Dirty data – data that is inaccurate, miscategorized, out-of-date, or conflicting – is exacerbated by inadequate software, siloed processes, and sloppy data governance.
Dirty data is pretty common. We would go so far as to say that wherever there's data, there's going to be some dirty data lurking around.
Where Is Dirty Data Lurking?
Across the lifecycle of a real estate investment, there are plenty of opportunities for miscategorized, inaccurate, and out-of-date data to infiltrate. But if you're looking for a reliable place to uncover dirty data, look no further than at the lease and/or property level. Especially if you manage a large portfolio.
What Are The Business Costs Of Dirty Data
Dirty data doesn't just lurk, though. It actively undermines your business processes, your bottom line, and your reputation.
Dirty data increases risk: Dirty data increases both operational and reputational risk. The former occurs when critical data is accessible to one key person within a given organization. Should that employee leave or be rendered unavailable for any period, you have effectively created a data hostage situation, leaving your assets in the lurch.
The latter would certainly be a by-product of the above scenario – but reputational risk also rises when reporting is inadequate or inaccurate. If your numbers can’t be trusted, who will entrust you with their investments? That leads us to the second disruption...
Dirty data turns off investors: If you present a report to your investors stating that their return will be X, when the actual return is Y, there’s going to be a reckoning. There will probably be some digging into your actual numbers and your processes. And, depending on what they find, there could be a loss of confidence in their estimation of your firm.
That loss of confidence trickles down from investors to management, and from management to employees.
Dirty data wastes money: Companies try to fix faulty reporting retroactively by throwing people and time at the problem. Like crime scene investigators, employees are charged with retracing processes, tracking down the real numbers, and retroactively apply fixes to reconcile accounts.
The more assets you manage, the more headcount is required. The more headcount, the more expense. The bigger the headache, the more turnover.
The Impact On Reporting
When dirty data enters the asset lifecycle – particularly in the early stages like acquisition and underwriting – it gets passed down from stage-to-stage, all the way to the investor. This exchange tends to occur when monthly and quarterly reports are generated and distributed. We have compiled a list of the four ways that dirty data can impact your critical reports.
What's The Fix For Dirty Data?
There is a better solution: Pereview Software by Saxony Partners.
An all-your-data-in-one-place, commercial real estate asset software solution, Pereview is the only Life of the Asset™ platform on the market today. It integrates siloed systems and processes, allows for push-button reporting, creates a single source of truth, and establishes standard workflows and guidelines for asset and data management.
No commercial real estate management firm is immune to the risks from dirty data. So, let’s chat about how we can ensure that your data is clean, accessible, and secure.