3 Steps For Real Estate To Harness Data-Driven Transformation
By Marco Hofmann, Head of LoB Real Estate, SAP
Digital transformation has been on the lips of most leaders the past few years, with achieving full data visibility the goal. This emphasis on making the digital transformation leap has revealed not only the vast amounts of data that exist within an enterprise, but also the expansive data fragmentation plaguing enterprises seeking to transform. But good news, the challenges of harnessing valuable data to make better decisions are being solved, with the real estate sector poised to immediately benefit.
Coming in at First Place
The ability to make fast, data-driven decisions is powerful. Taking that one step further is the ability to make decisions based on interwoven data sources. “The leap of combining IT, operations data and customer data empowers users with actual trends and benchmarks,” said James O’Reilly, VP Global Real Estate, Honeywell. “This is a vast opportunity in improved effectiveness for cost constrained teams.”
Additionally, a Bain study revealed companies leveraging analytics outperform their competition by up to 5x, particularly in making effective decisions “faster.”
While most companies are actively working to become data-driven, how can they overcome the challenges posed by data silos and fragmented environments, which result in loss of insight and ultimately cost inefficiency?
First, one needs to understand the capabilities of your legacy data systems and how they compare against industry benchmarks. Real estate owners and operators often struggle with tech stacks that are overly-complicated and require multiple log-ins.
Forrester’s research revealed that an estimated 73 percent of company data is never analyzed. If you can migrate and/or build a relationship with a single platform partner to ingest all data, you drive towards data consistency and more reliable outcomes. If a single platform is not an option, new partnerships, like the one between SAP and Honeywell, are making it possible to combine data from various vendor back-end systems into a single integrated view.
As an example, SAP and Honeywell have recently launched a cloud-based solution that streamlines and combines operational and business data for building owners and managers to support better decision-making, drive greater efficiencies and reach sustainability goals. The new solution extends the capabilities of both Honeywell Forge enterprise performance management software and SAP’s Business Technology Platform into a single view.
If you’re a start-up or an enterprise launching a market-disruptive product, winning is often done by speed, not omnipotence. Jeff Bezos asks “Is it a one-way door or a two-way door” in terms of decisions, with one-way doors being decisions you can’t take back. For those that can be taken back: decide, implement, evaluate and modify if necessary. However, for one-way doors, like lease cancellations, leveraging as much data as possible helps ensure you make the right decision
Sharing is Caring
Technology alone is not enough to fully eliminate data fragmentation. The second part of the equation is a data-driven culture of ownership. An executive survey discovered 69 percent of business executives are not focused on fostering data-driven cultures. Executives need to start this cultural transformation, harness the wealth of data in their systems, and strategically plan to continuously improve their uses of data for tomorrow.
While a single lead (e.g. CDO, CIO, etc.) may steer this data-driven transformation, success requires an army of ambassadors and champions – both top down and bottom up – to be truly effective. For Corporate Real Estate, making use of necessary data requires a convergence of information technology (IT) and operational technology (OT) data to tackle not just functional silos, but also technical ones.
Several enterprise customers I’ve worked with in the past have allowed business or functional leaders to determine technology purchases for their fiefdoms, resulting in complicated technical environments and many legacy systems that don’t easily integrate or communicate. Companies are starting to overcome this with steering committees and/or buying decision team requirements that provide checks and balances.
Honeywell Forge Real Estate Operations is one application that combines IT and OT data across building assets, financials, sustainability metrics and occupant feedback to provide the COO, the CFO, the CSO and others easy to use data, interconnected across functions through a single dashboard. This helps various stakeholders from the boiler room to the board room leverage the same data source for shared accountability in aligned decisions.
The Grass is Greener
Beyond breaking down data silos for improved top line decisions, data today also must improve green line decisions. Our culture is evolving to a triple bottom line status quo. Honeywell recently announced its commitment to be carbon neutral by 2035. For a traditionally industrial company, this is not possible without clear data visibility and governance. The currency of understanding carbon emissions and carbon emission offsets is becoming just as important as understanding the service availability or uptime of your IT and OT assets. For real estate investments this is notable for three reasons:
1. Public recognition of company ESG initiatives influencing buying behaviors, occupant dwelling decisions and media coverage
3. Climate change risks are increasing. One study predicts infrastructure costs may rise as much at 25 percent due to climate change alone. The ability to view your both your energy and CO2 metrics real-time against baselines as well as your full building portfolio puts you in the best position to mitigate such risks and proactively reduce consumption
Make Your Move
CEO’s, CFO’s, portfolio managers, and other leaders are making massive investments to right-size their footprint. This requires comprehensive data insights to deliver higher quality experience at lower costs while achieving sustainability goals. Now is the time to determine the right integrated application strategy to unleash the full potential of your buildings and workforce.