How can the costs of maintaining real estate be settled by particular business units? How can profits be allocated to particular branches and outlets? How can profitability of individual units, rather than the profitability of the entire organization, be measured? A standard ERP system is not capable of answering these questions. Hence, the use of a dedicated real estate management solution is required, such as SAP Real Estate Management (SAP RE-FX).

Hicron is an SAP Poland partner with the biggest team of SAP RE consultants with 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, heavy industry, petrol stations, energy and many others. The common feature of all these companies is a multitude of production sites, warehouses, branches or sales outlets located in owned or rented property. SAP RE-FX helps these companies 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. SAP Real Estate Management naturally integrates with other SAP ERP system modules, industry solutions and SAP BusinessObjects. It can also be integrated with external solutions which help to manage different areas of operation. Therefore, the solution facilitates the achievement of business objectives for companies from different sectors, depending on their focus. For example:

– Companies managing retail space in shopping centers use the solution mainly to settle lease agreements and manage their relationships with the service suppliers: utility companies, providers of maintenance or security services, etc.

– SAP RE-FX offers the possibility of automatic adjustment of the rental amount depending on the sales performance of the particular tenant.

– Restaurant chains use RE-FX to track the profitability of individual locations, by comparing the actual costs and revenues and allocating them to particular outlets.

– Developers can use the system to assess the profitability of particular investments and manage upgrade projects of 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 rental amount at a level that ensures the expected profit.

Coordination of business processes

Coordination of business processes in companies using SAP RE-FX is achieved thanks to the integration of the solution with the areas of fixed assets, finance and controlling, sales and distribution, project management, investment management, plant maintenance and HR.

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 customers and contractors working on the property. In such a case, it is possible to use SAP RE-FX to draft lease agreements, issue invoices to tenants and order additional maintenance work. 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 use an example of a company from the plastics industry for which real estate management is not a core business. The company, however, has a number of production plants located across the country and rents warehouse space. In addition to manufacturing, 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, a special tool was needed 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 production 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 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 staff about the need to conduct a technical inspection at a particular plant. Moreover, the solution can be used to allocate responsibility for ordering inspections, maintenance and repairs to particular people, and identify the required materials and financial resources. As a result, it is possible not only to record costs on a daily basis but also to keep a detailed schedule of conducted work, to facilitate its management, verification and documentation.

Managing fees

In addition to planning repairs and maintenance inspections, the company can also use the solution to manage franchising fees paid by franchise partners selling products under the company’s brand. The amount of 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 the SAP RE-FX solution which is integrated with the finance area, therefore the amount of fee payable can be calculated automatically and the generated invoice can be sent directly to the franchise partner.

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