I mentioned in my inaugural “CDO Stack” column that the real estate industry faces unique challenges when it comes to going digital because it has historically been a late adopter of technology. Part of the reason why I think most CRE firms struggle to transform into digital entities is that many simply do not know what they want their digital end-state to look like.
This existential question of what to be—at least digitally—when a business grows up is something we refer to as ‘digital maturity.’ And with all the transformation we are seeing in the world around us, it’s more important than ever that CRE executives figure out what kind of digitally mature organization they want to become, both now and in the years ahead.
What do I mean by digital maturity? Our view is that digital capabilities, and accordingly, digital maturity can be divided into six distinct categories. Those are:
1. Technology Capabilities. Digital maturity isn’t exclusively about technology capabilities, although they are certainly a big part of the story. It’s just one category of six and describes the actual digital tools and technologies available to and deployed in the enterprise.
2. Work. This is about the way in which the work required to keep the enterprise running happens and especially about how well that work is enabled by or automated with tools and technologies.
3. Workforce. Digital maturity is also about who is actually doing the work and what digital capabilities or skills they have or need to perform their jobs.
4. Workplace. This refers to the physical environment in which work happens and how well-suited that environment is at a digital level to support work and facilitate connections and collaboration.
5. Data Mastery. In a digitally mature organization, this describes the extent to which the data required to fuel processes, support decisions and gain insight is available, can be trusted and can be put to work to help run the business.
6. Digital Infrastructure. This is a foundational element focused on the technical infrastructure required to support digital capabilities, including how secure, flexible and suitable that infrastructure is to enable digital ambitions.
These six categories, some of which may be unexpected, constitute a framework for how CRE firms can measure their digital maturity. For each of these, where does your organization fall? And where do you ultimately want to land?
Answering these questions isn’t as simple as looking at what peers are doing and trying to keep pace with them. Digital maturity is not a one-size-fits-all proposition. What is right for a given company in a given real estate sector does not prescribe what is right for all such companies in that sector. Perhaps most important, is choosing a destination based on the value it will bring to your organization. What does moving the needle on digital enable you to do and what value does it bring that you don’t already drive today?
Answering this will help test your hypothesis about where you want to be in each of these categories (your business case), refine where you want to go and establish a roadmap of what it will take to get there and how fast you should move. Don’t, as one colleague put it, “throw nickels around like they were manhole covers.” Rather, be strategic in your vision for digital maturity and give that vision the attention and resources required to achieve it.
Whatever digital maturity means or doesn’t mean to your organization, all CRE leaders should be thinking about it. Why? Because the real estate industry of the past—the one focused on instinctual decision-making over data and analysis, people over process and time-tested routines over innovative concepts of how to use space—isn’t going to help CRE firms thrive in the decade ahead. Put simply, doing things as we’ve always done them is no longer an option, just as you can’t rely on others to define what digital maturity means to you.
John D’Angelo is a managing director with Deloitte Consulting and leads the real estate industry sector for Deloitte Consulting in the U.S. With over 33 years of experience as a management consultant to the global real estate industry, John has helped some of the biggest names in real estate leverage technology and use data to optimize and transform their operations.