- Missed renewals can typically see 20%-30% increase in rents
- Ensuring people have the right skills can help to improve data quality
- Ideally, data should only be entered once
Data seems a double edged sword – a blessing if understood, but a costly financial and time burden if not. As a business grows, keeping tabs on all the necessary information becomes more complicated – and more important.
JLL’s new Garbage In, Garbage Out: The Importance of Data Governance report found that real estate represents the second largest cost for most organisations after staffing costs. It came as no surprise then that better management of real estate can lead to welcome efficiencies.
A substantial cost
In one example, the JLL report noted if one forgets to renew a lease well ahead of time because the information couldn’t be found, a new and last minute contract could see rents up millions of dollars. JLL said a single missed lease renewal typically results in a 20% to 30% increase in rental rates.
In other examples, the report highlighted how long-term solutions are important:
“Often, companies go through the time and expense of cleaning up data and neglect to address ongoing data governance.”
Garbage In, Garbage Out: The Importance of Data Governance, JLL
Due to this neglect, data quality issues undermine the system.
Four issues leading to bad data
The four issues highlighted in the report are:
- Process,
- Technology
- Employee skills, and
- Governance
Process may include things like ineffective procedures such as re-keying of data.
Technology is more multifaceted, but one key takeaway was to take note of the move towards integrated workplace management systems.
“A key principle in data quality is that any information should be entered only once, and IWMS solutions generally follow this practice.”
While it may seem obvious, ensuring people have the right and relevant knowledge is another piece of the puzzle. Without the right skills, data entry or errors may not be picked up throughout the process.
Finally, the report recommends that there are “data stewards” or people who are responsible for data within each functional domain of CRE. Together, they can establish quality control procedures, audits, and more.
JLL’s Head of Sales, Work Dynamics, Nick Moore said, “Some organisations do not trust the quality of data in their system. They’re not sure about the timeliness and accuracy of their data, even though for most non-manufacturing companies in Australia data systems are their second largest cost after payroll.
“As property managers, we hear a lot of exasperated complaints about ‘useless reports’ and ‘why can’t there just be one version of the truth?’
“With a tidy, well-integrated data system, created by a specialist and then managed by ‘data stewards’ among your staff, efficiencies will happen, money will be saved and a lot of these headaches will disappear.”
Mr Moore suggested a four point plan:
- Start with a review of business processes and try to identify gaps in data.
- Check reports and screen queries for errors. If none is found initially, work backwards to trace the origin of the data.
- Improve your employees’ skills. Not everyone is a data-entry wizard. Also, it can be hard for employees to know the significance of certain data if they can’t see the whole picture. Clear context can help prevent inconsistencies.
- Good data governance: For each of the functional domains of your business, identify an employee who can serve as a data steward, responsible for reviewing and managing data to a high quality standard and arranging regular audits.
Information is a company’s intangible wealth, so keep it clean and treat it like gold.
