16 Aug 2022
Yet, in real estate, much of the information you typically see is in an unstructured format. That means you might have information stored in PDF format, in photographs or even still on paper in some cases. Essentially, your data may be stored all over the place, and is rarely organised in a way that is efficient and easy to use. And there’s nothing more frustrating when you’re trying to find one critical piece of information, and you are not sure where to look.
Unstructured data can be misleading too. It can be hard to tell whether the information they find is accurate. That makes it particularly difficult for property managers to trust what data they’re seeing.
This lack of trust might lead them into making bad decisions based on incorrect information leading to significant operational risks.
For your business to continue running smoothly, you must consider all the potential risks that might occur in the everyday running of your business and what harm they might have on the business continuing to operate as normal.
Essentially, how much damage would they do should they occur and can you quantify it. For example, what would be the impact from human error where numbers were inputted wrongly into a spreadsheet or what would happen if an insurance renewal was missed?
In your risk assessment, you would look at the potential impact each risk would have on the business and assign a probability of it happening. An overlooked issue, however big or small, could have an increasingly negative effect on your real estate investments or in the worst-case scenario, your ability to operate as a viable business.
To avoid these occurring altogether is almost impossible, however, you can take some ongoing precautions to reduce the level of associated risk.
Real estate owners and banks must learn to accept a certain degree of operational risk, but they can counter some of this by educating their employees with risk awareness training and, of course, insuring against the occurrence of these worst-case scenarios to minimise the impact of any associated negative outcomes.
It is no secret that data is quickly becoming the driving agent in real estate. Unmanaged and unstructured data increases operational risk substantially.
Surprisingly, many companies still rely on spreadsheets to store their critical real estate data, despite knowing that these almost always contain out-of-date, inaccurate or incomplete data with no one having clear ownership of the content.
According to Gartner, unstructured data likely represents as much as 80% of a given organisation’s information assets and as such, many of the risk factors mentioned above can be substantially reduced if it is managed properly.
Adopting real estate software technology means that companies can begin to reduce some risk to their operations by storing their real estate data securely in a single central location in the cloud, whilst maintaining who has access to it through user access controls. In providing a single ‘source of truth’, all real estate activities, reminders and actions can be set so that day-to-day operations are highlighted at the right time, so property managers can rest assured that regulatory compliance issues have been taken care of.
Recognyte’s technology actively reduces operational risk by using its proprietary AI technology, called DataScout, to automatically clean and structure real estate data. Property and investment managers can use the solution to gain improved accessibility and visibility to all their property information.
Once in a well-structured state, data can be organised and managed in a portfolio management solution, like ActiveEstate.
A portfolio management platform replaces spreadsheets and ensures that important renewal and overpayment dates are never missed by offering reminder alerts and actions. That makes the risk of costly litigation unlikely and that alone offers property managers that extra peace of mind.
As a result, clients can combat many potential operational dangers by making technology work harder to protect their business operations.
By using the right solutions, you can easily coordinate the day-to-day management of your real estate assets. You can be confident that workstream processes are strictly followed and know that your clean and structured data will lead to more accurate future forecasting.
Most importantly, by having data organised in one central hub you can take a significant step in reducing your overall operational risk.