Portfolio Management Migrates to the Web

efore much longer, loading a new software program onto one’s computer and upgrading it with new versions over time will be anachronistic. Instead, the norm will be to simply fire up one’s Web browser and access the necessary applications online. This is increasingly the case with portfolio management systems and other real estate-related programs, including even project management applications involving multiple parties (see sidebar). Application service providers, or ASPs, are playing a key role in the emergence of Web-based solutions; they generally serve as hosts to software suppliers. Users typically pay for the services on a pay-as-you-go or subscription basis.

       
“In the real estate environment, it is necessary for people in different departments, different functional areas and people outside the company to share information and to collaborate,” says Meg Davis, director of product management at Peregrine Systems (www.peregrine.com), San Diego, a developer of infrastructure management systems. “The ASP model facilitates that better than a traditional client-server architecture or a PC-based one.” Peregrine introduced its Real Estate Portfolio Manager ASP service in September 2000.

ASPs’ Dual Role

As a potential user of such services, the question to ask providers is: To what extent is it possible to actually manage the portfolio online? Is the ASP really more of an information-sharing service? “The answer is both,” says Davis. “As a portfolio manager, our system will help me keep track of dates, deliver automatic lease expiration and rental-payment-due notices. It will let me look at information relevant to contracts and leases or information on a particular building. But I can also obtain information I need that is resident in other locations.”

       
Another issue to raise is the cost benefit associated with the ASP model. This will vary from organization to organization, but the bottom line is whether a company is comfortable with the substantial cash outlay that may be necessary when installing a client-server solution. The ASP model opens up new options, including renting software, purchasing it and letting the ASP host and maintain the software, subscribing to a service plan and other methods. Another benefit to the ASP model is rapid implementation. Once the contract is signed, it’s just a matter of loading portfolio data into the system — no software and network installation time or expense is needed.

       
There is more to Web-based portfolio management than ASPs, however. SAP AG, the German enterprise resource management provider, is Web-enabling its SAP Real Estate module to give users the Internet option. The result is a service called mySAP.com Real Estate, one aspect of which is mySAP.com Workplace. “This service lets users access and operate systems via the Internet; all the functions you had in former releases on a local basis for local installations are now available from wherever through an Internet portal,” says Volker Zimmermann, product manager, mySAP Financials, in Walldorf, Germany.

       
Zimmermann says SAP AG also is looking into making the system available via ASPs. “We are creating a view on the system that shows the corporate real estate management functionality, and we want to host that in an ASP model, creating an easy-to-use and simple subset of our [broader] functionality.”

       
Besides the implementation and potential cost benefits, Web-enabled solutions such as SAP’s, new users of the service are easily added, and remote users, such as maintenance staff filing routine building reports, need not load the graphical user interface (GUI), or front-end system. (One SAP client, Lucent Technologies Real Estate, is exploring ways to integrate SAP-resident portfolio data with graphical services that would provide views of workspace as well as the relevant data. Customers are interested in links to computer-aided design (CAD) systems, says Zimmermann, and discussions are under way with architectural and other graphical service providers to add visual value to the process.)

Kick the Tires

The merits of Web-enabled systems must be weighed carefully against those of Web-based solutions; the latter, by definition, have been built with Internet technologies from the ground up. “There seems to be a split between Web-based solutions — typically ASPs — and conventional desktop or client/server ones,” says Scott Williams, founder of Lease Harbor (www.leaseharbor.com), Chicago, an Internet-based commercial real estate management tool. “People who have tried Web-enabled options are finding that they represent the worst of both worlds. So if they really want a Web solution, they are going with the ASP model.

       
“There seems to be a lot of confusion regarding which software functionality is real, tested and being used by clients, and which is vaporware,” adds Williams. “The software industry has a history of selling functionality before it is really baked, but it seems to be particularly acute in this arena.”

       
Barbara Walker, real estate asset lease administrator at Whirlpool Corp., was in the midst of sorting out her Web options at year-end 2000. “I’m somewhat nervous about handing our data over to a third party for any length of time,” she allows. “The database with our portfolio information has been resident at Whirlpool for seven years — yes, there is some apprehension on my part.” Whirlpool has a portfolio of 41 million sq. ft. (3.8 million sq. m.) in 340 locations globally.

       
Among the systems under evaluation at Whirlpool are WorkplaceIQ (www.workplaceIQ.com), an ASP solution. “Accessibility to information is an important factor, including on the part of our service provider who doesn’t currently have access to our transactions database,” says Walker. “A Web-based system may serve our needs in that area. Also, we have offices around the world, and asset managers and directors of real estate are constantly traveling, so it would benefit them if they could bring up the system on their notebook computers.” Another benefit Walker seeks is to provide Whirlpool’s executive management team with a Web-based tool for accessing property portfolio information. “We want to better manage the projects in which we are involved.”

       
Walker’s hunch that that is best accomplished in an Internet environment is well founded, according to those developing and implementing such systems for the real estate industry. This is particularly true in the workflow management arena, where routine, paper-intensive processes (notification of an over-budget building, work-order routing or lease expiration alerts, for instance) can be executed more efficiently online.

Room for Multiple Solutions

“The real estate industry is clearly behind in technology, so the ability to manage your whole portfolio through Web-based applications is new, and it’s exciting for the real estate industry,” says Andrew Rains, worldwide industry manager, real estate, at Denver-based J.D. Edwards, a provider of integrated e-business solutions. These include OneWorld Property Management, a suite of asset management tools available in the traditional client/server environment, as well as via an ASP. OneWorld Property Management automates such functions as project and facilities management, electronic procurement, lease administration, human resources management and customer relationship management.

       
Rains sees a market for both environments going forward. “We have about 100 clients using the ASP solutions,” he relates. “Some time ago, people thought ASPs were the future, and everything was headed in that direction. In fact, some ASPs have struggled to be profitable, and lots of companies want to control their own destinies. So I think there will be a mixture of conventional and ASP solutions.”

       
Sorting out one’s options in migrating to an Internet environment is a complex task that should involve the input of technical, clerical, strategic and other key personnel. The end result should bring about greater efficiencies in portfolio and project management, increased savings — and a more subtle benefit. “Real estate managers tend to be tactical and functional in nature,” notes Rains. “The Web-based solutions can make these managers more strategic and more proactive. Used correctly, they will allow you to be more analytical and make better decisions than was possible in the past by virtue of the information being more accessible and more real-time.”