All That Data Isn’t Improving Your-Decision Making. Here’s What Will.
Stick around long enough at a conference and you’ll hear someone talking about how to make big data small. I agree with the sentiment, but the statement still implies a focus on the bulk of data you can amass rather than the decisions you need to make, and how the data might provide insight to inform those decisions. Many executives still rely on manually intensive analysis in Excel and/or scrap paper – even when dashboards and advanced analytics are available.
This often happens because the design of the tools focuses on the amount and type of data available, rather than on the relationships within the data and how they relate to real world decisions. The promised benefits of big data still aren’t being fulfilled, mostly because data is not enough, no matter how big it gets.
Left to their own devices, information visualization designers are likely to have tunnel vision; excited so much by what can be measured but losing sight of what should be measured. So much data is now available that the ‘what’ and ‘how’ of visualization are practically unlimited. What can be missed is the ‘why’ – if you start there, working backwards into the datasets based on the decisions you need to make, you’ll find in most circumstances a set of five or fewer key metrics tailored to your specific decision-making will yield the most practical value.
However, picking the right Key Performance Indicator (KPI) is easier said than done. Asking your staff or facility management provider to show you every stat they can pull is a faster, simpler decision to make. The most commonly selected KPIs for facility management in commercial and corporate real estate fall into five categories:
- Financial Performance: This varies based on company structure and business model, but it comes down to the dollars and cents: forecasted vs. realized revenue for a given period, capital spend vs. budget, year-to-date non-budgeted expenses, etc. For this type of KPI, it’s critical to identify a benchmark or point of comparison. $1 million in monthly expenses may look normal if you can’t see that operating expenses for the same period last year were only $500,000.
- Operations: This type of KPI should let you see at a glance if your day-to-day operational performance is where it needs to be. Common examples in this category are completion percentages for work orders (overall, by priority, vendor, etc.), scheduled inspections and preventive maintenance during a specific time range.
- Strategic Impact: I haven’t mentioned goals or objectives yet; they come into play here. This category is about understanding how well facility or property management is aligned with the strategic direction of the company. If cost reductions are a major focus, how are you helping to achieve that goal? Green initiatives are often included under this heading too.
- Customer Satisfaction: For commercial real estate companies, this revolves around tenant satisfaction and retention. Corporate real estate is being held to very similar standards for employee satisfaction, retention and the ability to use space to attract talent. There are different ways to measure satisfaction, from happiness with the completion of a specific work order to average lifetime value of a tenant.
- Value-Add: How are you going above and beyond what’s expected? Lately, we’ve seen clients using this type of KPI to assess how processes and technology are resulting in time, labor or cost savings.
For your team in the field, this means getting proactive notifications at the most granular level. For example, getting text or email notifications when high priority work orders or work orders of a specific type aren’t completed within a certain time range. For tenant coordinators, they don’t need to know about every work order satisfaction survey that’s completed, but they should know when survey scores are below an acceptable range so they can proactively reach out to those tenants.
Once you have determined the right KPIs to keep you on track, you can begin to work on individual areas of your business which have improvement potential. And, now that you are monitoring your KPIs on an ongoing basis, you can measure the effect of targeted process improvements on those KPIs in real time – making smart, informed decision making much easier.
This Week’s Sponsor
AwareManager provides facility management solutions for the world’s most recognized facilities and organizations, including world-class commercial and residential property portfolio management firms, corporations, sports organizations and hospitals nationwide. Visit www.awaremanager.com.
Join Us for the CRE Industry's Most Important Cybersecurity Event on June 13!
Over the past decade, weaponized code delivered by malicious actors has evolved to be one of the greatest threats to our country’s welfare and economy. Cybercrime affects everyone, from individuals to enterprises to government. It was inevitable that cyber threats would eventually find vulnerable commercial real estate targets, both at the enterprise as well as building infrastructure level. To make matters worse, the threat of breaches increases as IoT becomes more integrated into our commercial real estate assets and our daily activities.
This Forum will bring together industry thought leaders to address the most impactful cyber threats, leveraging experience and knowledge to set benchmarks for cybersecurity strategy.
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UPCOMING REALCOMM WEBINARS
Commercial Real Estate Information Management - Best Practice Showcase - 5/10/2018
Years ago, the choices were much simpler. Property Management, Accounting and Email were all you needed to run a Commercial Real Estate organization. Fast forward to today and the complexity of the industry’s information management requirements have grown exponentially. Single stack, integrated best-of-breed, and open ecosystems are all options under consideration. Databases, warehouses and now lakes, as well as new technologies such as AI, Machine Learning and Blockchain all add to the growing complexity of real estate information management strategy. Additionally, there are thousands of new companies that want to be part of the solution. Join the debate as best practices are uncovered.
Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.
Sam Wong is Head of Analytics and Data Science at QuadReal. He has over 15 years of experience in Analytics and has worked within numerous industries with a wide range in technologies. Sam is a featured speaker on Data Science and Analytics, most recently he spoke at the 2018 Gartner Data and Analytics Summit and at IBM THINK 2018.
Chong P. Huan is Executive Vice President and Chief Information Officer at Inland Real Estate Group. Chong has over 22 years experience and a Proven track record in aligning business with vision and IT strategies to achieve efficient and cost-effective IT organizations. Diverse expertise in financial products and services, order and portfolio management, risk management, securities trading, processing, research and operations with IT acumen to achieve growth and enhance shareholder value.
Brian Zrimsek is Industry Principal at MRI Software. Brian brings 25 years of large scale enterprise software experience to MRI, most recently as an IT Vice President at the Irvine Company. With over a decade of experience in real estate technology he has become a well-known subject matter expert, industry panelist, and trusted advisor, especially within the multifamily real estate market.
Abhinav (Abe) is an experienced investment, financial, technology, business development and operations strategist. He is currently the Chief Revenue Officer for LEVERTON. Abe has worked with many law firms and institutions over the years and has a deep understanding of the real estate technology / CREtech / PropTech space. With LEVERTON, Abe is revolutionizing how corporations use artificial intelligence based machine and deep learning algorithms for data extraction.
Alex Stanton has over 20 years working with in the real estate application space. Currently as VP of Solution Consulting for Yardi Systems, he leads the solution presales team, who work with customers and prospects to explore how to address business needs. Alex’s recent areas of focus has been to work with clients on the real estate specific applications of cloud, mobile, 'big data' and energy.
Jeff Thompson is co-founder and CEO of AwareManager. He leads the company's commercial and corporate real estate clients’ most complex projects. By combining his industry and IT expertise, Jeff helps organizations get data models set up correctly from the very start and helps them overcome major hurdles to user adoption, data-driven decision-making and stakeholder engagement.