- Missed renewals can typically result in a 20% to 30% increase in rents
- Ensuring people have the right skills can help improve data quality
- Ideally, data should only be entered once
Data seems like a double-edged sword – a blessing if understood, but a costly burden in terms of time and money 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 is the second largest cost for most organizations after staffing costs. So it’s no surprise that better real estate management can lead to welcome efficiencies.
A significant cost
In one example, the JLL report noted that if one forgets to renew a lease well in advance because the information could not be found, a last-minute new contract could see rents increase by 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 the importance of long-term solutions:
“Often times, companies spend time and expense cleaning up data and neglect to address ongoing data governance.”
Garbage In, Garbage Out: The Importance of Data Governance, JLL
Due to this negligence, data quality issues plague the system.
Four problems leading to bad data
The four issues highlighted in the report are:
- Employee skills, and
The process can include things like inefficient procedures such as data re-entry.
Technology is more multifaceted, but one of the key takeaways was to take note of the move towards integrated workplace management systems.
“A key principle of data quality is that any information should only be entered 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 go undetected through the process.
Finally, the report recommends that there be “data stewards” or persons responsible for data within each functional area of CRE. Together they can establish quality control procedures, audits, etc.
JLL Sales Manager, Work Dynamics Nick Moore said, “Some organizations don’t trust the quality of data in their system. They are unsure of the timeliness and accuracy of their data, even though for most non-manufacturing businesses in Australia, data systems are their second biggest cost after payroll.
“As property managers, we hear a lot of exasperated complaints about ‘useless reporting’ and ‘why can’t there be only one version of the truth?’
“With a tidy and well-integrated data system, created by a specialist and then managed by ‘data stewards’ among your staff, efficiency gains will occur, money will be saved and many of those headaches will go away. .”
Mr. Moore suggested a four-point plan:
- Start with a business process review and try to identify data gaps.
- Check reports and screen queries for errors. If none are found initially, go back to trace the origin of the data.
- Improve the skills of your employees. Not everyone is a data entry wizard. Additionally, it can be difficult for employees to know the importance of certain data if they cannot see the big picture. A clear context can help prevent inconsistencies.
- Good data governance: for each of the functional areas of your business, identify an employee who can serve as a data steward, responsible for reviewing and managing data to high quality standards and organizing audits regular.
Information is the intangible wealth of a business, so keep it clean and treat it like gold.