AMTdirect recently partnered with the AberdeenGroup in producing a complimentary new research report entitled “Real Estate and Facilities Lifecycle Management”.  Aberdeen evaluated 254 enterprises in June 2007 and distinguished Best in Class enterprises by two key measures: (1) percentage of REFLM spend under management and (2) visibility into both spend and process.  Best in Class enterprises in this study are notable for their superior performance and credit REFLM solutions for delivering the following benefits:

• 5.0% reduction in their total cost of occupancy
• 3.3% reduction in maintenance cost per square foot (psf.)
• 2.6% reduction in the cost of capital improvements
• 56% reduction in amount of time to close facility work orders

The report then goes into greater detail to show how Best in Class enterprises successfully save time and money.  To view the full report, http://www.aberdeen.com/link/sponsor.asp?spid=30410812&cid=4001. 

During this research process with the AberdeenGroup, I remember one conversation that we had on a particular statistic that they found surprising.  They were astonished by their finding that enterprise spend on real estate and facilities lifecycle management is over 30% of total spend for the average enterprise, yet, nearly 40% of enterprises report poor or no visibility into this significant category of spend and the processes that support it.  This statistic turned out to be the driver of the paper as well as a main contributor to deeper research into this area.  How could something that counts for so much spend in an average enterprise be managed by excel spreadsheets or lack the necessary attention that it deserves?  Was the lack of attention due to the typical view of real estate being a cost center?

Diving deeper into the research, AberdeenGroup found that 71% of enterprises are viewing REFLM as an increasingly strategic area.  Enterprises are starting to realize the lack of process standards and automation used to support these functions and the relatively poor levels of visibility into this spend.  As a result, they turn to technology solutions to actively manage this top spend item. 

The awareness and importance of actively managing your real estate is rising as AMTdirect continues to help ‘open the eyes’ of organizations about the potential cost savings.  As organizations like Rack Room Shoes implement on-demand solutions and track their savings, the realization of the cost savings being in the millions is achieved.  This brings me back to the age old saying, “a penny saved is worth more than a penny earned.”  The key to improving your enterprise’s bottom line is located in the cost center.