The first year of the COVID-19 pandemic surely tested the Canadian real estate sector's resolve and adaptability. Even now, as 2022 begins, the industry continues to be impacted by many of the same forces. As operations become more connected and complex, and markets harder to maneuver, now is the time for firms to take a renewed look at their data strategy.
The call for "going digital" is clearer than ever. The pandemic created momentum for real estate firms in every category to adopt technologies, talent, and responsive market tools that support remote work and online services. Responding to the changing needs of the market and establishing "smarter" back-office processes has never been more critical to survival.
The good news is that Canada's real estate firms have not been idle. Based on inputs to the 2020 KPMG Global Real Estate Data survey, I can report that a third (32 per cent) of Canadian real estate leaders have accelerated or enhanced their data strategy implementation, with 42 per cent claiming ownership of an active data strategy. (These Canadian-specific results are not overtly discussed in that report, but they were provided to us.) That was an uptick from our 2019 Property Technology study, in which only 28 per cent of Canadian respondents had a data strategy in place and were actively collecting data to inform their operations. Granted, our domestic firms lagged behind the 74 per cent of US respondents who have also embedded a data strategy, but it's evident that Canadian real estate leaders are warming up to the value of investing in clearly defined and enterprise-wide digital game plans.
Beyond the back office
Canadian real estate firms haven't shied away from big data. The difference between now and the industry's pre-pandemic days is that data strategies are expanding beyond an operational focus (e.g., saving energy, finding cost reductions, budgeting) and into customer engagement. Today, firms are wielding data analytics, artificial intelligence (AI), and online technologies to build stronger ties with their virtual partners and customers, as well as to gain greater control over asset operations both within their properties and across their portfolios.
Data strategies are informing front- and back-office transformations across the industry. They include:
- The development of client platforms to create faster, more efficient sales
- Embedding automated back-office systems to manage critical processes more effectively
- Investing in paperless environments (e.g., mobile apps, cloud platforms, collaborative platforms) to keep real estate teams connected and efficient, wherever they're working.
Moreover, firms use data strategies to inform more effective predictive maintenance, more accurate data models, and more reliable growth.
But simply having a data strategy is not enough. As firms expand their digital capabilities, they must do so with defined roles and responsibilities in mind. That said, our 2020 survey reported that only six per cent of data and analytics strategies are "owned" by Chief Information Officers or Chief Technology Officers (39 per cent in the US), and only three per cent of Canadian firms have hired data scientists to unlock full value from that strategy, compared to 44 per cent of real estate firms who are adopting data specialists in the US.
Lacking ownership for data strategies is only one obstacle. For many organizations, their ability to capture and leverage data is also hindered by inadequate systems (29 per cent), disparate systems (26 per cent), lack of resources, poor data quality, and the challenges of consolidating or standardizing data from multiple external sources. Moreover, among the biggest barriers to implementing a data strategy are a lack of buy-in from organizational leaders and a resistance among employees to abandoning outdated habits.
Beginning your strategy
It's a good sign that half of the real estate firms surveyed have a data strategy. However, the fact that our sector lags in embedding the right tools, leaders, and specialists compared to other jurisdictions signals that there are gaps to address. The following are some initial steps organizations can take to develop and execute an effective data strategy:
- Identify who will drive the strategy and ensure that this individual has both the power and the expertise to make meaningful change.
- Ensure the strategy is aligned with your organization's unique goals and priorities, both long- and short-term.
- Define the technologies, infrastructure, processes, and human capital needed to launch and embed the strategy in your organization.
- Lean on frameworks and methodologies to help map out how these critical resources can best be implemented, governed, and wielded to their full potential.
In my next post, I'll look at how real estate companies can "plan in reverse" in order to become truly data-driven.