Data is key in every department of your firm – it’s how you develop strategies, optimize the business, identify new opportunities, and make major decisions. But by now, we have all heard the stat about how 9 out of 10 spreadsheets contains at least one error and how Excel has been the root cause of several infamous accounting scandals. Further, a recent survey from Trintech found that 40% of finance leaders don’t trust that their financials are accurate. When data is so critical, why is it that 2/3 of firms are still using spreadsheets instead of software as their main tool for data analysis and reporting, and why have we accepted the risk of misinformation for so long? Perhaps now is the time to consider that accurate data and regular reporting can be a competitive advantage for your commercial real estate (CRE) firm and one that’s worth investing in.
Why Reporting is Important
Monitoring your performance will produce key learnings, help you to keep a pulse on portfolio performance, and offer proactive next steps that can inform your business decisions and improve transparency with your stakeholders. However, the challenge of having large volumes of disparate data means that many firms rely on quarterly or even less frequent reporting. That type of reporting strategy could equate to missed opportunities, lost revenue, poor productivity, or dependence on heuristic decision-making. Consider how confident you feel in answering questions such as the following:
- Are there areas of the business that you could and should have been optimizing?
- How effectively did you manage issues that arose? Did you ever find yourself unprepared?
- Were you able to respond quickly and impactfully to internal and external forces?
- Were there expenses that could have been reduced?
- What trends, opportunities, and weaknesses are impacting your business, and how?
- Do you understand what your data is telling you and how to use it within the business?
As we continue to navigate the impacts of the pandemic, your stakeholders will also want the assurance that you are able to effectively manage change and navigate shifts in the market. Regular reports will provide a snapshot of the state of business while addressing any increased scrutiny you are experiencing.
How CRE Tech Can Improve Trust in Data
At any given point, you and your business are producing vast amounts of data. It’s simply not possible to quickly and effectively analyze that volume of information by hand or even with programs such as Excel. Static spreadsheets aren’t robust enough to break down data silos, tackle the increasing complexities of reporting, and provide a true picture of what’s going on in your portfolio. Having to rely on manual and error-prone processes is also often cited as a source of distrust in the data.
Further, a recent Accenture report found that 68% of finance leaders indicate real-time finance operations will enable them to face business uncertainty with confidence, but only 16% feel presently equipped to access real-time insights. As Accenture says, “If recent history has taught us anything, it’s that businesses that thrive in an unpredictable environment do so by being agile and swiftly adapting to change.” Enter CRE technology – solutions developed specifically for the commercial real estate industry to digitize, optimize, and otherwise transform business operations.
An asset management software such as Lobby CRE greatly improves visibility into your data and quickly generates actionable key learnings to drive favorable business outcomes. First, Lobby collects data from hundreds of data sources and third-party systems (ex: property and lease management systems. valuation and forecasting tools, CRM, etc.) and compiles it in a single location. The tool can then be used to build out a variety of advanced analytics, robust configurable reporting, and informative insights at both the macro and micro levels. Additional benefits include the following:
Improving accuracy: CRE involves a lot of complex data. You need to have confidence that the numbers input and the analytics performed are correct. After all, you don’t want to make strategic business decisions based on misinformation. With automated data analysis and reporting, the technology does the heavy lifting for you while mitigating any risk.
Efficiently distributing data: You also need a way to quickly and easily distribute the data and get the right reports to the right people. A cloud-based solution like Lobby enables you to maintain a single source of truth but share the metrics that matter with appropriate team members. Each team can dive deeper into the data for more details or tailor the info for relevance.
What to Consider in Your Reporting
Your portfolio contains a trove of data – how do you discern what is the most important information for yourself, your firm, and your stakeholders? Below are some metrics and data points you may want to monitor:
- Income, expenses, and profits incurred over a specific time-period.
- Operating, investing, and financing activities that occurred during the selected time-period, as well as budget % variance.
- Unit / tenant metrics, such as occupancy, vacancy, and delinquency of your properties. KPIs about tenants are especially a hot topic this year. The National Low Income Housing Coalition found that COVID-19 put 30-40 million people at risk for eviction. How have these renter struggles impacted your portfolio?
- Benchmarks against historical performance.
When thinking about useful information for your firm, you may also want to consider insights such as observed trends in the portfolio, how and why key metrics changed, anticipated risks in the portfolio and how you plan to address them moving forward, and potential opportunities in the months ahead. With these types of insights at your fingertips, you can make the transition from simply tracking numbers to creating value for the organization.
Regular reporting is important to effectively manage your portfolio and properties. The insights generated can be critical in learning from your historical data, monitoring current performance, modeling future scenarios, and making informed strategic business decisions for the business. Fortunately, leveraging CRE technology can greatly reduce the amount of time it takes to generate these reports while boosting your credibility and increasing your confidence (and that of your stakeholders) in the data.
See Lobby CRE in action to learn how a single source of truth can drive data confidence.