Integrated Workplace Management

Joined-up approach to real estate management technology

Published in Property Week Sept 2009

Computers have become vital to smoothing the complex process of creating and managing property, yet this can still seem like taking a holiday from hell. A ‘relaxing’ break can involve a cab to the airport, flight to a major city, train to a regional centre and another cab to a dream holiday home. Every stage involves latest technology but they rarely work in perfect co-ordination, leaving you tired, late and frustrated. Even then problems persist. The pool is empty, the kitchen disabled and another family has claimed the same holiday.

A private jet from front door to efficiently managed retreat seems an impossible dream, yet this is the aim of the latest generation of property software. Endless hours have gone into co-ordinating the stages from funding, to drawing board, to occupation, stitching together different software for development appraisal and valuation, construction and project management and finally leasing. Yet attention appears to waiver once buildings are let. Occupiers often still consider property just a roof and four walls, while management involves merely cleaning the windows and paying rent.

Integrated workplace management [IWM] is meant to provide a ‘joined up’ approach immersing bricks and mortar into key processes such as staff management, accounting and strategic planning. Property is seen as an integral part of business rather than a way to keep out the rain. This end-to-end process has been popular in the US for a decade but still faces some resistance over here. One cynical management consultant suggested it was the same software repackaged under a new name.

Yet the UK market for IWM has grown 12% in the last 18 months alone as pressures increase to cut costs and make better use of property. Jason Allaway, European commercial director at Raindrop Information Systems says converts to IWM include a leading UK leisure chain, a major international furniture retailer and a top high-street retailer. Integrating property into business planning can have startling effects. When Deutsche Bank pored through the Sears Group in the US it found the property worth more than the group’s stock market value. Turning the same light on its own branches revealed they were falling short of the bank’s target 25% return on equity and led to a Euro1bn sell-off in 2003.

‘The recession is increasing pressure on companies to cut costs,’ says Allaway. ‘IWM can help uncover under-used facilities and consolidate and rationalise portfolios to reduce occupancy costs. It promotes the right space in the right place.’

Financial pressures have brought lifecycle costing out of the backroom and into the board room, requiring integration of real estate and facilities management rather than the old let-and-forget model. Most businesses can say to the nearest pound the carrying cost of their computers or company cars but few grasp of the real burden of property. This goes beyond rent to include facilities management, staff support and IT support, and requires software that integrates these elements.

Other pressures demanding changes in the way property is judged include new requirements for financial transparency. Any company operating in the US must conform to the Sarbanes-Oxley Act, particularly in regard to lease transactions, in response to scandals such as the Enron debacle. In the UK and mainland Europe, new international lease accounting standards demand tighter integration between real estate and financial data.

Wider technological change and the green revolution are also proving a new strain on conventional management. With the increase in remote working and the advent of the ‘virtual workplace’, IWM can provide employee self-service, office reservation scheduling and remote workforce support. ‘The system becomes, in essence, a service delivery platform for the virtual office worker,’ says Allaway.

Security has risen up the list of priorities to become an everyday concern, ranging from terrorism to power outages. IWM can be critical to managing business continuity and disaster recovery, identifying backup sites, employee locations and critical infrastructure in the event of business interruption.

Finally, growth in multi-sourcing facilities and real estate services has exacerbated the problems of communication between suppliers and software systems. The web-based portal interfaces that typify IWM systems enable service providers, partners and other contract staff need to have easy access to workplace data and processes.

JARGON BUSTER

An IWM suite such as Raindrop’s Manhattan integrates four key components - project management, property portfolio and lease management, space management (moves, additions and changes) and maintenance management. Web-accessible software operates from a single database and offers workflow tools, executive dashboards, and predefined and customized reporting.

IWM functionality is continuing to evolve as an asset lifecycle management system providing greater visibility of the total cost of occupancy and cost per head of workspace through key stages of the property lifecycle and greatly reducing the cost of operations.

The software operates from a single, central database and offers workflow tools, executive dashboards, and predefined and customised reporting capabilities.

Well constructed IWM enables automation of many processes involved in planning, project management, leasing and day-to-day operations.

IWM applications can operate in conjunction with other enterprise applications such as enterprise resource planning [ERP], supply chain management and human capital management via Web-based technologies.