No formalities are necessary, you know. It
will be a good idea if you drop by my office around six o'clock on
Friday so that we may both go to my place together.
It is so-called "dummy" or "expletive" it. It acts a placeholder, as a proxy subject. This structure using it divides a simple subject-verb-complement utterance
Dropping by my office around six o'clock on Friday will be a good
into two pieces, in order to put some emphasis on the first piece:
It will be a good idea | if you drop by my office around six o'clock
The speaker is making a suggestion, although in a somewhat circuitous manner. Paraphrase: You should come to my office...
If you wanted to substitute that for it, you would have to change the order of the clauses, since that as demonstrative pronoun refers to something already mentioned or present:
If you come to my office around six o'clock on Friday, that would be a
Dummy / placeholder it as proxy subject can anticipate the actual semantic subject. Demonstrative pronoun that must refer back to one.
These are colloquial statements which strike a casual tone.