A sector on the move

Feature Article | September 5, 2005 by admin

More than 500 participants traveled to Potsdam, Germany to attend this year’s 8th SAP Congress for the real estate industry on June 21 and 22, 2005. This was the first time that the former GDR city had hosted the event, which was jointly organized by SAP and T.A. Cook. With talks and information booths from SAP and SAP partners, congress delegates ranging from administrators, proprietors and facility managers right through to real estate fund managers had the opportunity to see first-hand the latest developments and trends and chat with experts from the sector.

Greater openness in structures and processes

In his keynote speech, Volker Zimmermann (SAP AG) gave a brief overview of the latest SAP trends and introduced his audience to Geoffrey Moore’s concept of “Core” and “Context”. Core is anything that contributes directly to competitive differentiation – companies must permanently set themselves apart from their competitors through innovation. Context is everything else – all the things that a company must do to pass muster but which do not differentiate it from others on the same market. Here, the focus is on increasing productivity by standardizing processes.
The latest SAP innovations are ideally suited to achieving the two objectives of Moore’s concept – innovation through differentiation and productivity through standardization and automation. The interplay between the SAP NetWeaver technology platform, the Enterprise Services Architecture (ESA) and the SAP solution mySAP ERP offers companies a sound framework for success. Instead of wasting time on technological side issues, companies can concentrate on their key business objectives. In the real estate sector, this covers the entire lifecycle from construction, purchasing and renting right through to leasing or sale including technical and commercial management and controlling.
The special features and functions of the SAP Real Estate Management solution integrated in mySAP ERP were unveiled by Christian Krämer (SAP AG) in his plenum speech. Master data from contracts, land registers and real estate registers is just as important as the analyses and reporting tools in achieving effective contract and real estate management. The comprehensive overview of the entire real estate portfolio enables identification of company-specific KPIs which offer greater transparency and an improved basis for business management decisions. The combination of data relating to contract periods and prospect management leads to properties being rented out faster and shorter voids between rental periods, thus reducing the risk of lost rental revenue.
All the processes relating to contracts, including subsequent processes such as postings can be speeded up and standardized with the help of SAP Real Estate Management. The same applies to purchasing and service management from service inquiries through to commissioning and billing. Improved monitoring of service provision assists in controlling costs and planning budgets so that properties can be maintained in an optimum condition. Integrating CAD/GIS systems is also proving to be a useful new component in establishing a sound contract and real estate management system. This enables easy visualization of architecture or register data relating to the individual properties.

Greater openness for staff

Lothar Rieger’s (SAP AG) keynote speech focused on the issue of Enterprise Services Architecture (ESA) and the benefits of SAP Real Estate Management in employees’ day-to-day work. Faster access to information and services, an improved overview and a more concentrated approach to the tasks in hand are ensured as a result of a more automated, task- and goals-based approach. A role-based portal with the “Control Center” as a transparent “website” and work centers or cockpits for managing processes means that all employees have appropriate access to the applications they require.
As well as work loads, the inboxes contain up-to-date to-do lists and reports of discrepancies in important data and processes. Users no longer have to scramble around looking for information. It now appears directly on their screen (“push principle”). Workflows can be customized, working with forms is facilitated and graphic illustrations and the intuitive design all support visual recording of important information. The ease-of-use of this working environment will be further improved in future thanks to two new developments. Firstly, Microsoft and SAP have teamed up to develop a product named Mendocino which provides a link to Windows Office. Secondly, the integration of Macromedia Flex enables the creation of intuitive user interfaces for SAP solutions in SAP NetWeaver 2005.

Ideally suited to a range of business management tasks

In addition to the keynote speeches, there were more than 25 other speakers who inspired the delegates with a host of new ideas for the sector. Visitors attending the congress were provided with a wealth of information on SAP Real Estate Management. The talks discussed issues such as migration from SAP RE-Classic to SAP RE-FX, management of real estate and residential properties in mySAP ERP 2005, and the new reporting options.
Some of the more practice-oriented talks also gave examples of applications. The real estate management section of the German federal real estate authority explained how properties could be managed across their entire lifecycle from purchasing the property and facility management right through to disposing of the property – including LUM master data, i.e. parcels of land with assessment notice, development planning and all the additional data required, as well as RE master data, i.e. all properties with economic unit, rental unit, contractual data and data relating to business partners. The presentation about Gesobau AG demonstrated the opportunities for active company management. KPIs, risk indicators and thresholds, benchmarks and balanced scorecards can be used in portfolio management to identify both potential and problematic properties. ROI analyses establish a sound basis for investment decisions.
One example of an application in the retail sector and its various branches was provided in the talk by a representative of tegut-gute Lebensmittel. This retailer utilized SAP Real Estate Management to create a solution for an integrated facility management system which uses the full range of master data to ensure more efficient maintenance, repair, rental contract management and billing of incidental costs. The technical and commercial facility management departments now work in close cooperation with each other and the processes which involve interaction between different departments such as materials planning, shop construction, expansion, financial accounting and controlling were optimized.
The possibilities for real estate fund management were also demonstrated using the example of WestInvest GmbH, where SAP Real Estate Management was introduced to handle funds statement and real estate management tasks. In this case, it was necessary to map the accounting data for WestInvest and two subsidiaries with a total of 175 economic units, 5409 rental properties and 1949 business partners as well as 700 general ledger accounts, 1790 accounts receivable and 4702 accounts payable. Four open real estate funds and five real estate companies in total had to be integrated. It was also essential to take into account national and international tax legislation such as construction withholding tax and sales tax option rates including input tax allocation. A further element essential to the solution’s successful introduction was the process for producing day-end accounts which enable daily fund unit prices to be calculated.
The congress program featured a whole range of other talks on trends, highlights and solutions specially designed for SMEs. Powerful solutions which enable the sector to adapt flexibly to future changes on the market were presented for a number of business management tasks and requirements.

Petra Winkler

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