If data is modern day oil (we wrote about this here), then currently we’re at the start of a data rush! Data, at scale, and the insights we can derive from it, is going to be a key competitive differentiator in the digital economy. A corollary to this is, if you don’t produce your own insights, you’re going to have to buy them. Further, all data is not equal. The most sought-after insights are based on recent, verified data, making this the most valuable.
It’s clear there is something of a perfect storm brewing in the data analytics and insights space. The technologies now exist to seamlessly and easily aggregate data during day-to-day business. By doing this “in the background” versus the old ways where workers had to type data in, these companies are aggregating data quickly and painlessly. Simultaneously, data analytics technologies are advancing rapidly. Data analytics and reporting that used to take months and teams of people, are becoming fully autonomous and available in a second. This ability transforms businesses by enabling them to make data-augmented decisions in real-time. It also means that the companies that don’t use this ability to unlock value from data will suffer as their competitors embrace the new reality and improve the margins and effectiveness of their business.
SaaS companies that have realized the value of data have created an insatiable demand for it, and a new business model. In our personal lives, we’ve been conditioned to overlook the value of our data since we are only one data point and can’t see the bigger picture. We have learned to accept (or maybe not realize) the value exchange that is taking place when we use so many of the incredibly useful services on the internet. We log into Google Maps or Waze to find the best route to our next destination, not thinking twice about the fact that we’ve never paid for the service. Not with dollars and cents certainly. We pay for the convenience of avoiding a traffic jam with our data that Google (who also owns Waze, by the way) gleans from these interactions and then uses to sell advertisements. As many people have said in different ways:
With Google Maps or Waze, the exchange makes sense. As consumers, we are probably OK with trading our speed and location data for a smooth, traffic jam-free commute. The problems begin however now that the CRE SaaS world has learned from the success of data-driven economics in the B2C world.
Many B2B/SaaS players have realized that they can get paid twice or even thrice. Once in dollars and cents when we subscribe to the service, and once with our, or our customers’, data. In addition, I’d argue we go on to pay a third time, because, locked out of our own data, we need to buy insights and intelligence elsewhere – sometimes even from the same service provider we just paid the first two times. And, looking further into the future, we may end up paying a fourth time when it turns out that these same companies have auxiliary businesses that compete with us (see more on this below).
So, it sounds like the data rush has been rigged against us before we even get going? Not necessarily.
Firstly, take ownership of your data. Do not sign it away. Choose another supplier that takes a more reasonable approach to data ownership. Many CRE SaaS companies have made the conscious decision NOT to take ownership of the data you put into their system. This comes down to the realization that the data exchange needs to make sense. For instance, it makes sense in the case of Google Maps, where you share your data anonymously with others in return for a collective insight, but not in the case of business software. Imagine a world where Microsoft said any data you typed into Excel was its property? That would be outrageous. But if you read the terms & conditions from your CRE SaaS you might find it is saying exactly that.
Secondly, understand the company before you buy its products if the exchange means that you are going to become its product. This is especially important if the SaaS company you use also has auxiliary businesses that compete with yours. Giving your data away to a firm that can use it to compete with you directly seems very problematic. The challenge is that nowadays, many billion-dollar companies have either acquired businesses in, or widened their product suite into, adjacent markets. We believe that where these adjacencies end up competing with their own customers that companies should not engage in them. That is why we have always maintained very strong guidelines that (i) we will not do things that compete with our clients, and (ii) that we simply do technology – not staffing, opinions, etc. It lets us sleep with clear consciences and eliminates the potential for conflicts of interest.
Next, you need to get your data house in order. Data is only valuable pulled together in a standardized, consolidated way. You might have a treasure trove of data dating back years in your organization, but it is in siloes on shared drives or users’ desktops, or in shadow IT applications/EUCs/local applications that are not maintained by your organization’s IT department. You’ve got some work to do to start discovering and consolidating this data. The good news is that today there are many firms and technologies that can help you do this easily. And you benefit straight away by not having to buy in as much third-party data to base your decisions on since you can mine your own.
In the meantime, business continues. When choosing a supplier, choose a company and service that is respectful of your data and doesn’t add to the data chaos. For example, Excel is a much-loved and much-used tool in the CRE industry. But it is the antithesis of data-friendly. As soon as you save a spreadsheet to your local drive it’s cut off from the rest of your organization. Next, you email the spreadsheet to someone else, they change it, and you no longer have a canonical version. This sounds like a nightmare, right? But somehow removing Excel from your business sounds even worse. The good news is that now you can keep Excel but still centralize its data in real-time into a single source of truth that you own. The ideal system lets your people work the way they want to work, but also vacuums up your “shadow data” into a central data hub that you own and control, and enables you to start unlocking the value in your data.
It all starts with taking ownership of your data and picking the right partner for your data journey.
About Rockport VAL
Rockport VAL is the long-awaited and requested alternative to ARGUS®. VAL is user-friendly, affordable, powerful, and connects easily into your tech ecosystem. Even better, you don’t need to hand over ownership of your customer data just to sign up.
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Rockport provides a SaaS platform for all facets of the commercial real estate life cycle. Founded by Rick Trepp, founder of Trepp ®, Rockport has been a trusted partner for systems & digital infrastructure to the largest CRE players for the last 20 years.