Using data to analyze and make better decisions is the basis of competition and growth for businesses in many industries. Within the CRE sector, the pace of leveraging data for strategic advantage is rapidly gaining momentum. There are a number of ways to accelerate and reinforce the use of data and data science to build your strategic advantage.
To successfully drive a strategy for data and analytics excellence, we’ve identified five fundamental elements critical to overcoming barriers and progressing along your transformation journey. This insight explores the fourth fundamental: using data as your strategic advantage.
Four ways to use data as your strategic advantage
1. Start with small use cases
Since ambitious strategic data priorities can take some time to deliver value, start with some small use cases to demonstrate what success will look like – data “quick wins.”
Consider the goals of your data strategy within individual functions and units. Then develop a shortlist of use cases with the greatest potential for impact. For example, a fund that manages properties across a variety of asset types could focus on a region or single asset type, and then use the data strategy to determine why certain properties are outperforming or underperforming.
Using fast, economical ways to add value clearly demonstrates the return on investment from data – which, in turn, helps to gain buy-in for larger data use cases.
2. Build a tech stack to support your data strategy
Achieving the business results you expect from your data strategy requires the right tech stack – the set of technology tools that run applications and projects. To be effective, these technologies must integrate and work together seamlessly.
And it’s helpful to keep in mind that when an organization is in the early adoption stage of a
comprehensive data strategy, use cases and technologies will evolve. A good tech stack needs to be centralized, scalable and flexible, because you are likely to change technologies down the road.
While the potential number and configurations are limitless, legacy systems and new technologies need to be compatible. Determining which tech components are required to reach your goals should be based on your aligned business and data strategies.
For organizations that lack the budget or IT expertise to build a complete tech stack internally, consider allying with a third-party partner. They can make it easier and faster to unlock your data potential with velocity and scale. You gain immediate access to state-of-the-art technology, expertise, training, and technical support.
3. Embrace digital workflow and collaboration tools
Operating a CRE business involves myriad time-consuming, repetitive tasks: building financial models, analyzing documents to complete appraisals, performing due diligence to close deals, assessing asset performance, and producing reports. And so, for many CRE professionals, much of their time is still spent on repetitive tasks – tasks that lend themselves to automation.
Whether in the front or back office, workflow and collaboration technologies now enable individuals to perform their work more efficiently, teams to collaborate more effectively, and business units to share data seamlessly. Workflow automation streamlines time-consuming work and makes complex processes easier to manage.
At the same time, cloud platforms now provide collaboration spaces where data can be shared in a common place rather than having to prepare PDF documents and exchange files via email.
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4. Use data to benchmark your assets
With a growing demand to better understand the actual drivers of risk and return, benchmarking is helping to understand the impacts of key decisions across the investment process, from allocation to execution.
Broad benchmarks provide an overview of the market and are useful for gaining insight into market trends and understanding movements.
Well-defined, consistent property benchmarks enable investors, owners and managers to compare the performance of an asset, portfolio or fund with that of peers. They can also pinpoint the sources of performance outcomes to provide a better understanding of drivers so managers can set meaningful targets.
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Next steps
Ready or not, the strategic use of data is gaining momentum in the CRE sector. By remembering these key points, you will not only keep pace but build on your strategic advantage:
Start with small uses cases to determine how data strategy can explain why certain assets outperform others
In a world where technology is constantly evolving, select tech components that align and evolve with your business and data strategies
Use workflow automation to save time and eliminate repetitive tasks
Implement benchmarking for insight and informed decision-making
By implementing these four steps, you can start to manage your data sources effective and capably.
Authors
Altus Group
Authors
