The End-to-End Business Process as a Unit of Analysis for Innovative Development: Localizing Efficiency Losses in Real Estate Development

Abstract

The relevance of the article stems from a growing gap between the volume of digital-technology investment made by real-estate development companies and the economic efficiency gains these investments actually deliver. The identified contradiction is that traditional functional management-accounting systems register individual departments' indicators as satisfactory even when aggregate efficiency losses accumulate precisely at cross-functional interfaces - in the handover from design to construction, from construction to sales, from sales to after-sales service. Functional optics is structurally unsuited to detecting such losses, since it measures departmental activity rather than the movement of value toward the customer. The purpose of the article is to substantiate the cross-functional business process as an adequate unit of analysis for the innovative development of a development company and to demonstrate how shifting the analytical lens from functional to cross-functional makes it possible to localize, quantify and prioritize the elimination of efficiency losses. The scientific novelty lies in a methodical approach comparing the functional and process-based projections of losses across five cross-functional processes of a developer. Systemic, process-based and comparative analysis methods are used, together with a synthesis of empirical industry data. The practical significance of the results lies in their applicability by development companies for prioritizing digital initiatives and redesigning management-accounting and KPI systems.