In an era of the Internet of Things, companies that have the right IT architecture and infrastructure, and the right talent, capable of both handling fast-moving technologies and finding meaning in big data, will be able to leapfrog their competitors.
The Harvard Business Review stated recently that companies that are among the top third in their industry for data-driven decision-making are, on average, 5% more productive and 6% more profitable than their competitors.
Using data to revolutionize and transform businesses, while generating additional profits is already a reality in many industries. While the real estate sector may be a little slow to the game, compared with our counterparts in the financial services industry, we have caught up quickly in recent years.
However, data analytics is reliant on access to data, the quality of data and connectivity. This has presented a challenge in the fast-moving markets of South-East Asia. For example, a lack of robust IT architecture that can adapt to changes in the landscape in an efficient manner means that available data is not always current. The speed and scale of construction and infrastructure development – in Indonesia and the Philippines, for instance – means that satellite maps are continually out of date.
Compounding the problem is that data is not always publicly available due to the region’s relatively low transparency, although some countries, such as Singapore, have been making moves to improve data transparency. Security concerns about data protection are also a major obstacle preventing companies from taking full advantage of their data. This isn’t unique to real estate – it is an issue faced across many sectors.
Companies are finding it difficult to identify the right data and determine how best to use it. Establishing data-related business cases often means thinking outside the box and looking for revenue models that are very different from the traditional business.
When we look to corporate real estate (CRE), there are significant opportunities to achieve competitive advantage by understanding and responding more quickly to changes that impact business operations.
Predictive analytics tools can be used to create effective real estate strategies by combining disparate factors, such as lease expirations, projected capital investments, and macro-economics to validate strategic location, investment, acquisition and disposition recommendations. This has real implications for business productivity, attracting and retaining talent and bottom-line performance.
While many CRE professionals have embraced big data, there is still a disparity between aspiration and reality. According to a new Forrester Consulting study commissioned by JLL, there is a lack of proficiency in crucial areas such as data governance, securing specialized analytics talent and in establishing key performance indicators for using data and analytics. Today, most CRE teams use their platforms primarily to uncover insights about the past.
Talent is key
A key area of investment required is in the acquisition and retention of talent. While there is no shortage of data and analytics skills in South-East Asia, there a limited number working in CRE and employee churn rates in this field are high. At the same time, very few CRE professionals are capable of understanding, embracing and using data to accomplish financial and operational goals. Companies that are able address these skills challenges head-on will have a clear advantage over their competitors.
Author: Jeremy Sheldon, Managing Director of Markets and Head of Integrated Portfolio Services Asia Pacific, JLL, Hong Kong SAR