecting the industry – either good or bad – and how they are bringing the industry into a new era.
Aerial Drone Technology
A fascinating development in the site selection process is the use of drones to show clients property and building designs. Site selectors are utilizing drone technology to provide a new visual perspective on properties and facilities. Drone technology allows corporate executives to visually understand the full scope of the property without spending the time or resources to travel around the world or invest in more traditional aerial photography. The future will find aerial drones reviewing environmental concerns, security apparatus, and maintenance needs, just to name a few, all from a distant location. The true utilization of this technology is only in its infancy, as the industry is just beginning to take advantage and recognize the complete potential.
Another growing trend that’s effecting the site selection process is Cloud Computing. Cloud Computing is becoming a necessity for businesses across array of industries. Many companies are investing in cloud computing for larger bandwidth availability and reduced costs. As comes with investments in cloud computing, an increased requirement for robust data centers becomes prevalent. Data centers are being established all around the world as industries move deeper into the digital age. Microsoft alone spent $2 billion recently on two new data centers, and Apple spent $1 billion on a new iCloud data center. The site selection process for these data centers is becoming more and more complex, as corporate executives must consider a list of factors, including infrastructure, climate, skilled labor, and geopolitics, among many others.
Social Media Data
As many consider social media to be a tool of marketing and entertainment companies, corporate executives are also capturing data to support their location decisions. Utilizing social media data effectively, companies are gaining a better understanding of labor costs, quality of life, employment competition and saturation, traffic patterns, and many other key data points found within the troves of information available. Specific platforms are transforming the way that the site selection process is conducted. LinkedIn, Indeed, and Glassdoor are just a few resources that are used today by many industry experts to collect data for their site evaluation phase. These platforms can be used to gather labor trends, labor availability, salaries, educational backgrounds in specific areas and numerous other workforce-related data points. For example, Glassdoor can be used to find the types of labor and the workplace dynamics of a particular industry and/or community.
When considering workforce numbers alone, more people today are turning to online sources for employment than they are tapping into their own community and networks. The data from these searches alone can provide priceless data in the site selection process. These platforms are key in the site selection process and are being used progressively more and more.
Technology is changing the nature of site selection not only through social media but also by connecting people across the world. Corporate executives are relying on face-to-face communication platforms such as Skype and WebEx to have meetings with clients and advisors around the world. Meetings via video conference are revolutionizing how companies make location decisions. In our not so distant memory, corporate leaders needed to be in the same location in order to effectively operate a business.
Today, with advanced communication technologies, different operating functions do not have to be located with one another. These innovations have allowed for site location decisions to encompass varying factors that were not as pertinent as before, such as labor costs, commute patterns, and tax liabilities, among a list of others.
Understanding this concept, site selection professionals now work with corporate executives to best capture this opportunity, and ultimately locate in lower cost, operationally effective sites.
The site selection process is constantly developing advanced tools and innovative platforms to help corporate executives make sound location decisions. Meanwhile, technological advancements are also leading to major changes in the overall approach of corporate real estate. Whether it be utilizing the newest aerial drone technology, or capturing big data analytics through social media, the future of how to make location decisions is already upon us. The coming years are exciting for the dynamic industry, which will undoubtedly lead to an effective and sound site selection process.