So coming out of our summit, we talked A LOT about technology. Specifically we did the old SWOT analysis on ourselves and the competition. Going down that road we discovered a new buzzword in a lot of industries:
real-time
I’m a Georgia Tech Industrial Engineer. I do a lot of statistical analyses, I’m one that runs our internal and client facing BI tools, I’m very comfortable in large data sets. And never once have I been in a situation where “real-time’ data was more useful that up-to-date but historical data.
If we talk specifically real estate for a second, real-time can actually significantly distort the conversation. What is a “real-time market analysis”? I’ll quit my job today if you can show me a person, company, or algorithm that can accurately show the state and value of the real estate market today for a given city. Real estate markets simply don’t work that way. A deal gets completed in the building down the street – by itself it can shed ZERO light onto the state of the real estate market in Atlanta. That individual deal is going to be influenced by so many factors that it can’t represent anything but the value of that individual instance. However, several deals taken together can allow us to understand market trends which can help us understand the market. But as soon as we need to look at several deals together we’re always using historical data. It’s no longer real time.
The same is true in retail – the classic real-time case study. If you have real-time purchase data you don’t understand your customer any better or worse. At best you can see changes in trends quicker – but you may actually be misreading them because the current data isn’t in context of some new market situation yet.
So what is real-time data good for? Faster tactical decisions. Real-time data can help you restock inventory faster meaning you can move toward that Just-in-Time model everyone is always talking about. Real-time data can help you better make scheduling decisions. But it is only useful for tactical decisions that need to be made today and may impact a timeline up to a week from now. Anyone using real-time data for strategic decisions should probably be rethinking their approach.