AMP Capital Real Estate embarks on technology transformation

AMP Capital Real Estate is taking a "three-pronged approach" to technology transformation after an internal review uncovered a series of strategic and functional shortfalls.

Head of finance and innovation Evan Walsh told the Gartner data and analytics summit last month that the division - which has $28 billion of assets like shopping centres and airports under management - has a new vision for technology, and a 'technology and innovation team' to implement it.

Walsh said a review of the division's technology platforms two-and-a-half years ago had uncovered several areas for improvement.

"We were lagging behind in our investment in technology, so we had years of underinvestment and we found that our technology landscape was fragmented and reactive," he said.

"We found was that our core systems were easy to break, and the real problem around that is we had a lack of integration, our data was unreliable, and was untimely, and we had some quality issues there.

"The third area that we found was there was a risk of technical debt and that was increasing on a day to day basis. What was causing that was we found that everyone was building, but nobody was strategising or architecting.

"The final area we found is that the technology gap with our peers was continuing to widen at a very fast pace. We found that technology was continuing to be a stronger driver for competitive advantage within the real estate business."

The review led to a technology transformation effort that is still underway.

"We took a three-pronged approach," Walsh said.

"Initially, we focused on protecting and remediating our business, and we did that through addressing physical and cyber risk, uplifting our buildings with smart technology, and looking at our core systems and boosting them by either investing in them, or decommissioning and replacing them with more modern industry-leading systems."

The second prong of the transformation focused on creating sustainable ongoing pathways for change.

"Our approach to that was to increase our in-house technology capabilities and establish a modelw here the technology and business teams worked hand-in-hand," Walsh said.

The final prong of the transformation is around "value creation", which principally focuses on an overhaul of AMP Capital Real Estate's data, with an aim to generate insights that improve its operations.

"We actually have two business KPIs around data, which has never happened before," Walsh said.

"The first one is focused on data security and data integrity, and the final one is actually focused on the data strategy and transformation program, with the goal of becoming a data-driven organisation."

New data platform

AMP Capital Real Estate has in excess of 60 years of data but lacked confidence in the integrity and quality of data being used for decision-making.

Walsh said AMP Capital wanted to better understand its data. To aid this, it implemented a Snowflake data warehouse and Tableau to analyse and visualise the data.

Walsh's team started with a series of ‘lighthouse projects’, "which were essentially quick proof-of-concepts" used to show various parts of the division what the new data platform could accomplish.

These projects "sparked curiosity" and created momentum for a broader data transformation and move to data-driven decision-making.

The first dashboard built in Tableau dealt with tenant arrears.

"This is a real pain point for us over the Covid period, with a number of our tenants not able to pay rent during a period where they're not trading," Walsh said.

"What we had to do is relatively quickly provide a solution for our management teams so they can easily analyse the portfolio to understand where the key risks are; have an ability to be able to slice and dice by a number of different parameters such as the size of the shopping centre, the category of the tenant, and the age of the arrears, so whether they are 30 days owed or maybe 120 days owed.

"What we did there is we used Tableau, with a live feed from Snowflake, and we were able to give real time information to provide our teams, and they could make decisions at that point in time."

A second data project saw AMP Capital Real Estate partner with Skyfii, whose origins involve using in-centre wifi to analyse shopper behaviour.

"We gave [Skyfii] multiple different data sources and now they've started to predict things like, how do we optimize the value of our shopping centre just by looking at who would be the best retailer to be able to fit in a certain [vacant] shop," Walsh said.

"We're showing value to the leasing team by being able to drive deals that suit not only the retailer, but also us as the owner and manager."

A third data analytics use case is focused on better managing the energy consumption of physical assets.

"A good example of that is we're looking at how we can use our data to provide insights to optimise where we might turn air conditioning on and off in a building, depending on the use of that building at that certain point in time," Walsh said.

"The ultimate benefit of that is we can save energy, and dollars for that, which will then be on passed to our tenants and also to our owners."

Walsh said there was a “general push” across the industry to use data and analytics to generate insights and generate value and “ultimately assist growth through the identification of new opportunities.”

This was accelerated by Covid-19 which prompted the retail industry to shift to online solutions as consumer preferences changed.

Walsh said so far he is “really excited” by the progress seen in a short amount of time and plus his team's roadmap for the future.

“I can see the energy within the business about that data transformation journey, and I'm looking forward to what it can do for us," he said.