What’s Standing in the Way of Data Standardization in Real Estate?

History is full of examples of standardization propelling civilization forward by making processes simpler, cheaper and more efficient. For example, prior to the introduction of the universal serial bus (USB) standard in 1996, the idea of “plug-and-play” was just a dream. Connecting printers, keyboards and other peripherals to a computer required navigating a maze of incompatible ports, drivers and cables. The USB standard made technology easier to use and removed a major barrier to the adoption of digital technology.

Unfortunately, when it comes to data, much of the real estate industry is still stuck in a state of non- standardization. In an increasingly data-driven world, most organizations aren’t set up to effectively leverage their data. The result is that these organizations, and the industry as a whole, are unable to maximize the value of real estate data to streamline operations, reduce costs and operate more sustainably.

The key to real estate attaining its “USB moment” is data infrastructure, the technology and systems used to manage, store, and process data within an organization. During May’s OSCRE Innovation Forum, Visual Lease’s Bill Harter and OSCRE’s Ian Cameron and Chris Lees discussed the impetus for building a modern data infrastructure.

Real Estate’s Data Disconnect

Laying the groundwork for data standardization in real estate might seem more complicated than just designing a plug and the receptacle it goes into, but it’s actually not. Whereas the USB standard had to be developed from scratch and relied on cooperation between fierce business rivals, all of the components of a robust data infrastructure are well-understood and available to be either outsourced or built in-house. They include:

• Tools and policies for establishing data quality, consistency, privacy and access control
• Data processing and analytics tools
• Data storage devices and services
• Data integration solutions
• Security and compliance software

So, why isn’t implementing data standards in real estate as easy as implementing a connectivity standard in digital technology? The USB standard was developed and agreed upon by companies that were already in the business of making and selling technology components. This would be like real estate organizations agreeing that, in order to simplify the construction, operation and maintenance of buildings, all walls should meet at 90-degree angles. But because managing data is not the primary remit of real estate organizations, the benefits of data standardization are harder to grasp. That, in turn, makes it more difficult to build a business case for investment in data infrastructure.

Data Infrastructure’s True Cost – and Value

That business case is important, because creating a data infrastructure involves substantial up-front and ongoing costs. Initial setup cost can range from $100,000 to over $500,000, depending on factors like company size and data needs. Ongoing costs for things like cloud infrastructure, subscriptions and support can run in the tens of thousands of dollars per year.

But businesses can no longer afford to assess those costs in isolation. Instead, they need to weigh them against the many benefits of being able to get the most out of their data. After all, data is becoming like water – an essential resource that businesses can’t do without. Just as no modern business would rely on a bucket brigade over a system of pipes, pumps, and valves, no real estate organization should be operating without a data infrastructure.

One piece of good news is that, once we have widespread adoption of all the components of a data infrastructure, real estate already has its version of the USB standard ready to deploy. The OSCRE Industry Data Model™ (IDM) is a data template that’s been developed over the past 20 years in collaboration with real estate owners, occupiers, investors, service providers, and software companies. Once organizations apply this template to their data, they can work seamlessly with any other company that’s also using the IDM.

Putting the Pieces Together

All of the tools and know-how real estate organizations need to unlock the full value of their data are readily accessible, including the OSCRE IDM. Many companies are taking advantage of those resources to build a data-enabled path to a more profitable, efficient and sustainable future. Real estate’s “USB moment” is within reach, but companies who want to benefit from it need to make the investment to catch up now.