Facility management software increases the pace and ups the ante in this increasingly competitive industry Globalization has come to facility management and, with it, a sea of change is engulfing the sector. No longer are firms merely content to plod along. Instead, the industry is changing and, with it, facility management software also is being transformed as well.
"Basically, what we're looking at is a major change for facilities managers," says Sheldon Pfeifer, national real estate account executive with J.D. Edwards World Solutions Co. based in Denver. "And, with some of the largest facilities managers as our clients - CB Commercial/Koll Management Services, LaSalle Partners, Lincoln Property Co. - we have a fairly good idea where the industry is headed."
Pfeifer says the industry is seeing a big switch in companies' focus. Before they were intent on being service providers. "Now the attitude is, 'There are a ton of service providers.' What the new focus is on is value-added, and that's due to a huge consolidation taking place in the facilities management field," he continues. "These new large organizations are looking to take advantage of economies of scale and globalization."
It's important today to add value effectively, efficiently and visibly, he adds Effectively means doing it daily; efficiently requires a lean and mean machine to take advantage of economies of scale; and to perform visibly, companies have to visibly market their services and show that those services are adding value.
"So now, facilities managers look at things like space management and operation costs," says Pfeifer. "How do you factor into the overall real estate strategy of a worldwide corporate organization? How much does it cost to move someone from one office to another, or how much to service a work order a tenant requests?" says Pfeifer. "Companies are forming general or key performance indicators. Benchmarking is a hot topic, and it goes back to adding value. If a standard comes in the industry - say it costs 'x' to change that light bulb - then facilities managers are going to say, 'We can do that at a less expensive rate,' thereby increasing the value."
The key is cutting-edge software, he adds. "At J.D. Edwards, we emphasize integration. We can integrate FM operations, like tenant service work orders 'how much does it cost to change that light bulb' into units at the property, regional and global level," he continues. "With a single-source entry, a person hits a key once, and the data flows all through the system - not only approving the work order, but providing accounting and financial reporting, depreciation and so forth. No double entry is needed, which is much more efficient."
At the same time, because facility management is going global, expanded software to handle those international needs is now being offered. "LaSalle Partners, for instance, has clients that do business around the world, and our software can handle it," he continues. "In the U.S., of course, the dollar is the important currency, but as FM providers go global, multi-currency and multilanguage support are essential. Because J.D. Edwards does business in 95 countries, our clients are secure in the fact that they can add value, no matter what the location, to their clients' real estate portfolio."
More consolidation and globalization means the facility management business will become more cutthroat, he adds, "and companies who will be successful will be the ones that can take advantage of a system that can handle globalized needs, provide scaleabilty, and handle 500 users at one time. You can't worry about the system crashing when user No. 501 comes on line."
Kit Tuveson, the facility operations manager worldwide for the Hewlett-Packard Co. in Palo Alto, Calif., points out that the pace of business today requires fast, flexible and economic processes to manage workplace change. "Facilities management and real estate professionals can leverage their time through effective utility of software tools," he says.
Tuveson, who is also chairman of the board of the International Facility Management Association based in Houston, notes that yesterday's frustrations of expensive drafting services, manual work orders, card files, etc., are now eliminated with computerized applications for asset management, space planning, preventive maintenance, regulatory compliance and so forth.
"The end result," he adds, "is quicker response time, higher quality solutions and less cost associated with facility management/real estate products and services."
One of the needs driving facility management software is the ability to pass occupancy accountability back to business units, says Eric Teicholz, president of Graphic Systems Inc., a Cambridge, Mass., firm (http://www.Graphsys.Com) specializing in facility management consulting and management and systems integration. There is an increasing linking of technology and the actual charge for real estate.
"Today there is CAFM software that lets you track various types of costs associated with space and allocate them to business units to generate invoices or utilities, rent, depreciation and so forth," he explains. "The driving force behind this is that facility managers are getting requests from management to track costs and assets by business unit, so management can make a more informed decision on what are the costs of different operational groups. The actual costs for real estate are increasingly being charged to business units and are being tracked via software."
Teicholz adds that facility management data is just coming into a marriage with the other legacy systems in a company. "It's tied to life cycle costing - developing a matrix to determine what kind of investment is required over the life of the physical plant," he explains. "In the real estate world, companies make acquisitions and then dispose of them, but up until a short time ago, they didn't really have much software other than some simple database applications that can track lease variables."
Another interesting FM software development relates to Computerized Maintenance Management Systems (CMMS). These systems increasingly integrate with space and asset management software (e.g., provide for the ability to write a work order and schedule staff from a move-management application).
Additionally, there are links being developed between building automation systems and CMMS systems whereby, for example, a PM work order can be generated in a CMMS system by automatically taking readings from various meters or motors.
A final technology trend relates to the increasing support of the World Wide Web for both reporting and application development. Most CAFM systems can now publish directly on the web, and an increasing number of vendors are actually moving their applications to the web. Finally, vendors are employing GIS technology for being able to drill down and report on web-published data.
In addition, he adds that there is a strong migration to the web, with a number of companies publishing applications on the web linking the GIS and FM world for Executive Information System (EIS) query and reporting purposes.
In general, FM technology is maturing rapidly and being deployed throughout the organization. Management no longer asks if this technology is relevant but "What's it going to cost?" and "How fast can it be deployed?" and "How can we link FM to our financial and human resource systems so that financial and occupancy information can be linked to the space, asset and work management systems?"
Ron McComas, vice president/marketing at Cleveland-based Management Reports Inc., notes that changes in the industry are putting more pressure on developers of facility management software.
Property managers who used to outsource facility management are now adding the facility management function to the list of services they provide in order to differentiate themselves from competitors and to increase revenue opportunities.
"Interestingly, more property management companies are now offering a full gamut of services," he explains. "Spurring this is pressure on management fees at all levels," he adds. "And with the consolidation in the industry, competition has increased. Once strictly focused on property management, they are now getting into asset management and operational facilities management. As a result of that, there is pressure on software developers to offer a greater range of software products to embrace those services."
Historically, facility management or work-order software offered by developers of property management systems could cut work tickets to fix a leaky faucet, do build-out work, etc., he adds. But their primary focus was on the accounting side. This approach does not satisfy the needs of companies offering full-service facility management. The "old style" facility management software, which simply generated work orders and tracked labor and parts costs, doesn't fly any more. "At MRI, we were convinced several years ago that we had to evolve our facilities management software so that it supports both sides - the accounting side and the operational management side," he continues.
With MRI's Facility Manager, for instance: "We have a product that combines standard work order requests with comprehensive preventive maintenance functionality. We now give clients greater tracking ability. The software provides a detailed task library which standardizes jobs, costs and time requirements. Say the air conditioner needs its six month checkup. The system says, 'It's time to do preventative maintenance for this air conditioner and here are the steps, Mr. Engineer, that you need to take. Please verify that you've done it by scanning the barcoded work ticket.' The system automatically calculates labor and materials charges and adds markup and taxes and posts tenant charges and updates tenant balances," says McComas. He points out that "previously, work order software from property management software developers focused on the accounting side of the activity. Now it's important to offer functionality that addresses the needs of both the building operations people and the accounting staff."
In addition, MRI is moving its entire product line from a DOS format to a Windows environment. "Using the Graphical User Interface conventions, offered by Microsoft's Windows operating systems, allows us to provide improved ease of use to building maintenance people whose primary focus is to provide facility services, not to operate a computer," McComas says. "So ease of use and user friendliness are critical."
Bruce Kenneth Forbes, a founder and president of Archibus Inc. in Boston, agrees that facility management has become global, and new software products have been introduced to deal with this new reality. "In the old days, a large financial organization would have offices divided into a number of regions and each would have activities to manage," he explains. "But now companies may still have a regional manager, but the database is in a central environment, rather than a separate system at each office. It's sort of like the telephone companies used to have lots of switching stations, but now they don't because transistors have replaced them."
Forbes' firm's product, Archibus/ FM, has 50,000 users, he adds, representing clients managing 1.4 million buildings in their portfolios with 16 billion sq. ft. Currently Archibus/FM has about 66% of the market share, and the company expects a 400% growth over the next year or so because of consolidation in the industry as large Fortune 500 companies automate regional centers and manage those facilities from other locations.
"Many universities and colleges are going into a virtual environmental and will reduce spatial needs by 40% to 50%," he continues. "We have 1,400 colleges that use our software, and a lot of them are subletting space, turning their properties over to others because the space can't be cable-enabled."
Systems are also becoming easier to learn. "It used to be with the old CADs it took one to five days to train and two to three weeks to learn," Forbes says. "Most of the people who belong to IFMA, for instance, are so busy they don't have time to learn 15,000 different things. So software is becoming more user-friendly. Archibus can click less than six buttons to find certain information for executives who are able to customize it their own way," says Forbes. "Executives are able to drill down to the information they require with just a few keystrokes. In addition, real estate companies used to buy their own programs, which sometimes took 18 to 36 months to write. Now they can buy software off the shelf."
As facility management becomes more important in the corporate decision-making process, and as more executives depend on more up-to-the-minute data and can provide it thanks to new and improved software, facility managers are becoming more important.
"All of a sudden, facilities managers are becoming the proponents of change," he adds. "They have more information at their finger tips. Now real estate facilities people are becoming like IT (information technology) people. CFOs are involving facilities managers more in the decision-making process, because with better knowledge, they can theoretically make better decisions."
What is facility management? It is perhaps one of the most misunderstood - and perhaps most vital - sectors of the real estate industry.
A distinct management function, facility management involves a well-defined and consistent set of responsibilities. Simply stated, it is management of a vital asset, the organization's facilities.
As defined by the Library of Congress, it is the "practice of coordinating the physical workplace with the people and work of the organization, integrates the principles of business administration, architecture and the behavioral and engineering sciences."
According to the International Facility Management Association, based in Houston, facility management combines proven management practices with the most current technical knowledge to provide humane and effective work environments. It is the business practice of planning, providing and managing productive work environments.
"Strong central threads of 'quality of life' and 'cost effectiveness' run through the technical components of the profession," the association adds. "In most cases facility managers are the 'generalists' that manage a variety of 'specialists'. These `specialists' are either consultants or in-house staff who perform the job responsibilities of facility management."