Towards a decision support tool for real estate management in the health sector using real options and scenario planning

Abstract

Purpose – Uncertainties affecting health organizations inevitably influence real estate decisions since real estate is required to facilitate the primary health process. The purpose of this study is to develop a decision support tool that supports health organisations in defining what flexibility they need in order to develop a flexible real estate strategy and to adapt to future uncertainties. Design/methodology/approach – The research is being conducted from a design science perspective. By addressing the needs of real estate managers in health, research relevance is reached. By applying scientific knowledge when developing the tool, rigor is achieved. Findings – Major elements of the decision support tool developed are real options to describe flexibility and its consequences for corporate real estate management, and the backcasting scenario planning method. Social implications – The application of the tool by health organisations can increase the professionalization of real estate management and improve the match between current and future demand and supply of real estate, adding to the effectiveness and efficiency in healthcare in general. Originality/value – This is the first tool developed using the real options approach that provides real estate managers in health a systematic insight into the various types of flexibility needed for the future