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Before KPMG

A Canadian real estate company knew generative AI would impact its operations but didn’t have a clear strategy to harness it. For example, the firm wanted to understand how it could influence tenant headcounts and workflows, affecting its portfolio and investment strategy, and internal functions, particularly regarding talent needs and required skills.

At the same time, some teams within the organization had started experimenting with generative AI. The company wanted to establish governance and cybersecurity measures for responsible AI use while addressing potential risks associated with new applications.

Key pillars of KPMG’s collaboration

KPMG began by delivering a complimentary executive training session on the benefits and risks of generative AI, followed by a workshop to identify business opportunities.

Building on these sessions, KPMG launched a comprehensive generative AI impact study that included industry research, business area analysis, and extensive stakeholder interviews. The study evaluated how AI would impact the company’s external and internal activities, focusing on two themes:

1. Global trends affecting commercial real estate: The study analyzed the growth of AI adoption and legislation in Canada and internationally across major industries. KPMG examined how generative AI, automation, and hybrid work trends could shape workplace behaviours and impact office space. The findings revealed that some sectors are particularly vulnerable to these trends, suggesting that generative AI could reinforce the shift toward remote and hybrid work, potentially reducing demand for certain types of office space.
2. Trends affecting the company and its workforce: The study explored how generative AI could influence three critical areas: the company’s strategic direction around risk management, portfolio construction, and sustainable investing; its core business in real estate investment and asset management; and its workforce, including human resources, finance, marketing, legal, and IT.

To evaluate the risks associated with the company’s adoption of generative AI, KPMG was tasked by the Internal Audit team to perform an AI maturity assessment to assess its technical, data and organizational readiness. Using a customized Target Operating Model (TOM) for generative AI, KPMG worked with the client to define objectives and create a detailed framework outlining approaches for AI strategy and deployment. The evaluation criteria and specific operational activities addressed six dimensions:

• Service delivery model
• Architecture and tools
• Data
• Culture, organization and talent
• Governance (risks, legal compliance and cybersecurity)
• Functional process

Using this framework, KPMG delivered a detailed assessment report that graded each dimension and provided a prioritized roadmap for managing risks and enhancing technical controls. KPMG also reviewed and validated the client’s generative AI governance structure, policies, and user guidelines.

Client outcomes since working with KPMG

KPMG’s impact study provided the company with a clear understanding of how generative AI could affect its clients and business operations. For example, the report indicated that 44% of jobs in the office and administration sector could be impacted by automation, while 37% to 44% of roles in legal and architecture might also be affected. These findings were linked to the rise of hybrid and remote work, which ultimately altered the company’s asset management strategy.

Moreover, the impact study helped the company identify skills gaps within its workforce. This prompted them to offer additional AI upskilling programs for employees and prioritized hiring individuals with AI expertise in key business areas.

The maturity assessment helped the company to implement more rigorous testing and validation of its new generative AI tools, identify areas for strengthening AI governance and controls, and determine the process for prototyping, developing, and retiring AI use cases.

As a result, the real estate client has not only embraced the potential of generative AI but has also positioned itself for growth and responsible innovation in an evolving market.

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