Technology can provide the answers to this broader line of questioning, but the mindset and strategy behind any such software implementation must first be attuned to this new orientation.

"Decision support requires a different tool," says Perkey. "In the past, software vendors developed rich, deep solutions appealing more to the clerical or administrative side of business. Now the market is willing to give up some of the depth to get the breadth necessary for the executive, operational view. Technology needs to provide us with knowledge machines, not just information processing machines."

Current CRE Landscape

Perkey characterizes today's corporate real estate landscape as a multi-function universe that plays host to a plethora of divergent activities, from site acquisition, development, and construction to lease administration, strategic planning, cost management, and ultimately portfolio management.

At the same time, these functions don't necessarily all report to the same organizational unit, creating an environment that promotes confused, inconsistent communication and that makes collaboration with internal and external partners difficult.

These conditions are reflected in the following technology realities:

• Fragmented reporting. While the functional silos each have good systems, they are not integrated across the corporate real estate organization.

• Duplicative processes. Lease administration, for example, is responsible for abstracting leases and tracking clauses about repair and maintenance, but maintenance groups must also understand those provisions as they monitor the facilities and work orders.

• Redundant data entry points. Information about a single property typically appears in many different places within an organization, with a degree of accuracy that can vary among functional silos.

Most significant, says Perkey, is the lack of strategic information to evaluate the enterprise-wide impact of all these activities.

"How do we get information from our individual stored systems to the people who need it—stakeholders, the business units, the shared services, the C-level executives, and the real estate department?" she asks. "There is poor visibility for people in that level of the organization to determine what's happening within their world."

Technology Vision

To resolve the fragmentation and clear up the cloudy visibility, Perkey envisions a technology solution that incorporates four main features:

• A central data repository for storing all the information used across the corporate real estate enterprise (not to be confused with the much more extensive, unwieldy, and often unfinished data warehouse).

• A pipeline or connection to feed data into the central repository from individual applications. New software tools now make it possible not just to transfer data but to mesh application functionality, so, for example, information sent to an accounting application could trigger some other routine analysis.

• A portal enabling all the players across the organization, internal and external, to view data important to them based on their respective roles.

• A digital dashboard where employees and partners will automatically receive specific filtered information or KPIs relating to their particular area of expertise—for instance, a list of leases about to expire—as opposed to having to develop queries, run searches, and request reports.

How do these four components translate into actual solutions? Of the dozen or so software vendors developing products for real estate space, many are buying into this vision, but in different ways, reports Perkey. That means there is still some trade-off among aspects like Web capabilities, integration, and breadth of functionality—as well as risk.

"What we're seeing is that the more focused, siloed solutions come from companies with greater stability," she says. "Those vendors trying to move across the enterprise in an integrated way don't have the same company stability, which is typical in the world of software development. I think any company who wants the benefit of this new type of software also needs to have a reasonable level of risk tolerance."

Guidelines and Self-Assessment

In the future, as the development cycle unfolds, risk should decrease while functionality becomes more robust. In the meantime, organizations that need to take action now can't afford to postpone their decisions until an ideal solution is available. CBRE advises its clients to consider several factors when evaluating their technology choices.

One of the major issues is the debate between an integrated solution and a stand-alone application. The latter option gives rise to the question of internal vs. external development and support, both of which pose their own challenges.

"If you go with a stand-alone application, how are you going to fulfill the technology vision of giving stakeholders across the enterprise a place where they can quickly see the information available so they don't have to worry about duplicating processes and spending extra time in activities that don't add value?" Perkey wonders, cautioning that maintaining stand-alone applications can, at times, be critical to the success of a real estate department.

Other significant decision points address questions of control over data and processes, degree of access, and, of course, cost.

"When we're dealing with cost we really try to help clients understand that technology is not for everyone and that we're not trying to introduce technology for technology's sake," says Perkey.

CBRE distributes a self-assessment questionnaire to help clients understand their needs and ultimately arrive at the technology solution that makes the most sense for them. Asking participants to rate things like their current ability to accommodate planned growth and access to, and timeliness of, information, the form is given out to all those involved in the functional areas across the CRE enterprise as well as some of the key stakeholders. Responses are recorded individually, and then compared in a group meeting.

"It's very interesting to see the dynamics of the conversation about who thought access to information was currently acceptable, why they thought it was, and who thought it was a high-risk area," says Perkey. "As we go through this analysis we're able to pinpoint where the specific and most important pain in an organization is, and then we can help work through the issue and determine if there is a value proposition to implementing new technology."

A Case Study

A few years ago, CBRE used its analysis tools to help a client with decentralized facilities gain better control over its projects. The self-assessment form uncovered manually intensive and very inefficient processes, with the same information captured many times over.

"People were re-entering data from that famous real estate system, Microsoft Excel, into the other famous real estate system, Microsoft Access," quips Perkey, tongue-in-cheek. "They didn't have very timely information, and the multiple, non-integrated reporting systems added to their inability to manage risks on the projects effectively."

Without a good way to store data and documents, there was much inefficient transfer of information via word-of-mouth, fax, and disparate email systems. The cost per project was higher than normal in this environment as well.

Asking what kind of efficiencies could be gained within the organization, CBRE and the client forged a technology vision that pulled together the related players in the project management and facilities management arenas, giving them Web access and online collaboration. With such a focused project, it was possible to implement changes on a very small part of the portfolio and evaluate the results. The goal of the prototype effort was to determine whether the technology strategy, vision, and software would affect the way projects were managed, improve the reporting of results, and generate cost savings.

The trial produced both the tangible and intangible benefits of reducing staff, providing faster call center response, and delivering better client service. Electronic reminders generated by the system based on asset information already entered decreased the number of people involved in managing preventive maintenance work orders. Collaborative tools allowed more effective communication between the vendor and the project facility manager.

Similar advantages surfaced on the accounting side, with a reduction in the number of AP clerks processing invoices and an improvement in accuracy. Project costing reports were produced more quickly, with the added benefit of getting the right information to the right person at the right time. The collaboration tool streamlined construction management by accelerating communication and boosting team productivity. Purchasing was done in a more timely and efficient fashion through advance planning and consolidated orders to vendors. Overall, standardization reduced data entry and eliminated redundancy.

When the team that put the trial together identified the FTE reduction, the compression in cycle time, and the additional savings from better control, they came up with a very conservative estimate that by implementing the prototype across the portfolio they would be able to save $2 million dollars annually.

"It isn't so much a question of the system's price tag but of what that system can do for you," says Perkey. "So whenever we look at costs, we also need to determine what the value proposition is. This client did the cost-justification in a more informal way, but came up with a solution that, if fully deployed, would have covered the system cost within a year."

By Nicole Zaro Stahl

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Copyright 2008 Tradeline Inc.
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ISSN: 1096-4894