The Digital Real Estate Survey 2023 shows that the maturity of the construction and real estate industry depends not only on technical possibilities and new innovations, but also on how we handle and use data. The results of the survey show that this is where the greatest challenge lies that needs to be overcome during the digital transformation. Our expert Christian Heuer, Head of Service Unit Data & Analytics, tells us how to do this and what obstacles still lie in our way.
How do you assess the current implementation status of data analytics in the construction and real estate industry?
My assessment is in line with the results of the study: Data analytics is stuck in the valley of tears - in terms of the Gartner Hype Cycle. Currently, the application is still often limited to dashboards to make something visible. That's as far as it usually goes. Data maturity in our industry is relatively low.
What reasons do you see for the low maturity?
The industry operates in a very heterogeneous environment with many different stakeholders. Data needs to be integrated across organisations to take digitalisation to a new level. In other industries, such as insurance, the know-how and handling of data has already penetrated much deeper into the business. There, business specialists collect and analyse their relevant data, not IT specialists. Many in our industry are more hands-on, have completely different topics on the table and are not typical screen workers. Therefore, there is also a different relationship to the digital.
What does the construction and real estate industry need to do?
We have to differentiate here. Large companies are usually much further ahead in digitalisation than small companies. But many real estate organisations are relatively small. It is the task of consultancies and technology providers to introduce these companies to digital technologies. We have to show them how clearly defined improvements can be achieved with available solutions. In this way, comparatively small resources can be used to achieve highly visible added value and create an appetite for more.
So actually quite simple, or is that deceptive?
The devil, as so often, is in the detail. The big challenge in the industry is the low data maturity combined with low data literacy, i.e. the awareness of data as an asset. At the same time, the requirements for data architectures in the extremely heterogeneous environment of the real estate and construction industry are very complex. Clear and transparent communication in conjunction with structured data governance are happy to help create a better understanding of data.
What other starting points do you see for better anchoring data analytics in the industry?
In my view, there is great potential if data is brought together more strongly. Common Data Environments (CDE) are one approach here, for example. The complete end-to-end data integration creates new possibilities for the use of data analytics and are happy to help drive acceptance. In addition, the added value of enriching the existing database with open data, for example, must be demonstrated. In this way, freely available, open data can be used to cover a wider range of use cases.
However, this also means that these use cases must be available.
These are already available in large numbers. I see the availability of the data necessary for the use case as more of an obstacle. A lot of things fail because of this. The plausibility and the consistency of the data across all properties are often not given.
Are there other technical aspects relevant to the use of data analytics besides data quality and data scope?
Standardisation is a very important topic, especially when you have many stakeholders with whom data must be exchanged. It is very important for the correct integration to know what data is actually available and how it is to be read. Without the appropriate metadata and agreed data catalogues, data integration is very difficult to achieve. A challenge here is again the heterogeneity of the industry. There are various niche standards that are used for specific application areas and in the associated specialised systems. The difficulty is to transfer the data from these focused systems into a universal view. In this respect, the industry is still in its infancy, but has launched initiatives such as the International Building Performance & Data Initiative IBPDI.
What organisational aspects need to be considered for the development or expansion of data analytics?
Organisational aspects should be regulated in the so-called data governance, which must be part of a company's data strategy. Data governance is the key to everything that happens with data in a company. It not only creates awareness in the company, but also implements it in the organisation, empowering it to work with data properly. In the construction and real estate industry, data and data analytics are still very much seen as IT topics and usually they are also organisationally anchored in IT. However, data is a fundamental issue of the core business. Data governance is important in order to achieve the shift away from IT and closer to the business.
The topics of data and data analytics involve many organisational, technical and legal aspects and are associated with corresponding effort. How can smaller companies with limited resources tackle these issues?
The most important thing is to promote data literacy. Employees should have a feeling for data and how to deal with it. There must be a greater awareness that data is an important asset. So completely new ideas and impulses can arise from data. Only companies that actively work with their data can use the corresponding potential. In addition, even small companies need some kind of data strategy for the successful development of data analytics, in whatever form it is created. It is important to formulate the requirements for one's own business and to derive from this how the data landscape must be designed and what one wants to implement.
Finally, can you give us an outlook on which developments and trends are emerging for the future?
Many topics that are likely to be relevant in the future are not really new. Corresponding ideas and partly also technical solutions already exist. So far, however, broad implementation has often not been possible due to technical limitations. Thus - combined with a certain data maturity - the topic of Artificial Intelligence (AI) naturally becomes interesting. The better and more widespread AI applications become, the more important so-called AI explainability becomes, i.e. the possibility of being able to understand statements and decisions made by AI. In addition, prescriptive aspects of AI are also receiving more and more attention. This involves not only being able to explain the result of the AI, but also having the AI tell you why you should do something. For example, AI not only tells me when a system will break down, but also why. Natural Language Processing (NLP) also holds great potential. In our industry, a lot of data is still contained in documents or PDF files and is therefore difficult or impossible to access. The development of this treasure trove of data will keep us busy over the next few years. In addition, all the Web3 technologies, such as Metaverse, will certainly become interesting for the construction and real estate industry, although the potential for the industry still has to be weighed up.
About the survey
The Digital Real Estate Survey has been surveying the status of the digital transformation of the construction and real estate industry in Switzerland every year since 2016 and for Germany since 2019. The whitepaper presents the current situation in the two countries based on the assessments of various executives and professionals from the industry and is supplemented by the expert knowledge of consultants from pom+Consulting AG.
The study can be downloaded free of charge.