REAL ESTATE MANAGEMENT
How to settle the costs of real estate monitoring to particular business units? How to allocate profits to particular branches and outlets? How to measure profitability of individual units apart from the profitability of the entire organisation? A standard ERP system is not capable of providing an answer to such questions. Hence, the use of a dedicated real estate management solution is required, such as SAP Real Estate Management (SAP RE-FX).
HICRON is a SAP Poland Partner with the biggest team of SAP RE consultants who have extensive experience in the implementation of this solution.
What are the target companies?
SAP Real Estate Management is a solution successfully used by companies from such sectors as: banking, retail networks, heavy industry, gas stations, power engineering and many other. The common feature of all those companies is a multitude of production sites, warehouses, branches or sales outlets located in owned or rented property. SAP RE-FX helps them to manage the real estate assets, reduce the costs associated with property maintenance and assess the profitability of individual branches and outlets.
The Power of Integration
Thanks to a wide range of integration possibilities, SAP RE-FX can be used not only by the users of SAP ERP but also by companies operating other ERP systems. The SAP Real Estate Management is naturally integrated with other SAP ERP system modules, industry solutions and SAP Business Objects. It can also be integrated with external solutions which help to manage different areas of operations. Therefore, the solution facilitates achievement of business goals of companies from different sectors, depending on their focus. For example, companies managing retail space in shopping centres use the solution mainly to settle the lease agreements and manage their relationships with the service suppliers: utility companies, providers of janitorial or security services. For example, SAP RE-FX offers the possibility of automatic adjustment of the rent amount depending on the sales performance of the particular tenant. Restaurant chains use RE-FX to track profitability of individual locations, by comparing the actual costs and revenues, and allocating them to particular outlets. Developers can use the system to assess profitability of particular investments and manage upgrading projects of the existing buildings. Retail space management companies can easily match the rent income with the costs generated by particular real estate assets, in order to determine the rent amount at the level ensuring the expected profit. Coordination of the business processes in companies using SAP RE-FX is achieved thanks to integration of the solution with the areas of fixed assets, finance and controlling, sales and distribution, project management , investment management, plant maintenance and HR management.
An important feature of the solution is its integration with the Microsoft Office software package. This functionality is particularly useful when the company uses the solution for communication with the customers and contractors working on the property. In such case, it is possible to use SAP RE-FX to draft lease agreements, issue invoices to the tenants and order additional maintenance works. It is also possible to generate dynamic reports which can be uploaded to Excel.
Case Study: SAP RE-FX in a manufacturing and trading company
Let’s take an example of a company from the plastics industry for which real estate management is not a core business. The company, however, operates a number of production plants located across the country and rents warehouse space. In addition to manufacturing activities, the company sells its products via a franchising network. Due to the volume of the real estate assets and the high value of related costs and revenues, there was a need for a special tool to manage the real estate and support the relationships with companies selling its products.
Due to the specificity of the production and the safety requirements which must be met, the manufacturing plants need to undergo periodical inspections. Prior to the implementation of the SAP RE-FX solution, there was no system which could support planning the inspections ahead of the time, therefore the deadlines for inspections had to be monitored on the daily basis. Thanks to SAP RE-FX and its integration with the Plant Maintenance solution, the system automatically generates alerts reminding about the need to conduct the technical inspection in a particular plant. Moreover, the solution can be used to allocate responsibility for ordering inspections, maintenance and repairs to particular persons, including identification of the required materials and financial resources. As a result, it is possible not only to record the costs on the daily basis but also to keep a detailed timetable of conducted works, to facilitate their management, verification and documentation.
In addition to planning repairs and maintenance inspections, the company can also use the solution to manage franchising fees paid by franchise partners selling the products under the company’s brand. The amount of the monthly fee paid depends on the value of monthly sales revenues. In order to facilitate and speed up the information flow, the sales companies communicate with the manufacturer via dedicated web portals available within the framework of SAP RE-FX, in order to report the sales results. The data are uploaded directly to SAP RE-FX solution which is integrated with the finance area, therefore the amount of rent payable can be calculated automatically and the generated invoice can be sent directly to the tenant.
