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PeopleSoft Real Estate Management Overview Part 8: More Lease Controls & Options

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Editor’s note — here are all the posts in this series for easy reference:

Hi again, everyone. We’re going to pick up where we left off last week, which means we’re doing to dive into more lease controls within PeopleSoft Real Estate Management (REM). Up first: Percent Rent.

Percent Rent

The Percent Rent option enables you to utilize leases with variable rent based upon user defined formulas.  It also allows you to create a lease with both a variable and a fixed and portion.

As outlined in PeopleBooks, Percent Rent enables you to negotiate a lower monthly base rent in exchange for a portion of tenant sales using thresholds. More specifically as sales amounts reach specified thresholds, called breakpoints, the percentages can be set to change, thus altering the amount of the final rent amount over a range of sales outcomes. For a breakpoint, the rent can be a fixed amount, a percentage of sales, or a combination of fixed amount and percentage.

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Region codes

Regions may or may not be physical entities or geographical areas.   As delivered, Real Estate Management allows you to classify leases by different user defined Region Codes which are then further classified by Region Categories.

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User Defined Fields

Because different businesses have different reporting needs, Real Estate Management offers up to 10 user defined fields to meet your organization’s reporting and analytical requirements.

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Economic Index

You can set up the economic index values so that lease rent amounts or miscellaneous fees increase from time to time or from year to year based upon a pre-stored index. You can load established index values such as the Consumer Price Index (CPI) or create your own index.

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Manual Fee Types

You can create Manual Fee Types to classify ad hoc payments for things such as repair of a broken window, rekeying a lock for an office, or items not related to the monthly operating expense fees.  Additionally you can use Manual Fee Types to specify special transaction processing rules in PeopleSoft Billing or PeopleSoft Payables.

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Operating Expense Categories

You can create Operating Expense Categories to classify recoverable expenses that are incurred for general operations and maintenance.  Operating expenses are also commonly referred to as common area maintenance (CAM).  Just as with Manual Fee Types you can use Operating Expense Categories to specify special transaction processing rules in PeopleSoft Billing or PeopleSoft Payables.

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Approval Workflow Framework (AWE)

With version 9.1, Real Estate Management System now leverages PeopleSoft Approval Workflow Framework (AWF).  Delivered Real Estate workflow functional areas (setup at BU level) are listed below.  In addition these approval processes can all be configured to meet specific and detailed business requirements:

  • Lease Status Monitoring
  • Sales Amount Monitoring
  • Operating Expense Monitoring
  • Lease Clause Monitoring
  • Critical Date Notification
  • Transaction Queue Monitoring
  • SAR Approvals
  • SAR Finalization

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This concludes this week’s Real Estate Management overview.  Though we covered numerous General Definitions and Financial Terms setup options, we only covered a very brief cross section of the available system functionality.  We also discussed the Site Acquisition Process (SAR) and Approval Workflow Framework (AWE).  In our next Real Estate Management overview we will discuss further details on Payables and Billing integration, Operating Expense Audits and Reconciliation, and Security Deposit functionality.

Until then, see you next time. Thanks for reading, and as usual, please don’t hesitate to reach out with any questions.

An Executive Summary of Oracle’s PeopleSoft FSCM v9.2 Release Value Proposition (RVP)

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Oracle’s PeopleSoft ALM, ESA, FMS, SCM, and SRM Release 9.2 Release Value Proposition

In July of 2012, Oracle published their Release Value Proposition (RVP) for PeopleSoft FSCM release 9.2. You can download it here (as usual, you’ll need your My Oracle Support ID to access the document). Like we said about HCM 9.2, we anticipate the general release of PeopleSoft FSCM V9.2 sometime early 2013.

The RVP is 117 pages. For the sake of summarization, we have analyzed and condensed the salient points from the FSCM RVP into a two-part executive summary.

Part I provides a bullet-pointed summary of the Financial Management Systems (FMS) and the Enterprise Services Automation (ESA) portions of the RVP.

Part II provides a similar easy-to-read summary of the Supply Chain Management (SCM) and Asset Lifecycle Management (ALM) portions of the RVP.

Please enjoy and share with anyone who might be interested in what the PeopleSoft FSCM 9.2 suite will bring to the table next year.

PeopleSoft Real Estate Management Overview Part 7: Site Acquisition & Lease Controls

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Editor’s note — here are all the posts in this series for easy reference:

Welcome back to the PeopleSoft Real Estate Management (REM) overview series.  In our last few overviews we discussed creating, amending and maintaining leases. This week, we will first talk about the Site Acquisition process, which are the steps that precede creating a lease, and second we will talk about some of the lease controls and options in a bit more depth. Off we go.

Site Acquisition Requests (SAR)

In our creating leases overview we discussed the steps of creating a lease directly into Real Estate Management.  In this overview session we will discuss the Site Acquisition Request functionality which allows you initiate, analyze, compare and approve prospective properties as part of the leasing process with-in the Real Estate Management application.  Through the SAR processes, once you have selected your property, the SAR process will automatically create your lease.  Now let’s take a deeper look at the details.

The SAR process includes role-based functionality to initiate and approve the lease acquisition process.  Once the SAR has been approved and activated, users can create a Comparison Matrix using their choice of attributes to rate the proposed sites.  Users can then rate each attribute on a scale of 1 to 5; 1 being the least suitable and 5 being the most suitable.  Once properties have been rated across the various attributes, the final scoring process can begin using the delivered various online tools and reports.  Click Continue Reading to see a sample online analytical chart for comparing properties.

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PeopleSoft Real Estate Management Overview Part 5: More Leasing Details

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Editor’s note — here are all the posts in this series for easy reference:

Welcome to Real Estate Management overview #5. This week’s discussion will be about how to validate, activate, maintain and amend leases and is a continuation of last week’s post in which we discussed creating a Payables (tenant) lease.

Validating Leases

The next step after you create a lease is to run the validation process which checks for any required missing financial terms that you may have overlooked or to verify that property ID, occupancy date and region code fields have been completed.  Once the lease has been validated, the lease can then be activated and financial processing against the lease can begin.

To validate a lease, navigate to the path below and find your lease, select Validate Lease from the Action menu and click the Go button.  If errors are found, click the error button to view and resolve the errors.  If no errors are found, the lease will be ready for activation.

Activating Leases

Okay.

To activate a lease after it has been validated, select Activate Lease from the Action menu and click the Go button.  Once the activation process has completed, the lease status will change to Active and the lease will now be ready to create financial transactions.  From a portfolio management standpoint, Real Estate Management gives you the option to both create leases and activate them in single process or the option to create leases and place them in a queue where you can activate each lease as needed.

Next, let’s discuss maintaining and amending leases.

Lease Maintenance

Maintaining a lease is defined as changing certain general information fields on an active lease that do not affect the fundamental financial terms and obligations of the lease.

Lease data that can be changed as part of lease maintenance are lease name, lease administrator or portfolio manager, options and critical date notifications, notes and contacts.  Note that the status of the Lease still remains active after you make any of these changes and you do not need to re-validate or re-activate the lease.

Of special note during the maintenance process: Real Estate Management grays out and protects all fields on your leases that would otherwise require an amendment, and only allows you to change the fields mentioned in the paragraph above.  If you need to change data which does affect the financial terms or obligations of your lease, then you must initiate the lease amendment process which we will discuss next.

Amending Leases

First let’s discuss some basics on lease amendments.  A lease amendment is defined as any change to an active lease that alters the fundamental entitlements and obligations of the lease.  From a business process standpoint, lease amendments do not affect the originating active lease until the amendment is processed, reviewed and activated.   As a result, an amendment does not affect future processing of a lease until you activate it.

Here’s a quick primer on some tab/navigation specifics.

On the General Information tab, fields that you can amend include landlord or tenant, commencement dates, termination dates, signature lease dates and property information.  Note, if you add new properties, delete properties, change existing properties or select a new primary property, the fields that you can change include the useable area, the rentable area and the occupancy date.

On the Financial Terms tab, the following fields are available for amendment: base year amount, base year, exclude base year amount, proration, method, maximum operating expense increases, maximum lease rent escalation.  Further pages available for amending from the Financial Terms tab also include the base rent page, operating expense page, miscellaneous rent, financial terms, percent rent and security deposit pages.

When you create an amendment to a lease, the status of that amendment is set to pending.

To update the lease with the new terms, you must activate the amendment.  To effectively monitor your amendments, each lease has an Amendments History page where you can view amendments for that lease.

The three main steps for amending a lease are:

  • Creating the amendment,
  • Editing the amendment, and
  • Activating the amendment

Once you activate an Amendment, the system sets the amendment status to active and the values that you specify for that amendment become the current active lease values.  The changes will then be reflected in all future transactions and will not affect any current transactions that have not been completely processed.

Next week we will go into a walkthrough of actually amending a lease, complete with a bevy of screenshots. Hopefully this week set the conceptual stage for you. Stay tuned.

PeopleSoft Real Estate Management Overview, Part 4: Creating Leases

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Editor’s note — here are all the posts in this series for easy reference:

For this week’s Real Estate Management overview, we will take a more thorough look at creating leases.  As a reminder, in our second post of this series we took a high level look at creating leases whereas this week we will be taking a deeper view and discuss more specific functionality including a step-by-step walkthrough.

First, before creating a lease you must define your property for Real Estate Management.  This is performed in the Asset Management application on the Basic Add, Asset Property tab where you select the Property Class of Property.  This field then classifies your property as Real Estate which will use the built-in property Real Estate Management hierarchy of Site, Building, Floor, Area and Space.  Upon selecting a hierarchy level, you can now further define leases for this property at different levels within that hierarchy.  Specifically if you have multiple leases that span the different hierarchy levels, this can further define how your property is treated during transaction processing. For example: it is often common for organizations to have multiple leases covering different floors, or parts of a floor some with wood and some with ceramics, which you could have if you get lithofin from Atlas in Hampshire, within the same building, and this is where you would assign your property hierarchies to match how that property is being used.  You can also further define your property with an optional user-defined subclass.  Also note that the Attribute information that you enter here can also be used for allocating lease journal entries.

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PeopleSoft Real Estate Management Overview, Part 1

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Editor’s note — here are all the posts in this series for easy reference:

As many of our readers know, MIPRO is a leading implementer of PeopleSoft ALM which includes Maintenance Management, IT Asset Management and Real Estate Management.  While MIPRO is the foremost expert in PeopleSoft ALM, it is interesting that many organizations who already own PeopleSoft and have in production many of the integrated components to these ALM products, really don’t understand their existence in the market or their capabilities. Over the next few weeks Steven Brenner (a MIPRO Senior Principal Consultant) and I will create a series of blogs which will highlight some of the capabilities and provide an overview of PeopleSoft Real Estate Management.

REM-1-212x300

From PeopleBooks, the following diagram outlines the PeopleSoft Real Estate Management business processes including site acquisition, lease administration, financial processing and space management.  We’ll cover some of these business process areas over the next few weeks.

Also from PeopleBooks, the following graphic illustrates how PeopleSoft Real Estate Management integrates seamlessly with other PeopleSoft modules, and it is these integration points that are key to understanding the major value proposition of the PeopleSoft REM product.  One can clearly see the number of integrations to external applications that would be required utilizing a third party Real Estate Management solution.  With PeopleSoft’s fully integrated suite, those integrations are not necessary, saving significant dollars on design, development and maintenance.

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Another way to depict the functionality of Real Estate Management is to show the Real Estate Management Center (REMC) within the application itself.  THE REMC allows the user to access primary Real Estate menu options as well as pages pertinent to administering leases from other PeopleSoft applications.

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Utilizing the key subject areas within the REMC as our guide, we will provide a high level overview of the capabilities of Real Estate Management opening the doors to what value this product can provide to any organization that either leases significant space or leases out significant space.

Stay tuned, more to follow.

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More links:
MIPRO Consulting main website.
MIPRO on Twitter and LinkedIn.
About this blog.

PeopleSoft Asset Management & Project Costing 9.2 — and Beyond

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A couple weeks ago I had the opportunity to present at PeopleSoft RECONNECT  in Hartford, Connecticut. In the midst of hectic schedules and a vibrant crowd, I had a great time catching up with old clients and friends and meeting new people and sharing ideas.  It was a great forum for open discussions and a unique venue for an in-depth view of PeopleSoft products.

One of my favorite sessions was the “Project Costing & Asset Management 9.2: Overview & Roadmap” presentation by Oracle’s Loida McDearis.  Loida is the PeopleSoft Product Strategy Manager for PeopleSoft ESA (Projects) & ALM (Assets) Solutions.

At a high level and in bullet format, here’s what she shared with us regarding what’s in store for version 9.2 and beyond!

For Project Costing:

  • Project summarization by subsystem
  • Numerous improvements to variance pricing and funds distribution
  • Simplified capture of project costs and revenue
  • Multi-dimensional custom rate definitions
  • Improved quality of billings and cash flow via the manager transaction reviews
  • Introduction of supplemental data
  • Project financial reporting through the use of query and pivot grids

For Asset Management:

  • Combo edits by transaction source
  • Rapid capture of cost adjustments transactions in basic add component
  • Addition of procure groups that allow for the creation of single assets from multiple requisition or purchase order lines without the use Project Costing
  • Flexible allocation of asset voucher adjustments with email notification
  • Expanded search criteria on the disposal worksheet
  • Procurement item full description added to the asset long description field
  • Multiple improvements to physical inventory
  • Adoption of Oracle Secure Enterprise Search
  • Approval Framework Adoption
  • Asset Visualization via integration with ESRI ArcGIS Online

I know it’s hard to compete with iPhone 5 buzz these days, but if you’re a PeopleSoft ESA or ALM client, this is pretty huge news. It’s great to see Oracle refining and expanding the PeopleSoft roadmap in key areas like this. In my professional experience, most of these hit quite the sweet spot.

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More links:
MIPRO Consulting main website.
MIPRO on Twitter and LinkedIn.
About this blog. 

Best Systems Are Capable of ‘Predictive Maintenance’

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Our own Shannon Klabnik and Jim Henderson, writing for Health Management Technology about what it means to implement and optimize an enterprise asset management (EAM) system:

The value of a successful maintenance-management program supported by an integrated software solution is profound. This combination can be the foundation for healthcare organizations to achieve full visibility to the entire lifecycle of invaluable assets. But what do healthcare organizations need to do – and understand – in order to implement that kind of next-generation system?

Visualize and design: First and foremost, identify operational priorities. The best EAM systems operate with a large amount of flexibility and can be adapted to suit the individual practices and professional goals of an organization. Once the healthcare organization establishes what it needs from the system – from big-picture goals down to the smallest details – the next step is to determine how you actually want it to work. A professional consultant can walk you through that process, helping to define the maintenance program and strategy.

Lay the groundwork: Identifying specific maintenance standards and metrics can be a challenge. But in order to fully utilize the power of an EAM system – with its ability to track those disparate variables – those standards should be clarified ahead of time. It is also important to identify, evaluate and mitigate or resolve any post-implementation risks/liabilities. For example, centralizing all replacement parts can actually create a surprisingly difficult inventory problem. Finally, the requirements for an effective software solution that will support your program, processes and procedures should be identified and carefully noted.

Train and deploy: Educate the team responsible for transforming your maintenance practices and implementing your system. Even the best system is only as good as its users, and helping users achieve technical and operational fluency is a must. Once thorough training is complete, implement your maintenance practices and deploy the system to support said applications.

Stay on track: Deployment is just the beginning. The up-front investment is where most energy is expended, but it is also important to conduct regular follow-ups and periodic formal evaluations to ensure that the new maintenance management program and supporting system are working as intended and delivering the anticipated results. Reinforce the program through ongoing training and support.

Once clients begin to realize the true value of an integrated approach to EAM, a whole dimension of operational efficiency opens for them. Getting past the datasheet level takes some digging — especially in terms of making EAM right for your organization — but once you see the value it offers, there’s no going back. It’s like Morpheus offering Neo the blue pill or the red pill in The Matrix: the blue offers an ignorant bliss, whereas red a vibrant view of reality that once seen can never be unseen.

Digging into EAM and what it can do for your organization is, in many ways, its own red pill.

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More links:
MIPRO Consulting main website.
MIPRO on Twitter and LinkedIn.
About this blog.

 

NEWS: IASB and FASB Agree on Lease Accounting Approach

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From Oracle’s PeopleSoft Apps Strategy blog:

Almost a year after their decision to re-expose proposals for a common leasing standard, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have reached a key decision regarding the recognition of lease expenses. At their June 13, 2012 meeting, the IASB and FASB agreed that leases over 12 months should be recognized on the balance sheet, while leases with terms under 12 months should be treated similar to current operating leases.

With that major decision in place, the timeline for issuance of the final standard seems to be a bit more stabilized. The IASB and FASB expect to publish the second exposure draft in the fourth quarter of this year, and issue the final lease accounting guidance late in 2013. It is anticipated that the new lease accounting standard will be effective in 2017, with retroactive reporting beginning in 2015.

Oracle remains committed to helping customers transition to the new lease accounting standard. The Applications Unlimited teams continue to work closely together to monitor the convergence project and analyze the impact to our products so that we can design and build consistent solutions.

We anticipate that the new lease accounting rules will introduce functional overlap between the two products primarily impacted by the lease convergence – PeopleSoft Asset Management and Real Estate Management, both part of the PeopleSoft Asset Lifecycle Management (ALM) suite of products. PeopleSoft plans to evaluate the lease administration features and functions of each product to deliver a foundational framework for the new capabilities the final accounting standard will require.

Good news: Oracle will be enhancing its PeopleSoft ALM suite of products to accommodate these new rules.

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More links:
MIPRO Consulting main website.
MIPRO on Twitter and LinkedIn.
About this blog.

The Road to Interact 2012: Keep (C)ALM and Carry On

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If you’ve read our previous posts in this series, you’re up to speed (if not, here’s part 1, part 2 and part 3). You understand the risks associated with not having a strategic, coordinated and effective maintenance management program supported by an integrated software solution. You recognize the value of Asset Lifecycle Management (ALM), and you might be interested in what MIPRO and PeopleSoft ALM can do for your organization. You know that systems architected to work together will be more efficient than ones have had to integrate yourself.

Now what?

What’s the first step? For that matter, what’s the second step? What’s the plan you need to undertake to begin to implement your own ALM solution and upgrade your maintenance management systems?

Design

Before you do anything, it is important to partner with ALM experts to identify operational priorities. The best ALM systems are extremely flexible, and can be adapted to suit the individual practices and professional goals of your organization. A good consulting partner with specific expertise in this area can help you determine the design details of a system that will meet your needs. As a general rule, you want to start with the big picture and work your way down to the smaller operational details.

You’ve heard this before, yes. For a reason. It all starts with the proper planning and design.

Get specific

It isn’t always easy to zero in on the specific maintenance standards and metrics that will serve as the backbone of your new maintenance management program, but the true power of an integrated ALM program like PeopleSoft ALM is in its ability to not only track those details (and pinpoint them on a map!), but to make smart, coordinated decisions and perform predictive analysis based on myriad smaller pieces of the maintenance puzzle. To fully unlock that power, those standards and those details should be clarified ahead of time. This is also the time to plan ahead to try to anticipate and mitigate any post-implementation risks or structural liabilities. Centralizing all replacement parts in a single location makes logistical sense, for example, but it can actually create an entirely new set of inventory demands that must be integrated into the system.

Implement & Train

The technical implementation is up to the professionals, of course – but the tech side is the easy stuff. Even the most innovative program with next-generation software is only as good as its users: training and educating your team and helping users achieve technical and operational fluency should be your top priority.

Software without the proper training is unused or under-utilized software. Don’t make this mistake. We’ve seen what happens when corners are cut in this area, and it’s a mess you don’t want.

Monitor

Deployment is just the beginning. And training is a priority that doesn’t stop after a few days: it’s an ongoing process. Which is why the final post-implementation step is long-term training, tracking, monitoring and analysis to ensure optimal system functionality over the long term. The up-front investment may be where you spend the most energy and resources, but it is critically important to conduct regular follow-ups and periodic formal evaluations to ensure that all aspects of the new maintenance management program are working as intended and delivering the anticipated results. After all, a tool is only as good as the craftsperson wielding it.

When deployed correctly, PeopleSoft ALM enables hospitals and healthcare organizations to practice preventive, corrective and even predictive maintenance to minimize or avoid costly downtime and associated liabilities/exposures. We’ve seen it firsthand. Not only does the system track, monitor and record critical information, it also plans and schedules technicians and replacement parts, creating new maintenance and management efficiencies that can dramatically lower overhead. This unified approach to capital infrastructure management facilitates smarter and more efficient scheduling, enabling healthcare facilities and maintenance professionals to manage and deploy assets across various departments and facilities.

Ultimately, healthcare organizations can leverage these powerful new tools to improve performance, reduce capital and operating costs, extend asset life and realize maximum value from capital investments. The result is improved compliance, efficiency and profitability; all while minimizing waste and avoidable expense and limiting costly downtime. And in a competitive and rapidly evolving field like healthcare, that is a prescription for sustained efficiency and long-term success.

If you’ve been following this ‘Road to Interact 2012’ series, thank you for reading. If you have questions, please feel free to email us or stop by and see us on the Interact floor.

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More links:

Learn more about Interact 2012, where MIPRO will be exhibiting.

MIPRO Consulting main website.

MIPRO on Twitter and LinkedIn.

About this blog.