The question of Real Estate EDM and data rooms is a recurring debate in all sectors. From commercial real estate to social housing, we handle more and more documents that need to be consulted as evidence in disputes or for audits. However, EDM (Electronic Document Management) solutions have not completely lived up to their promise, and are increasingly being challenged by two types of product: the DMS (Document Management System) that focus on new documents (the flow), and solutions based on Artificial Intelligence (AI) to process existing documents (stock). As a PropTech company, Stonal, for example, offers Artificial Intelligence solutions for working with document stocks.
EDM, an obsolete model?
Real Estate EDMs have been around for a long time. They enable documents to be dematerialized and organized using different processes. The principle behind these tools is based on human classification operations. This requires defining a structure adapted to each organization, involving all employees in handling documents, and storing them in the right place so that an external user can find them via the structure, beyond a simple keyword search. In a real estate DMS, documents must be correctly named and updated. With their considerable human resources and responsibilities, EDMs have been entrusted to documentation professionals and documentalists. Over time, however, these professions have disappeared from organizations, and responsibility for document management has been transferred to the individual.
Filing documents is a tedious and often uneven task, depending on people’s motivation. This also happens in real estate, where documents are often misfiled. The EDM tool is important for ensuring digital continuity and document archiving, but it is static and relies on the will of individuals and processes. While this works in smaller organizations, it can be more difficult to manage in larger ones.
Today, electronic document management (EDM) tools are widely used in many organizations, including large corporations. Some organizations have real estate EDMs specialized in the documentation related to their sector of activity, while others use corporate EDMs.
Document Management Systems
Document management tools, also known as DMS (Document Management Systems), are increasingly competing with real estate EDMs. Documents are seen as living entities, as organizations must continually produce new ones. One of the most important processes in document management is signature, which gives documents legal validity and enforceability against third parties. Today, many players offer document management systems, particularly for contractual aspects where signatures are of crucial importance. These systems tend to be extended to other document processes. Some of these operators, initially focused on signatures, are gradually broadening their scope to become document libraries. They manage signature-related workflows, then move on to storing and archiving signed documents. Some of them are even evolving towards editing solutions, where documents are structured with fields to be filled in, whether pre-filled or free text. Once a document has gone through this process, it can be hosted within these tools and doesn’t necessarily need to be stored in a DMS.
How to manage document flow and stock?
The real estate industry is unique in that it doesn’t sell standardized products. Unlike the manufacturing industry, where one can is identical to another, or the transport industry, where passengers can be compared according to the number of kilometers traveled, each real estate object is different. Renting a 100 square meter space is different from building a 50,000 square meter tower, which in turn is different from leasing an apartment, and so on. This specificity leads to document complexity, with numerous clauses and rights, and few possibilities for standardization or desktop publishing.
However, the question arises as to what to do with the old documents. Approaches vary from industry to industry.
In the real estate industry, for example, contracts are often complex, specific and frequently rewritten, making it difficult to publish predefined templates for managing these documents. However, AI-based technological solutions, such as those proposed by Stonal, are emerging to manage this mass of existing data and future non-standardized flows.
These AIs are machine learning models that can be trained to classify and extract information from documents. Stonal’s AI, for example, performs two types of tasks: classifying documents into different predefined categories, and extracting relevant data from documents, such as stakeholders, rent amounts and property addresses. These classification and extraction capabilities deliver tangible benefits to customers. Firstly, documents are accurately classified, making them easier to archive and retrieve at a later date. What’s more, documents are automatically renamed for better organization and readability. Finally, the data extracted from the documents can be used for analysis and decision-making purposes.
AIs mark a significant advance in document management, making it possible to offload tedious tasks that are often neglected by teams.
AI-based automation offers high levels of performance and paves the way for more efficient document management in real estate.
AI under control
Nevertheless, despite its dazzling advances, AI needs to be controlled. When using artificial intelligence (AI), it is important to set up support services and automated control bodies to avoid errors. Stonal, for example, offers a combination of high-performance machines and human control. When Stonal’s classification algorithms encounter a confidence gap in their ability to classify a document, it is processed by a human to ensure that it is correctly classified. This approach improves machine performance through user corrections. AI classifies and extracts information from documents, offering benefits such as accurate document classification, automated renaming, and using of extracted data. AI makes it possible to do away with the tedious work of classification and document analysis carried out by human teams. For example, to check the presence of specific clauses in contracts, and to save costs on technical diagnostics by automatically checking the validity of documents.
AI and automated document management tools are not in competition with existing systems such as electronic document management systems (EDMS) or document management systems (DMS), but rather complement them. They relieve workers of repetitive tasks and guarantee quality data for property owners and managers.
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