For the last years business leaders in the real estate industry are suffering from the following situation. They hear over and over, in media, books, magazines, blogs, events, and networks, that the industries are getting data-driven… But nobody tells them what does that mean in their specific case. Buzzwords like BI (Business Intelligence), AI (Artificial Intelligence), Self-Learning, Digital Twin, and Data Lakes, feel kind of annoying when you do not look at them as a technician in love with the potential tools.
This can be compared with a company leader who has the responsibility to take the correct decisions to stir the boat in the healthy direction the next 3 to 5 years and beyond. Every time they sit on the sofa at night and have to read "data is the new petroleum" they have the same angry thought: "OK, but petroleum also is good for nothing! First, you have to refine it…and then you need to have the machines that actually are able to transform gasoline into movement!".
The answer has 2 dimensions. The first one is that all these data-driven theories are based on digital data.The latter has existed for only a few decades, which is not a lot if we compare to previous shifts in the way we would understand information and business.
Second and more important, as it is new, the information we can get about all these topics is still not generally spread into education. Meaning, that the thinkers and creators of the information about digital transformation are mostly still coming from 2 sources: the data/software industry and the ecosystem of consultants. Both sources jump on new technologies, develop some theories or workflows and run on the market to make business with this one or several potential ideas.
As every company leader will understand, both sources are based on a business model and not on absolute knowledge or reality. Software companies cannot avoid thinking out of their product , and cutting edge consultants are very limited, self-trained individuals or bigger companies that prioritize one thing: sell as many hours as possible, and even try to stay inside the clients' company forever based on continues improvement or maintenance of systems. And there is even a third case which is the consultant who sells the software.
At some point, their solutions or thinkings can be very restricted and since they can only show one of the multiple possible realities.
Data is the mass or liquid of zeros and ones, that are stored somewhere in a file or a data warehouse. The file may be broken, the file may be inaccessible because it was issued with software that is no more on the market. It doesn't matter. The data is there, without value for these actors.
Information is the data that can be read and understood by the actors involved. If they can open the file or access the data warehouse, and put the data together in a way that gives them an understandable piece of information. A word in a text, a door in a drawing, etc. Knowledge is the next step. When the actors have some information that they can put in context and understand a specific situation. In the digital era, this information comes with meta information. When receiving an invitation by email, you can read: "Meeting tomorrow at 2.00pm". You can also see who is invited, who is the host and who has accepted or declined the invitation. Putting all the pieces of information in context, you can understand the whole situation.
Intelligence is the capacity to take knowledge and transform it into decisions. It is the process of transforming data into Information with metadata, then set it in context, and then extract and cross the pieces of knowledge in order to answer the questions that will help me to make a decision.
This is the whole magic around BI and being data-driven. Whats is Business Intelligence? Business Intelligence is defined as "Business intelligence (BI) combines business analytics, data mining, data visualization, data tools and infrastructure, and best practices to help organizations to make more data-driven decisions." (Tableau.com). BI is a balance between knowing the questions you want to ask combined with setting up a system that allows the flow from data towards information with meta information towards knowledge.
A quick insight: All these ecosystems are based on the fact, that you have the 4 peaces in place.
The whole capacity for intelligence stands and falls with the capacity of ecosystem 1 to offer an open environment that naturally lets other systems access and extract what's needed.
Why is it so difficult for C levels to visualize this setup and not fall into the trap of buying and integrating tools and systems into their company ecosystem that are black boxes?
It can be explained by the pathology in the acquisition process of companies. The interest and education about the potential of digitalization usually are raised in organizations through specific persons on the technical level, that have to deal on a day-to-day basis with specific problems, and that are looking for solutions. They find these solutions on the market and escalate the need for specific tools inside the company. As company leaders are aware of the need for digitalization, there is usually a budget for it, and they are happy when they have the sensation, that on an operative level, their people are implementing digital solutions. It feels like something is going pretty well down there, and we are moving forward into a digital world. Nevertheless, technicians do not consider the big questions about the datamining of the whole project portfolio, which raises the issue of the conversion rates between resources and profit. Additionally, those actors just want a specific tool to make a punch list on the site and that has the fancy capacity tho show mi in AR (amplified Reality) how the thing will look like. Of course, having a team or employees that are technologically driven and asking for digital tools is an incredible asset. It saves a lot of time and resources in change management and is proof of healthy curious company culture. It has just not a lot to do with the understanding and setting up of a system that will give the organization a competitive advantage in the coming years.
The decisions that have to be taken during these next 5 years in terms of system and tools acquisition need to be understood by the leaders as vital for the health in some years when it will be too late to step out of a closed siloed ecosystem. Open standards, APIs, and integrations will be the difference between getting stuck and isolated or being able to learn, grow, expand and thrive.
Andrés Garcia Damjanov, Head of Sales at Catenda.
Credit featured image: Pathways International – What is Business Intelligence