proposed research

Organisational Background

Grid Developers was incorporated in 1974 with an objective to undertake Real Estate Development and construction in India. Over the past decade the group has successfully planned, developed and constructed numerous residential townships. The group creates homes ranging from compact economy units to exclusive villas and bungalows, of which residential colonies like Jagsena and Oracle are prime examples.

Grid Developers are establishing themselves in the field of residential construction. Grid Developers’ yearly turnover exceeds, Rs. 100 crores. (US $ 20,00,000 ). The firm has a strength of 300 permanent workers and rest are on temporary basis (i.e.labour).

The process of real estate development is one that requires extensive knowledge and practice of all aspects of real estate: legal, financial and markets. Because of the special characteristics of real estate improvements – large size, long life, and long gestation period – success in real estate development is in large part determined by the accuracy of the forecasts of long-term market potential for the project.

Despite its magnitude of operations, Grid Developers still use the traditional way of doing business. All the expertise and knowledge lies with the employees. With employee movement valuable information is lost. With it’s business flourishing rapidly, in no time will the firm find it difficult to retain all that valuable information. In at least two instances, the firm has lost out prime sites to competitors who were better equipped in management of information.

An information system can help retain all that valuable information. This will enable sharing of information in a repeatable manner.Although the process for development of real estate varies from project to project, the various phases adopted by the firm are categorized roughly as below (in approximate chronological order):

Site selection / feasibility analysis
Property acquisition
Project design
Obtain entitlements /Land Development
Construction
Sales





The research will investigate the role of information system in all the phases of land development mentioned above.



Site Selection /feasibility analysis

In site analysis work, location is the starting point for the selection of the property. Location is not only important for the marketability of the project, but it is important for the regulatory approval and cost of the project. Connecting to the existing infrastructure (i.e. perimeter roads, existing water lines/sewer lines) is important to the overall cost of developing the land. However, location goes beyond pure cost.
Buyers are seeking subdivisions and housing communities that are well located and close to public services, public offices, shopping centres, and other amenities that add to the quality of life and convenience of everyday living. In terms of analyzing property for purchase deliberation and development purposes, location must be the primary factor in assessing the advantages of introducing a new project in the marketplace.

In the case of Grid Developers, the site selection officer visits prospective sites and by experience and expertise earmarks a land for acquisition. The criterion for selecting a site primarily involves the price and location. Often all the available options are not comprehensively compared, due to the lack of an Information System. In order to enable the firm to retain the knowledge of the sites and then reviewing it later to compare the sites, a checklist will be required (Appendix 2). This way the decision–makers will be better informed to make a choice.

Property Acquisition

This phase typically starts with devising a negotiation strategy. A contract for land purchase is prepared. The Land Purchase Contract is designed to present an "Offer To Purchase" and acceptance for the purchase of raw land, with no dwelling included.

It is imperative to get the terms of a land contract reviewed from a real estate attorney.
Grid Developers have an in-house attorney who insures the points given below:
1. That the homeowner is in fact the owner of the land described
2. That the title to the land is clear of all encumbrances to the title, such as mortgages or liens, restrictions etc.
3. That all property have been paid against the subject property, except for the year in which the property is purchased and subsequent years.
Grid Developers have their presence .In India the land use terms and building laws vary across states. Thus it will be good to know regarding the land laws of various states in India.

Project Design/ pro-forma

A design professional is engaged to complete work on construction plan, specifications, and cost estimates. A project pro forma is created to determine the level of profit the proposed project will return. A pro forma includes an operating statement forecasting income, expenses, and net operating income (operating profit). It also includes a forecast of the project’s total cost, including the cost of land, hard construction costs, and such costs as marketing expenses, surveys, architectural and engineering fees, legal fees and financing costs.

Alternate plans should be made and then compared. A market survey can be conducted to know what type and style of houses are selling in the marketplace. The firm can add to its information base the designs that appeal to the end user and cut down on cost.

Obtaining entitlements

This phase includes getting all the regulatory approvals. It becomes imperative that the attorney understands the local political and regulatory climate. So far the firm has a good going in getting all the approvals. A checklist is also maintained which enlists all the approvals required before starting with actual construction.

Construction

Construction is a feat of multitasking. Besides the manager and architect, every construction project requires a large number of laborers, carpenters, and other skilled tradesmen to complete the physical task of construction.
This phase is the most time-consuming and it is important to. keep track of budget vs. Actual costs. A spreadsheet can be introduced which provides accurate data at a much faster rate.

Sales

The firm advertises the project in local papers and through agents. The firm’s advertising policy can see certain improvements. One such improvement can be in the area of analyzing their competitor’s advertising policies. The firm should highlight what additional features it is offering. All the clippings that appear attractive can be stored in the information system for future reference.

Research Questions and Objectives

The objective of this research is to investigate the area of information system in order to make recommendations to the Managing Director of Grid Developers for the development of an information system for further projects and to make new marketing plans for selling of the finished or semi finished projects to attract customer in a more successful manner.
The key objectives of the research were identified using a Watson box (Appendix 1). These are:






Determine key information

To identify information that is needed during each phase of the project starting from site selection to sale of finished lots. In order to achieve this the author will have to access how knowledge is applied and retained.

Determine how information system can help the firm retain and disseminate its knowledge

To identify the benefits of information system over the traditional work approach the firm engages in. An identification of the loopholes in the current working approach would be required to make recommendations for an information system.

Market Study

Finding land to meet business objectives becomes easier once the specific use of land has been determined. It will include:-

Demographic analysis: - To study the number of households, age distributions, population changes and population trends.

Housing Factors:- To study the housing inventory for owner/occupied units and the vacancies ratios , trends in residential buildings activities, the potential demand for the number of units expected to be build, and the annual construction rate of housing units in the community.

Economic analysis:- To study the employment trends, family income distribution, and unemployment rates.

Community analysis:- To study where people are moving from , the sizes of the families, and why they are moving to the community and project further employment in the area. This information must be balanced with research on where people relax their income levels, the number and distributions of families according to their household incomes.
(Johnson, 2002)


According to Johnson (2001) the key things to remember while this phase are:-
1. Completing a market study to determine the needs of the buying public.
2. Checking on comparable land values to ensure that the price is consistent with other sub divisions.
3. Evaluating the physical conditions of the land and its potential of sub divisioning.
4. Knowing the cost of development
5. deciding on the purchase of land
6. Managing the land development process carefully.
7. Understanding the legal issues associated with the land.
8. Researching local, state , regional and federal regulations affecting the development potential of the site.
Literature Review

Purpose: To review the literature on Information System and Marketing plans for Land Development and how it can be used to plan and develop raw land into finished lots successfully.

There is abundant evidence in literature that supports the use of Information Systems in Land Development.

An Information System is a system that comprises people, machines, and/or methods organized to collect, process, transmit and disseminate data that represent user information. The primary goal is to present the end-user i.e. manager with useful information.

Nancy J opines that for an Information System to be effective, it must supply managers with information that is rapid, comprehensive and accurate.
Harry Timmermans speaks about a decision support system that is built upon information for better-decision making.
Marketing

Housing is one of the most basic needs of human beings. Providing affordable, durable and quality homes has always been one of the greatest challenges faced by the society. Over the years , significant research efforts have taken place to help meet the challenge of providing adequate housing.
(http://www.pathnet.org/si.asp?id=1057)
In today’s market to sell anything the product needs to have a proper marketing plan.
Grid developers have their own marketing plan but as now days internet marketing is getting popular day by day so they also need to capture the market through internet this is what I will be doing for them
According to Philip Kotler and Kevin Lane Keller ( 2006), ‘Marketing in the 21st century means branding the products and companies and establishing outside.’
The typical goal of Internet marketing is to attract prospects on the web and then get those targeted prospects to enter into a relationship with customers.
Advertising:- it is the most public , pervasive, and impersonal form of promotion. Advertising is any promotional device in a specific medium paid for by an identified sponsor. It is especially effective in generating awareness and interest(Dyer and Forman,1991).

Business analysis

Some topics like Benchmarking, Standardisation etc will also be considered while making Information system for the company.

Definations:-

Benchmarking:-Benchmarking is the process of gathering information about other companies in your industry to compare your performance against and to use to set goals.
(Neil Brenner et al ,2002).
Standardisation:- To standerdise is to set up norms. Norms are set of scores of clearly defined samples and the importance of standerdisation is that it gives test scores psychological meaning and thus makes interpretation possible.
(Kline, 2000)



Methodology:-

The research will be carried out using a combination of primary and secondary data.
Previous processes will be reviewed to glean information about the choice of sites, their marketing strategies and the profitability of the projects. The ongoing development will be closely monitored and the thought process will be captured in the form of checklists and questionnaires. The key question will be to identify information that is needed during each phase of the project starting from site selection to sale of finished lots. The on-site research will help the author to see and study the whole process firsthand.
A checklist to compare sites has been made during the course of this research and is appended at 2. A survey will be carried out to identify the needs of home-buying public. The results of the analysis will be appended to the aforesaid checklist. This will lead to a comprehensive checklist and will enable the decision-makers in their selection of the land. An example of the questionnaire is appended at 3. The survey would be targeted at home
Site selection officer will be interviewed to identify the expertise that goes into site selection. The interview will be structured and a set of predetermined questions will be used.

Action Plan:-

It has four phases.

September 2006 :- Will start gathering information by reading books on Information systems and Marketing.

October 2006:- Will try to make use of my knowledge to gather information about land in a particular area(area not yet decided by the company will get to know about it by the end of august).

November 2006 :- Will start making marketing scheme for the upcoming residential units.

December 2006 :- Will deposit my file to Mr. Bhuwan Girdher and another copy to the campus center of LJMU.

References:

à Harry Timmermans, Decision Support Systems in Urban Planning, pages 10-15

à David E. Johnson, Residential Land Development Practices: A Textbook on Developing Land into Finished Lots

à Neil Brenner et al, 2002, Political Science,page 196

àMarketing (Accessed on 28/02/06,18:30,http://www.pathnet.org/si.asp?id=1057)

à David E. Johnson ,2002,Residential land development practices,IInd edition page no. 3
à David e. Johnson, 2002,Second edition, Residential land development practices, Page no:-1
à Paul Kline, 2000, The Handbook of Psychological Testing, Second edition, page no :- 49)

à Dyer R. F. and Forman E. H., 1991, ‘An Analytic Approach to Marketing Decisions’, Prentice Hall., page no:- 267.

à Kotler P. and Kevin L. Keller, 2006, ‘Marketing Management’, 12th edition, page no:- 4

Appendix 1 – Watson Box



What

To identify information that is needed during each phase of the project starting from site selection to sale of finished lots.

To review literature on use of Information System for Land Development.

Why
The process of real estate development requires extensive knowledge of all aspects of real estate.
Grid Developers’ information system is in the form of people. With employee movement valuable information is lost. In order to retain all that valuable information an Information System needs to be in place to help the management in decision-making.
This research will investigate how to capture that information so that it can be shared in a repeatable manner.

How – Conceptually

Business analysis
Change and knowledge management
Marketing , Information system.

How
Questionnaire to identify primary needs of home-buying public.

Structured interviews.