[BC] [PD1-7] Critical Business Functions of a Property Developer

What are the Critical Business Functions of a Property Developer?

A property developer's critical business functions (CBF) are the essential processes that must continue or recover quickly in the event of a disruption to ensure the business's survival and operational continuity. 

Understanding these functions is key to developing effective continuity plans in the context of a business continuity management (BCM) project.

Identify Critical Business Functions

Here are the critical business functions for a property developer:

1. Project Management and Coordination

• Description. Oversees all phases of a property development project, from concept to completion. This includes managing schedules, resources, and personnel across various teams (architects, engineers, contractors).
•  
• Impact of Disrupted. Delays in project timelines, cost overruns, client and investor confidence loss, and potential legal penalties.

2. Financial Management and Funding

• Description. Managing budgets, cash flow, investor relations, and securing project financing. This includes handling loans, payments to contractors, and investor payouts.
• Impact of Disrupted. Inability to meet financial obligations, delay or cancellation of projects, loss of investors, and potential bankruptcy.   

3. Construction Operations

• Description. The on-site construction includes labour management, contractor coordination, materials delivery, and quality control.
• Impact if Disrupted. Project delays, increased costs, safety risks, potential contract breaches, and reputational damage.

4. Supply Chain and Vendor Management

• Description. Ensuring timely delivery of suppliers' construction materials, equipment, and other resources is vital. Coordinating with external vendors, such as contractors and subcontractors, is also critical.
• Impact if Disrupted. Material shortages, project delays, increased costs, and project downtime.

5. Regulatory Compliance and Legal Affairs

• Description: Ensuring compliance with local building codes, environmental regulations, safety standards, and zoning laws, managing legal contracts with clients, contractors, and suppliers.
• Impact if Disrupted: Legal penalties, project shutdowns, lawsuits, and reputational harm.

6. Sales and Marketing

• Description. Marketing property developments to potential buyers, investors, or tenants. This includes managing sales teams, promotional activities, and client relationships.
• Impact if Disrupted. Loss of revenue, inability to secure buyers or tenants, and negative impact on future projects.

    7. Client and Stakeholder Communication

• Description. Maintaining open lines of communication with clients, investors, contractors, and government agencies and ensuring updates on project progress, addressing concerns, and managing expectations.
• Impact if Disrupted. Loss of trust from clients and investors, project confusion, delays, and reputational damage.

8. IT and Communication Systems

• Description. Maintaining operational technology infrastructure, including project management software, communication systems, and data storage and ensuring secure communication and information sharing.
• Impact if Disrupted. Communication breakdowns, loss of project data, inability to manage operations, and delays in decision-making.

9. Health, Safety, and Environmental Management

• Description. Ensure safety protocols and environmental impact regulations are followed on construction sites and manage occupational health and safety of workers.
• Impact if Disrupted. Increased safety risks, legal liabilities, project shutdowns, and reputational damage.

    10. Human Resources Management

• Description. Managing staff recruitment, deployment, and well-being across multiple projects and locations, including project managers, engineers, construction workers, and administrative personnel.
• Impact if Disrupted. Labour shortages, increased absenteeism, low morale, and disruptions in project management.

11. Risk Management

• Description. Identifying, assessing, and mitigating risks related to property development projects. This includes financial, operational, environmental, and reputational risks.
• Impact if Disrupted. Increased vulnerability to financial loss, project delays, and compromised safety protocols.

In a BCM project, the continuity of these critical business functions is prioritised to mitigate risks, ensure swift recovery, and minimise the impact of disruptions such as natural disasters, supply chain failures, financial crises, or IT outages.

Summing Up ...

In BC planning, property developers must focus on critical business functions for their projects' success and long-term sustainability.

Key functions such as project management, financial operations, supply chain coordination, and regulatory compliance are pivotal in ensuring that property development continues smoothly despite potential disruptions. 

If interrupted, these functions can lead to severe project delays, financial loss, and damage to stakeholder relationships. Property developers must understand and safeguard these operations through effective BCM strategies.

Developers can mitigate risks such as natural disasters, supply chain failures, and economic downturns by prioritising these critical functions. In addition to maintaining project timelines and cost control, ensuring legal compliance, effective stakeholder communication, and IT system resilience are central to minimising disruptions.

Implementing BCM in property development reduces vulnerabilities and helps developers build a strong foundation for resilience, ensuring the continuity of operations in an industry highly susceptible to external risks.

A thorough Business Impact Analysis (BIA) will help you determine the critical functions of your organisation's operations. You can allocate resources effectively and ensure business continuity by prioritising these functions.  This chapter introduced the implementation of the business impact analysis (BIA) phase. The detailed implementation steps are in eBook 2.

Understanding Business Continuity Management for Property Developers

More Information About Business Continuity Management Courses

To learn more about the course and schedule, click the buttons below for the BCM-300 Business Continuity Management Implementer [B-3] course and the BCM-5000 Business Continuity Management Expert Implementer [B-5].

	If you have any questions, click to contact us.