When it comes to real estate asset management, many organizations use data reactively to solve business issues, increasing business risk exposure. After developing a capital plan, they use analytics to track performance or improve upon it in the future. This mindset can affect the structure of reports, as key performance indicators (KPIs) tend to look back towards a set number of metrics.
While this approach is useful in tracking performance, it also forces organizations to make key business decisions using a reactive mindset. These metrics therefore limit performance optimization, have increased business risk and position an organization to be reactive rather than proactive in how it deals with failures in its facilities and its assets.
A Penchant for Reactive Data Analytics
For real estate owners and managers, a reactive approach to data analysis can dictate how they approach capital planning and asset management. For example, elevators within a portfolio rarely fail or need repairs at exactly the same time. In spite of this, many facilities owners structure their capital plans as if they do. As such, they assume the same repair and replacement schedules for all elevators, regardless of location-specific differences or differing manufacturers and types. It is only when something breaks or starts to fail that these capital plans change and owners adjust their investments. There are major business risks associated with waiting for that elevator to fail in performance from service shutdown to major catastrophic failure resulting in death. That is risky business!
Additionally, many organizations still use paper records or disparate databases to track maintenance schedules for elevators and other key building components. This approach forces facility managers to operate without the insights provided by proactive data analysis and have data records readily available onsite or offsite and available to service contractors.
Moving to Proactive & Preventative Analytics
Real estate organizations are moving away from reactive to proactive and preventative analytics in capital planning, together with maintenance plans, with the help of new, more comprehensive integrated software. Predictive and preventative analytics differ from reactive analytics in the sense that they let software determine key metrics, trends and data relationships from a performance and capital optimization standpoint, rather than simply waiting for something to break.
Imagine that the manager of a large office building was able to track certain metrics in detail—such as occupant density by floor, section-by-section building energy consumption and lobby entry patterns. They could then relate those metrics to other data points—such as elevator use and detailed maintenance schedule records—to develop a more accurate capital plan and reduce business risks associated with failures.
To paint an example of this in practice, Liftinzicht, a Dutch software company associated with a lift consultancy company, addressed the issue of elevator maintenance themselves. After determining that elevator maintenance was based around time rather than usage, Liftinzicht added sensors to each one in order to understand its usage in real time. Through this, the company determined the elevators did not actually require the level of maintenance they had been receiving. This enabled Liftinzicht to not only reduce the number of elevator failures, but also reduce their maintenance costs by 30% per year.
Proactive & Preventative Analytics: Building the Platform for Your Team
Here at 4tell Solutions™, we advocate for proactive and preventative planning approaches. However, the move to a proactive data platform is not as simple as buying capital planning software and flipping the switch. While today’s software programs are simple to use, there are a number of platform considerations organizations must take:
- Internet of Things technology: Is the building “wired” to emit real-time data for key building components? The more data points feeding into capital planning software, the better.
- Master Data Management: MDM is an overarching term describing the processes, governance and tools required to build a central data source. For capital planning, a central data repository is critical for advanced analytics. This includes data on maintenance, a history of capital repairs and replacements and other facility information.
- Resources: With all the focus on emerging technologies, many organizations do not invest adequately into their staffing and changing roles including data governance. As technologies improve, organizations must have the right training and talent to use it effectively. In real estate, this often means having building operators and property managers with experience in data analysis.
It’s time for organizations to take a big picture perspective when it comes to the management of their facilities. Companies need to consider the fall out from a facility’s failures before these failures actually occur to ensure regular maintenance issues do not become overwhelming fiascos. In this way, it is better to be preventative—even overly cautious—than to endure numerous breakages all at once and without a plan in place to deal with them.
For more information on how you can build your own proactive capital investment platform, please contact us or see our host of products.
Photo Credits: Shutterstock / Dmitry Kalinovsky