Every Square Meter Counts

Feature Article | May 30, 2005 by admin

Even when a company’s core business involves the sale of goods, ever-smaller margins make it more and more important for retail companies to hold real estate with a strong infrastructure that offers convenient transfer centers and branches in attractive locations. After all, retail real estate is the place where supply meets demand.
However, numerous retail companies have no or an inadequate technological or organizational setup for this strategic process. The use of different, unintegrated systems forces redundant entry of data that is then mapped differently according to the requirements of each system; common access to systems is simply impossible. And many solutions are incompletely integrated into companies’ ERP solutions, which produces additional costs for interface management. Ultimately, the operating business lacks comprehensive mapping of business processes, such as managing contracts, renting or renting out property, and adjusting rents. This situation results in the need for tremendous effort between departments and locations for coordination and communication.

All Contracts at a Glance

Whether property or a location is rented, purchased, or built by a company itself, SAP Real Estate Management offers retail companies industry-specific functions that enable companywide access to real estate data regardless of the user’s location. A comprehensive role and authorization concept controls this access exactly, providing a transparent representation of all locations and objects.
This transparent representation begins as early as contract management. SAP Real Estate Management offers an option for flexible mapping of property that a company rents and for property that it rents out, sublets, or subleases. This option plays an especially important role for retail companies because the properties and their use can change on short notice. Consider the example of expanding a supermarket into a small shopping center by locating a bakery, restaurant, and other boutiques near the entrance. SAP Real Estate Management enables you to map these structures flexibly and to design the appropriate contracts, areas, and settlement of incidental expenses.
Contract management functions not only map the contracts in the structure, but also enable mapping of special agreements, such as agreements on rental revenue, index adjustments based upon the cost of living, or specific renewal agreements. Predefined clauses are used to create these agreements and assign them to the appropriate contracts. You can simply reuse agreements that occur frequently when you create a new contract.
Quick access to all contracts and contract details also helps when repairing rented objects because it’s important to have up-to-date information on any guarantees in force from the owner for technical systems when hiring technicians. The application also provides data on services like cleaning, repair, and maintenance at the push of a button. Integrated document management capabilities handle documents and correspondence stored on real estate objects and contracts. Adherence to specific dates is especially important in the management of real estate contracts. In particular, dates for contract renewals, notices, and rent adjustments must be adhered to strictly. The ability of the application to send reminders automatically helps a great deal here; it is ensured by the follow-up function in SAP Real Estate Management.
Comprehensive role and authorization control completes contract management. For retail companies, contract management contains extremely sensitive data that must be protected. As is also true of SAP R/3 as a whole, you can create specific authorizations and views of objects and contracts for every user in SAP Real Estate Management. You can also integrate external service providers so that they can perform specific tasks.

Perfect Integration with Business

The SAP real estate solution offers much more than just the ability to map all contracts relevant to real estate. It also integrates data from contract management into all related areas, such as accounting, for follow-up processing. Tight integration with accounting efficiently supports business processes like debit estimation, dunning, or rent adjustments.
In particular, the settlement of incidental costs and operating expenses is often complex and involves a great deal of effort for retail properties. Branch retail locations often include objects of mixed use that include a branch and one or more housing units. In such cases, companies must map the rental of the housing unit in the solution according to legal requirements. SAP Real Estate Management can map these kinds of mixed-use objects, including split-up of input VAT and the related settlement of incidental expenses.
For retail companies, real estate also represents a block of costs related to technical object management that must not be underestimated. In particular, significant opportunities for optimization exist for the effort involved in maintenance and modernization. The SAP real estate solution enables comprehensive mapping of technical equipment and the related processes, from notifying personnel of failures to hiring external service providers and confirming repairs. The system comprehensively maps processes, which guarantees transparent reporting – on maintenance costs or failure histories, for example.
The SAP real estate solution offers retail companies comprehensive reporting options, including report design and key figure generation. For example, you can integrate maintenance data with business data, trace trends in rental prices, and compare locations. You can also display these developments on a map so that you can permanently monitor and control branch locations with specific key figures.
In an integrated system landscape with exactly defined role and authorization concepts, integration with accounting and controlling, automated reports and functions for all processes relevant to real estate, SAP Real Estate Management offers an efficient instrument for strategic control of real estate objects.

Marco Hofmann

Marco Hofmann

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