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A recent survey of 140 companies in the property management industry found that they lose an average of $8.2 million annually due to faulty data; a startling and unsettling discovery.
Much of this extraordinary shortfall, according to the survey, is centered in lost productivity among workers who, realizing their data is incorrect, are forced to compensate for the inaccuracies with time- and energy-consuming workarounds.
The Issue
In the private equity real estate sector, the issue of data quality is particularly acute. Important information such as tenant exposure analyses, occupancy reports and portfolio-wide lease expiration schedules contain an abundance of personal details whose to-the-letter accuracy is critical to their effective application. But these documents are hard to come by and are often manually produced.
Further, most property managers still prepare their information on an annual – or, at best, a quarterly – basis. But rapidly changing market conditions very quickly render these reports outdated and irrelevant, leaving the company in the dark for a significant portion of the year.
More than that, much of the data is put together without the benefit of organizational guidelines that are designed to ensure consistency. In the absence of such structure, it’s virtually impossible for anyone with an interest to accurately consolidate the information, to slice and dice it for analysis purposes or to search across multiple reports.
The solution to this unsatisfying scene rests in the marriage of people and process, with technology the officiating enabler.
Companies that are looking to stay ahead of the competition should consider the following:
Getting on the Same Page
Many companies are locked into an Excel culture in which workers extract data from internal systems and load them to spreadsheets. From there, individuals conduct calculations and perform analyses that are never shared companywide. This produces multiple and oftentimes competing roadmaps. The confusion and potential risk that result from such an approach are legion.
Creating Standards
Ideally, a company’s data management initiative should aim to create a single version of the truth; in reality, many organizations have not even agreed on the definition of such critical particulars as revenue. They exist inside siloed data-management structures that do little more than support the disparate definitions of their current systems.
Landing on a single version of reality requires, at the least, cross-departmental consensus on how business terms (tenants, lease contracts, lease abstracts, service orders, approval processes, customers, products, KPIs, etc.) are defined. Start with published standards like annual reports and spread the word.
Appointing a Business Data Manager
Effective data management is crucial to a firm’s achievement of strategic and tactical goals. A cross-functional position requiring coordination with various company departments, the business data manager is responsible for the implementation and oversight of the company’s data-management goals, standards, practices, processes and technologies. Pick a soul with both the business experience to understand how data can be utilized within the company and the ability to communicate same with corporate executives and staff.
Investing in a Business Review
Every business process that’s broken, being handled by disparate systems, that’s being performed manually or maybe even not at all, is draining your company of cash.
A business review carried out by 360 Visibility will document your processes and facilitate your informed decision on the changes you need in order to get your data right.
Property managers must take a leadership role in this initiative. Only with their full engagement and commitment to cultural change will an investment in data management realize its full potential within their firms.