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Posts Tagged ‘EAM’

Tough Choices to Come for Higher Education

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Wellesley_College_Tower_Court

Craig Douglas, writing for Boston Business Journal about the facility and building management issues mounting at Wellesley:

In its recently published annual report, the college said 82 percent of its buildings have not had a major renovation in more than 25 years, while 60 percent have been largely untouched for 50 years.

Wellesley officials have warned that the capital-spending plan, while needed, will require “prioritization and … difficult choices” going forward.

“That means spending less on all levels of expenditures,” said Ben Hammond, Wellesley’s vice president for finance and administration. “I think it’s fair to say … we’re asking ourselves what levels of spending are sustainable.”

Take a minute to read the whole thing.  There is a crisis building in Higher Education (HE) around facilities and building management.  For the record, there are 1100 HE institutions running PeopleSoft.  We’ve helped HE institutions like Wellesley address the facility question with some additions to their current PeopleSoft system. In fact, we’ve become known as an HE authority in the PeopleSoft world.

The crisis is only a crisis if you let it get to that point. If you run facilities for an HE campus and you are struggling with this issue, we’re happy to say we have a solution for you.

Why buy new equipment, assets, and facilities when what you have works fine?

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I can’t think of one industry today that isn’t considering cost-effective ways to manage their assets, capital equipment and facilities to maximize their longevity and return on investment. Everyone’s thinking about it.

My father once said, “The best kind of car is one that’s paid for.”  A simple statement, but when you think about it, a car that’s maintained with regular oil changes, new tires, battery, and brakes is one that will last a lot longer and will far exceed obsolescence and break-downs if maintained properly over the years, and keeping more money in your pocket instead of having to buy a new car.

CPG companies, utilities, higher education institutions, healthcare, public sector, retail, apartment complexes, and service industries are just a few that all have assets or equipment that need to be maintained and serviced on a regular basis in order to maximize their life expectancy and return of value and profit to a given organization. It’s a lot more expensive when one of these items goes out of service and has to be replaced.  No one likes to face the prospect of replacing forklift equipment, HVAC systems, MRI scanning machines, etc. There is too much at stake not keeping these assets and equipment running as efficiently and smooth as possible. Early replacement is the penalty for poor maintenance.

One way to achieve a stronger maintenance approach is to leverage the latest in integrated Supply Chain systems that tie the ongoing and preventative maintenance to your back-end Financials and HCM systems. It’s far too costly to rely on disparate systems via spreadsheets to try and make all this work together effectively. A well-integrated ERP system that brings together maintenance requirements and ties those back to a work order and order management system through financials helps you maintain your assets longevity and provides better visibility throughout your supply chain.

Add to that mobile capability for field sales and or technicians and you have the complete package. PeopleSoft’s EAM system does just that in an integrated way and does not require any 3rd party integration.

It works…out of the box. It’s as Apple-y as PeopleSoft has ever been, and that’s a good thing. Smart integrations done right are, to sloppily paraphrase Arthur C. Clarke, indistinguishable from magic.

For many organizations today looking to save money and drive this savings to the bottom line, implementing an integrated EAM-Enterprise Management System like PeopleSoft is a cost-effective measure when you are trying to watch where your dollars are spent in a very competitive economy.

PeopleSoft Real Estate Management Overview Part 10: Reporting & Analytics, Plus Closing Comments

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Posts in this series so far:

Hello everyone, welcome back to the PeopleSoft Real Estate Management overview series.  This REM overview #10 and our final blog in the series.  Today’s topics are Real Estate Management Reporting & Analytics and closing comments.

Before we discuss REM reports, I would like to briefly cover My Lease Portfolio and My Critical Dates again.  These “inquiry style” pages allow for quick access to your leases and a discussion of REM reports would not be complete without mentioning these pages too.

To read about My Lease Portfolio and My Critical Dates in more detail please see REM overview post #2.

My Lease Portfolio

The My Lease Portfolio Page allows you to manage and track leases.   Through its search criteria section, the page automatically displays all the leases for which you are the Lease Administrator or Portfolio Manager.  The page provides high level details to your leases and also provides a link drilldown to your leases.

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PeopleSoft Real Estate Management Overview Part 9: Payables/Billing, Expense Audits and Security Deposits

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

Welcome back to the Real Estate Management overview series.  I hope everyone was able to enjoy the holidays.  We are now nearing the end of the REM series, and for this edition we will be covering further details on Payables and Billing integration, Operating Expense Audits and Reconciliation, and Security Deposit functionality.

Before we get started I want to point out that I will be using Payables integration (tenant leases) for our main examples but please note that the concepts discussed in this session also apply to Billing integration as well.

Payables and Billing integration

During the lifecycle of a lease, various payments are generated and then subsequently submitted to the AP department and ultimately to the payee for payment.  REM allows you to select leases for payment by a number of different criteria such as BU, lease number, lease administrator, etc., as seen in the Search Criteria section in the screenshot below.

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To generate these payments, PeopleSoft utilizes the REM Transaction Generator, REM Transaction Queue and the REM AP/Billing interface to automatically generate rent and other related lease payments with the respective payee and accounting information included.  In addition you have the option to put payments on an auto-approve schedule or require approval for payments in the Transaction Queue before submitting to AP/Billing.

From a personal perspective, the integration from REM to AP/Billing is one of my favorite features of the REM application.  Real Estate departments are usually driven by monthly cycles and often payments requests can require several approval rounds before being released to the AP/Billing departments.  This can often lead to struggles in meeting very tight payment deadlines and in certain circumstances it requires special handling between departments to avoid late payments.  With PeopleSoft REM, the automatic integration process can better facilitate payments made against those tight deadlines and virtually eliminate the need for special handling since all the underlying accounting information is included in the delivered REM to AP integration.

Talking in more detail about the REM payment approval process, REM also allows you to review payments for approval by a number of different ways including BU, lease number, lease administrator, etc.  If a lease is placed in dispute the system can also automatically place all pending payments for that lease on hold as well.  Additionally, the REM to AP/Billing integration includes a built in error checking process to verify that all accounting information is valid at the time of payment and in synch with your general ledger.

Performing Operating Expense Audits and Reconciliations

 

From a definition standpoint, operating expenses are the cost of maintaining a property or building which includes utilities, taxes, insurance, maintenance, cleaning, advertising and promotion, etc.  With PeopleSoft REM you can elect to either pay (or bill) these expenses for the actual amounts or you can alternatively elect to use recurring estimated amounts and perform year end operating expense audits as a tenant (or perform operating expense reconciliations as a landlord).

As part of the audit/reconciliation process, REM provides audit and reconciliation pages where you can load the actual amounts and run a REM process that will calculate the over/under amounts against the estimated payment amounts and then can automatically create the adjusting payments/credits.  The REM system also allows you to set thresholds against your estimates and also has the ability to perform year to year audit comparisons.

Processing Security Deposits and Refunds  

As defined, a Security Deposit is part of the lease financial terms.  REM comes delivered with several security deposit types but the field is user defined.

Delivered REM security deposit functionality allows you to have a different payor/payee from the lease, multiple security deposit types per lease and include an approval process.  For processing security deposit refunds, for “landlord leases” REM includes a Security Deposit “Refund Worksheet” where you can add interest for outstanding deposits, adjust for missing rent payments or deduct for any damages assessed.

This concludes this week’s REM overview. Our next post will be the last in our REM series where we will discuss REM reports and analytics. Until then, see you next time, and thanks for reading.

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.

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, 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.

(Note: click to enlarge any image.)

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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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Maintenance Management for Higher Ed

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Many years ago I graduated from Michigan State University (in my slightly biased opinion one of the greatest institutions in the country). As a student I was fortunate enough to land the right job that afforded me to forge some great relationships within the campus. Over two summers I worked security in the dorm rooms at night, which allowed me to get a free room in the dorm over the entire summer. (By the way, living alone in an entire dorm that has 500 empty rooms is a little on the spooky side.) During the day, I was a member of a maintenance crew responsible for painting all of the dorm rooms. You would be surprised at what a college student can do to a dorm room in just a few short months. Really, how many ceilings should require painting because they are littered with burn marks? Again: burn marks. On the ceiling. Also, it should be noted that before a room can be painted, there are many undetermined foreign substances that have to be scraped off the walls, which is as gross as it sounds.

I think I’m digressing.

The point is that on campus there are many dorm rooms spread across many square acres. MSU for example, is over two miles wide (I know, I had to walk it in zero degree weather) with multiple dorms and literally thousands of rooms. Each area of the campus had its own maintenance crews responsible for painting the dorms over the summer. Amazingly, back in late 80’s early 90’s, this was an all-manual operation. The maintenance supervisor would go through each room, inspect it, leave a little piece of paper that indicated what required painting (and sometimes scraping) and that was the work order for the room. There was no automated solution, there was no solution that connected all of the work that needed be completed across the campus and there was no way to understand collectively if work was on or behind schedule.

Today, this all is changing in higher education campuses. Many universities already run PeopleSoft Campus Solutions and are extending that with a fully integrated PeopleSoft Maintenance Management solution, which is a logical and efficient step. This begets many benefits for the higher ed client: work orders can be generated as specific or general as required, crews assigned to the work, costs of labor and supplies measured, work progress in terms of on schedule or behind schedule analyzed on a continuous basis. This also all can be extended to a mobile solution so the maintenance supervisors can go room to room and enter information related to the asset and work order directly into PeopleSoft.

Compared to what I saw back in my days at MSU, it’s another world. Like, entirely.

We have come a long way from a manual, disconnected solution to a fully automated, integrated and mobile solution that provides us all of the information on a real time basis. I have spoken to clients about this on many occasions, and there’s a tremendous need in the marketplace to integrate these seemingly routine campus tasks into a maintenance system that ties back to larger campus solutions and finance apps. The level of pain and happenstance we dealt with back in the day needn’t be a reality today.

We have the tools. We should use them.

If you would like to understand more about the PeopleSoft Maintenance Management solution, don’t miss our white paper (the second one on the page). Likewise, if you have any questions about this, drop your thoughts in the comments or to me via email.

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