Lucernex expert and President Joe Valeri (see Joe’s management summary here) discusses how integrated sales prediction modeling improves an IWMS.
There are many vendors of real estate software to choose from today. There are vendors that provide individual solutions for mapping and GIS technology, modeling technology, transaction management, site selection and project management technology and there are several vendors that provide individual applications for facility management and maintenance technology. Firms possessing multiple locations can choose to buy one application at a time selecting the “best of breed” to meet each major set of requirements. For example, it is very common for the construction department of multi-location firms to buy a construction project management system purely to meet that very specific need while the real estate department might choose a lease administration solution and a mapping solution and the facilities group selects capital projects and facilities maintenance applications. The groups buy based on a singularly focused set of requirements pay a fair price and implement their technology.
While “best of breed” buying may seem like a great solution, as time passes four common problems appear.
First common problem: When executives or IT (or both) decide the applications need to be integrated to avoid duplication of data and manual data entry and reentry; since each system likely has an address for each location, the company may have multiple systems of record for the same locations causing confusion and a lack of faith in all systems. And the location is just the beginning of the problem. As these systems are all involved in many common processes related to budgets and schedules, a great deal of data has to be managed across cross-functional workflows that span multiple “best of breed” systems. Integration then requires involvement of multiple vendors who, very often, don’t want the other to see their applications.
To make matters worse some of these applications may be Web-based and hosted outside of the company firewall while others may be internal browser based solutions or client/server applications. Managing multiple integrations to multiple systems, in multiple programming languages across multiple platforms suddenly becomes a spider web of complexity costing much time and money and often ending in failure.
Results: much higher cost, disparate data, multiple systems of record, loss of true real-time data, much longer time to achieve benefits of location performance management and a whole lot of finger pointing between multiple vendors and no one to hold accountable.
Second common problem: Getting staff to use the system and use it effectively. None of these systems benefit the company if they are not used or, worse, if they are used incorrectly. As many staff members and vendors may actually be involved in processes across different areas of your company, they will be asked to use multiple systems (often with different names and addresses for the same locations!). By having multiple applications from different vendors you now have multiple different user interfaces with different navigation, terminology, look and feel and overall use philosophy. As a lifelong designer and architect of software and user interfaces I can tell you no two of us thinks exactly alike (unless you work for MSFT and have no choice).
Users have to go to multiple trainings to learn multiple new systems; and you know how much real estate, construction and facilities folks LOVE to learn new technology!
Results: Having multiple “best of breed” products may result in poor uptake of the system across the enterprise and, in some cases, even when it is used it is not used well providing “dirty” data that may be used to make critical decisions. Training is constant and every change of staff requires months of training on multiple systems.
Ok, so let’s say you get passed the two problems above and now you want to integrate your “best of breed” system into the overall company financial system, often SAP, PeopleSoft, Oracle, JD Edwards, Great Plains, Lawson, etc… It took you three years to get your “best of breed” solutions integrated to each other and the vendors have stopped blaming each other and are now instead all taking 100% of the credit.
Third common problem: You begin the ERP integration only to realize that you will have to build multiple redundant and sometime chained (multi-step integrations involving many applications in a particular order to complete a single process) integrations.
Tracking the total cost of a location development and then maintenance over time to be able to compare to revenue and come up with a real calculation of the value the location is producing requires data from all of your vendors’ systems at different times. The same goes for tracking where and how location revenues are impacted by capital projects or new development or remodels or even dispositions. All of these everyday processes involve different “best of breed” systems at different times in the lifecycle. So, to integrate to an ERP or any other system you will need to expend much investment, much time and, again, endure finger pointing across multiple vendors as to who caused the delay in one of the 50 integration points due to a missed email.
Result: even more cost, more confusion, more finger pointing and years of project management to try and know how much your locations really cost and how long they take to become optimal.
Fourth common problem: The worst problem with combining “best of breed” solutions happens when one or all of the above problems causes a failure in implementation of some or all technology attempted; it is a loss of faith in real estate technology.
Now I am someone who has made my life all about making real estate technology so you would say “of course that is what he thinks is the worst problem”. But, it really is the biggest problem for all as a loss of faith in real estate technology often results in many years of negative feelings about trying a new technology and provides the change-averse crowd with the ideal rebuttal for anyone suggesting a new system investment – “we tried that already and it cost us millions and set us back years; why try it again?” That’s a hard argument to overcome.
Result: years of your competitors gaining or surpassing you as the bitterness from past real estate technology failures weigh on the organizations ability to do it right.
Now here is the part where I tell you how IWMS solutions solve all these problems easily – except that is not true either. While all vendors talk about having the ONE solution to manage all of your location related processes, none of us have one solution that fits everyone. And some IWMS vendors also don’t really have ONE solution anyway; they have a bunch of solutions they bought or licensed from others that they deliver as “one” solution but in reality is simply a “best of breed” solution (that may not actual be best at everything) from a single vendor. In some cases these disparate solutions are tied together by common reporting, dashboard or work flow solutions (also from other vendors) but, under the covers, are actually multiple databases and platforms with multiple programming languages in use across multiple business logic tiers. While this does avoid some of the finger pointing issue, it does not solve the other problems.
There are two key lessons to take away from this Blog:
1. “Best of Breed” application selection may seem cheaper and easier in the short term but it almost always costs far more and diminishes the competitive advantage of your real estate technology over time.
2. Even the “fully integrated”, “single source of truth” IWMS solutions are not always really one solution from one vendor!
As always ASK QUESTIONS of your IWMS like:
1. How many databases does your IWMS use?
2. Does it require multiple web servers?
3. Is it JAVA, .NET, VB or all of the above?
4. How many different code bases are involved?
5. How many development teams do you have and how do you separate their duties?
6. How many other companies and solutions are part of your IWMS solution?
Shameless Plug
Lx IWMS Location Performance Management solution is a single solution, from a single vendor, using a single code base and database. We developed all of our own code and, with the exception of our recent partnership with Buxton, deliver 100% of our solution on our servers, using our code that we created and manage. Integration across the lifecycle is built-in since the entire application was developed on the same code base by the same development team since May of 2000. Integrating to ERP’s is something we do on nearly every project and, in fact, have created a built-in (same code base and database) solution for web-based and local data integration using flat files or web services called the Lx Messenger. Even clients can use this utility that comes with Lx IWMS to build real-time or scheduled integrations to any other system.
With that said, we, like all other vendors, don’t do everything better than everyone else (but don’t tell our Board of Directors that). A customer at now defunct Circuit City in 2004 said something to me that stuck – he said (I am paraphrasing as it was along time ago and I may not remember the exact words) they selected us because we got an A, A- or B+ in every category they required.
Even though there were “best of breed” solutions that were “A’s” or “A+’s” in some areas, he realized that those slight differences in features did not come close to overcoming the value of buying one solution from one vendor that did everything.
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Previous IWMS related Blogs
What is IWMS anyway?
IWMS? It’s Location! Location! Location!
The Power of Location Management
IWMS – Why so expensive?