Institutional Real Estate, Inc.

NAREIM Dialogues Spring 2018

The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products

Issue link: http://read.uberflip.com/i/974130

Contents of this Issue

Navigation

Page 26 of 51

I f your company is like many real estate organizations, at the end of every time sensitive analytic or reporting exercise you breathe a big sigh of relief. Through your team's heroics, you were able to extract most of the key information needed out of the excel spreadsheets, pitches, file cabinets and people's heads in time to meet the deadline. Yes, there were some gaps and numbers that didn't tie but you "smooshed" the data and in the end the results looked reasonable and supportable. You know there has to be a better way yet the cycle repeats itself. Unfortunately, there is no "easy button" and the road to a data driven organization is littered with tales of delays, budget overruns or outright abandonment. Fear not! Success is possible by starting simply, building confidence with early accomplishments, iterating quickly and staying in touch with the business as you build your capabilities. WHAT HAPPENED TO THE GPS? While there are many reasons that a data initiative can fall short of expectations, experience has taught me that the number one reason is the lack of a clear business purpose and ownership. Without clear focus, ownership and prioritization these projects can quickly become "boil the ocean" exercises, taking on too much all at once. This results in projects that take too long, often don't meet expectations, and are prone to cost overruns. Watch out for scope creep, expectations of "build it and they will come" and projects that go for extended periods without showing results to the business. All these are signs that you could be getting off track. STAYING OUT OF A DITCH Based on experience it is best to start simple with a well-defined output that you would like to reproduce – the complexity will come soon enough. If you can't accurately deliver the basics, you risk losing credibility and won't make it to more challenging, and valuable, analytics. In a recent project, after several false starts building a data warehouse, a debt and equity investor restarted the project by focusing on duplicating a very simple report describing its portfolio. This report contained 32 core points of information about its investments – things like type of investment (debt/equity), position in the capital stack, exposure, type of property, location, etc. Even with this narrow, seemingly simple, scope, key strategic decisions that lay the foundation going forward needed to be made. Consider address information for a debt portfolio – much focus is placed on the "Obligor" but when Hurricane Katrina was bearing down on New Orleans was it more important to know that the Obligor was safely in New York or Chicago or rather that the collateral was located on Canal Street? If you frequently make investments in portfolios of properties are you ok with the locations or property types being identified as mixed, various? What if you have multiple investments in a property – how do you allocate exposure and avoid duplicating value? As I said, complexity starts to come quickly. Once you have identified that initial data set, the next step is to agree with all interested parties on the definition and "source of truth" for each data element. Ideally, there is only one but if your organization has independent business units or distributed information there could be many. At this point you start laying the roadbed by building a repeatable process for bringing the data together from the source(s) of truth into a single repository, whether excel or a data warehouse. This is followed by a test drive including reviewing the data for completeness, consistency, acceptable ranges of values, conducting spot audits and/ or comparisons to existing reporting to ensure that the attributes tie to verified sources. Correct the data at the source and keep re-pulling it until the alignment is right. Don't be surprised if multiple iterations of this step are required. Only once you have signoff from both the data providers and consumers are you ready to bring on the broader organization as passengers. This process is then repeated for each additional phase or enhancement. NAREIM DIALOGUES SPRING 2018 25 ©iStock.com/gremlin

Articles in this issue

view archives of Institutional Real Estate, Inc. - NAREIM Dialogues Spring 2018