The following was re-posted with permission after its publication on July 1, 2010 in the online outlet, IWMSnews >>> http://www.iwmsnews.com/2010/07/the-window-of-opportunity-in-the-iwms-market/ as a Guest Editorial
In a recent post entitled, “The Convergence in Corporate Real Estate,” (6/21/10) I cited three dynamics that will present challenges and opportunities for the (Integrated Workplace Management System) IWMS providers in the coming months creating a window of opportunity.
Each of the following elements on their own offers unique challenges but, the combination of them will create a critical need among corporate real estate departments to respond or they will lose opportunities to contribute meaningful value to the organizations they support.
- The intensifying focus real estate will receive from the C-Suite as a result of the FAS13 changes coming into effect in January, 2012 that will capitalize future rent obligations bringing millions/billions of dollars onto the balance sheet;
- The increasing need for organizations to reduce real estate related operating expenses thru lower occupancy costs; and,
- The desire among corporate leaders to achieve environmental sustainability through LEEDS certified design principles, effective energy management and building efficiency.
Above all, companies will need to access reliable, real-time actionable business intelligence if they are to comply with changing regulations and keep up in measuring and managing their companies real estate portfolio of leased and owned assets.
IWMS providers will have a relatively short window of just 18 months to define what that can provide, communicate their unique selling propositions and develop a “rapid to deploy” model if they are going to be successful.
Companies will be faced with a decision to utilize either their ERP, IWMS, a point solution, “do nothing” or employ the rapidly acceptable alternative of “cloud computing.” Each strategy has its own Pros and Cons.
Enterprise Resource Planning (ERP)
PROS – Large installed base with a great deal of investment by the company who would have a strong desire to have all real estate rent rolls, depreciation schedules, occupancy cost data and work processes integrated as part of the company’s general ledger.
CONS – High cost to deploy and in most cases limited functionality to address the day-to-day operations in automating space management, work orders, move management, etc.
PROS – Better suited to address repetitive work processes and a higher level of adoption and usage at the facility level. In many cases, the IWMS is the system of record for CRE and facilities personnel who are collecting the data at the property level.
CONS – Lack of integration with the GL to achieve portfolio-wide financial performance data. Will likely cede the financial aspects of leases and depreciation over to the GL and remain the system overseeing the operational aspects in the life cycle.
PROS – Fastest and most cost effective alternative to deploy.
CONS – Lack the robust functionality demanded by today’s larger, companies who are challenged to gather/report consistent data across the entire enterprise.
PROS – Least cost alternative.
CONS – Puts the company at grave risk with a failure to comply and loses valuable opportunities of collecting occupancy cost data in order to implement initiatives to reduce operating expenses.
PROS – Focuses comprehensive information to ‘executive dashboard’ summary level, real time information. A very cost effective approach that leverages investments made-to-date and combines financial data from the GL with work process functionality from IWMS systems and point solutions.
CONS – May require involvement from consultants and IT architects to create a seamlessly compatible platform.
In light of these alternatives and the limited time/resources companies have to collect, measure and manage the data the challenge will fall to the IWMS provider to define, develop and execute an effective go-to-market strategy. IWMS providers MUST have depth of functionality in full life cycle operational management; detailed and rolled-up occupancy cost data and work processes; and, a tightly integrated environmental sustainability offering.
The good news is that this convergence in the market now brings every FORTUNE 1000 company back into play as a prospect and could provide a HUGE boost for those technology companies who are agile enough to get in front of the right decision maker, articulate their value proposition and, most importantly, deliver a solution in the old adage, “on time and on budget.”
The question becomes, are you ready to seize the moment in this limited window of opportunity?