For real estate companies to become "data-driven," it will take nothing less than a transformation. And by "planning in reverse" in my headline, what I mean is that you must begin by defining what you aim to achieve. Then, you can work backward to determine the insights you'll need to reach those goals and the data sets that will bring them to light.
Remember, data is only an enabler. By answering the question "What do we need to know from our data?" up front, real estate organizations can embed the skills, strategies, and technologies to ensure they're collecting the right data from the right sources and putting it to work effectively.
Many Canadian firms are already on this path. In my last post, I talked about some of the results of KPMG's most recent update to our annual global real estate data survey. From Canadian respondents (not discussed outright in the main report), we learned that 42 per cent of them are making a coordinated effort to collect, manage and analyse data throughout their organizations. They're doing the legwork to determine the "why" behind becoming a data-driven organization before laying out the "how."
Their approaches may vary, but organizations making the best use of that data are those who are:
- Sourcing accurate, relevant and timely data from reliable and curated sources.
- Using data to manage their properties more effectively (e.g., predictive maintenance, streamlining processes, tenant retention strategies).
- Using data collection technologies (e.g., sensors, Internet of Things (IoT) systems, real-time monitoring) to inform smarter energy strategies.
- Leveraging market/industry data to inform market investments and transactions.
- Benchmarking their assets against similar portfolios and competition.
- Exploring ways data can be used to enhance the tenant experience (where applicable).
These are all tell-tale signs that an organization is committed to becoming a data-driven organization for the long haul. The challenge is staying the course.
Effective data strategies rely on accurate and up-to-the-moment data sources, few of which are created equal. Each source has various requirements (e.g., governance, security) and may differ in terms of priority and accessibility.
To that end, organizations must do their due diligence when selecting their sources. This requires sifting through the massive volumes of data in their possession, pinpointing what will yield the most critical insights, and then building a data strategy and architecture with those data-harvesting outcomes in mind.
Canadian real estate organizations have access to numerous reliable data pools. They include public sector repositories (e.g., Statistics Canada, Ministry databases, census information), public repositories (e.g., Google Public Data Explorer, World Health Organization) and multiple online private sector resources. Whichever data resources an organization chooses to use, it's important they be well-curated and updated regularly, so that the decisions they inform are based on the most relevant information.
Data isn't meant to live in silos. It's not intended for IT departments alone. For data to serve its intended purpose, it needs to be shared and integrated throughout the organization to provide solid guidance for all facets of your business.
It's important for anybody making key decisions in a real estate organization to have easy and secure access to organizational data (e.g., the "data lake"), no matter its point of origin. And yet, with only 12 per cent of Canadian respondents saying all their teams have access to their organization's data pools, there is room for real estate companies to improve in this area.
Likewise, the fact that 70 per cent of Canadian firms do not currently intend to share their data with tenants to improve the tenant experience signals missed opportunities. True, real estate organizations must be diligent in how (and with whom) they share their information, but it benefits them to explore ways in which sharing data can enhance tenant safety, satisfaction and retention. After all, anything that can be done to make building owners, managers and occupants more successful is worth considering.
More than machines
Becoming a data-driven organization is not simply about having smarter machines and systems. It's about having the people who can identify the right data tools and use them effectively within your business. Herein lies an opportunity to upskill real estate professionals to take full advantage of their organizations' data, particularly given that only a third (35 per cent) of Canadian organizations say their employees have the required knowledge to take advantage of the data lake. And with only 3 per cent of organizations employing data scientists to bridge the gaps, there is equal value in recruiting more data specialists who can keep your data strategy alive.
Remember, a data strategy is never static. It requires assessing and managing workforce capabilities on a continued basis to gain the insights you'll need to retrain, replace or re-skill your people accordingly.
Ultimately, launching a data strategy is an investment of time, talent and resources. As Confucius said: "The man who moves a mountain begins by carrying away small stones." In other words, begin by breaking down your plan into manageable pieces and working your way toward smaller achievements.
Actioning and enacting a broad end-to-end data strategy can take years; without seeing the fruits of your labour in the short-term, it's easy to veer off course. That's why it's important to use data to create incremental value for your business, motivating your people to be passionate about data, ensuring your leaders keep desired outcomes in full view, and consistently making the connection between insights and business results.