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.
You must be a registered Realcomm | IBcon conference attendee in order to attend the Forum. Space is limited, so once you are registered for the conference, please RSVP to: Cheri Parr | Phone: 310-421-4362 | email@example.com
UPCOMING REALCOMM WEBINARS
CRE Tech Innovation Showcase - Uncovering the Next Generation of New Ideas - 7/12/2018
Never before in the history of the Commercial Real Estate market has technology been so prevalent. Since 2009, hundreds—if not thousands—of companies selling tech to the Commercial Real Estate Industry have emerged. Estimates now suggest there are more than 2,000 new CRE Tech companies in the space. The sheer number of new companies makes it almost impossible to keep up and organizations are struggling to establish an effective process to discover, organize, vet, test and implement new technologies. This webinar will evaluate the categories of technologies, best practice criteria, and clarify different solutions that are making their way to the top of the list.
Tom Shircliff is a co-founder and principal of Intelligent Buildings, a nationally recognized smart real estate professional services company that was started in 2004. Intelligent Buildings provides planning and implementation of next generation strategy for new buildings, existing portfolios and urban communities. Tom is a speaker and collaborator with numerous universities and national laboratories, a gubernatorial appointee for energy strategy and policy and founding Chairman of Envision Charlotte, a Clinton Global Initiative.
Chip Pierpont manages and provides expert guidance on the development and execution of requirements/solutions for building operations and technologies for General Services Administration (GSA), a Public Buildings Service (PBS) government agency tasked with managing government buildings and real estate, providing product and service procurement support, and developing policies and regulations. The landlord for the civilian federal government, PBS owns or leases 8,700 assets, maintains an inventory of more than 370 million square feet of workspace for 1.1 million federal employees, and preserves more than 481 historic properties.