Getting a Handle on Real Estate

Feature Article | September 19, 2007 by admin

The scope of tasks to be handled is enormous. Deutsche TeIekom Immobilien und Services GmbH (DeTeImmobilien) manages 64 million square meters of space and 35,000 properties for its customers. Customers include the companies of Deutsche Telekom and external companies, such as Deutsche Immobilien Chancen, GE, and TishmanSpeyer. The scope of its managed holdings makes the subsidiary of Deutsche Telekom one of the largest real estate service providers in Germany. And the company wants to grow even larger. Its goal is to become the leading real estate service provider in Europe.
DeTeImmobilien holds its ground in a challenging market. The growing importance of real estate as an investment increases the expectations for profit. At the same time, real estate holdings that are built, sold, or rented as long-term capital investments demand a great deal of legal, business, and technical effort to guarantee successful and long-term occupancy. Efficient information and control tools help develop an ideal investment strategy and control the real estate portfolio economically.
That’s why DeTeImmobilien decided to implement a new solution for real estate management in the middle of 2005. The legacy software, the corporate real estate functionality of SAP R/3, no longer met the company’s needs for flexible real estate management. The announcement that SAP would stop maintenance and further development of the functionality in January 2007 forced the decision to migrate.

Functionality and flexibility as triggers

The selection of the new solution quickly focused on the SAP Real Estate Management application because DeTeImmobilien uses SAP ERP. The decisive arguments for choosing SAP Real Estate Management were the comprehensive functionality and the flexible space and contract management that the application offers. The application also helps the company take account of the complex structures and differing space needs (management, technology, or warehousing), adjust the types of space to the needs of users on short notice, and map requirements throughout the company.
SAP Real Estate Management handles German and international rental and tax law and is scalable for companies of all sizes and for corporate services. The software supports the plans for growth at DeTeImmobilien and enables it to address different companies as customers.

Solid basis for a new software platform

DeTeImmobilien had two goals with the implementation of SAP Real Estate Management. First, it would integrate the application with SAP ERP to manage the real estate of Deutsche Telekom more efficiently. Second, SAP Real Estate Management was to serve as the basis of a new service platform called REM@on. The platform helps both internal and external customers manage commercial properties more economically. Customers do not have to develop, operate, or purchase their own service platform – which takes a lot of time and money. They can simply access the service portal online.
REM@on also delivers informative reports, events, and key figures for the entire usage period of a property. One unique feature is benchmark-enabled reporting for facility management for customers. The platform uses the criteria of best-practice solutions that it has stored to define other criteria to improve efficiency and effectiveness.

Handling one of the largest migration projects

In the first phase of the project, DeTeImmobilien produced a prototype that covered commercial real estate management, rental accounting, and optioning. DeTeImmobilien then performed a test migration of the real estate master data from its old software into SAP Real Estate Management. Based on the prototype, the company then developed a migration plan.
For the changeover, DeTeImmobilien engaged CSC, an IT consulting and service firm that has a great deal of experience in SAP Real Estate Management migrations. DeTeImmobilien benefited greatly from this knowledge because the switch to SAP Real Estate Management was one of the largest migrations projects in the German real estate industry: 40,000 locations with 60,000 businesses, 100,000 buildings, 645,000 properties and lots, 390,000 rental properties, and 290,000 rental contracts.

Mapping a wide spectrum of processes

SAP Real Estate Management had to be configured to handle a wide variety of processes at DeTeImmobilien: master data and contract management, settlement of ancillary costs, rental accounting, and pretax preparation. For example, Deutsche Funkturm Management GmbH, a Deutsche Telekom subsidiary, maps the rental of transmission towers with SAP Real Estate Management. The antennas take up hardly any space at all because they are installed in or on existing buildings. They are usually sublet with an electrical connection to Deutsche Telekom and other broadcasters. The software has to guarantee external invoicing and internal cost settlement.
For the migration, the CSC consultants first worked with user departments to decide which data was to be transferred. The actual migration began with a field mapping and recoding process in which CSC defined how to assign the SAP Real Estate Management fields to the legacy data and how to convert the individual values. The team then developed the data transfer programs. Three test migrations, performed in concert with the user departments of DeTeImmobilien, clarified the need for optimization and adjustments to the software. Some data inconsistencies needed to be cleaned up.

Training for 1,500 users

Because of the extensive testing, the start of production in January 2007 encountered no problems. The changeover did not create any problems for employees. In just three months, more than 1,500 users learned how to work with the new application. The early, intensive involvement of employees from user departments meant that the software was well accepted right from the start.
SAP Real Estate Management has proven itself since its installation. The application manages complex data and does so in consideration of the subject and technical requirements of Deutsche Telekom companies and of external customers. Validation rules and automated processes handle procedural peculiarities in master data maintenance. Group-specific requirements for the data model were mapped with Z fields.
Users appreciate the clear structures and the improved graphics of the software, which make it easy to work with SAP Real Estate Management. The ability to expand the application is another plus. Additional solutions can be integrated without problems in the future, including the SAP NetWeaver Business Intelligence component for optimized reporting. With SAP Real Estate Management, DeTeImmobilien has significantly improved the quality of information availability and processing. It has optimal control of its real estate portfolio, and it is well equipped for the future.

Peter Kruse

Jürgen Rasche

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