Optimizing Real Estate Portfolios through Integrated Project Management Technology

By Susan Watkins, Director of Marketing, Meridian Systems

With over $3.5 trillion in infrastructure projects under way globally, the pressure is mounting for organizations and their real estate and facilities teams to drive efficiency, reduce schedules, mitigate project risks and deliver results to the bottom line. To affect the above changes, large enterprises are increasingly turning to modern technology including Service Oriented Architecture, Web Services and XML.

These technologies have gone beyond traditional hype and market buzz, to allowing building owners and real estate developers to successfully optimize capital project lifecycles by integrating traditional project and program management (PPM) technology with other key business functionality. This concept is called Infrastructure Lifecycle Management (ILM), which evangelizes managing all phases of the capital asset lifecycle – from plan, build, to operate, in a single enterprise system of record.

The reality of ILM as a project management methodology is not only being driven by today’s available technologies, but also by key economic and business drivers. Many of today’s global 2000 companies share a common reliance on physical infrastructure assets to deliver their core business – whether it’s manufacturing facilities, retail outlets, office buildings or transportation systems. Another commonality these firms share is a desire to improve collaboration across the Plan-Build-Operate project lifecycle. Without a way to combine project scope, budget and scheduling data from these three project phases, determining performance across an organization’s real estate portfolio is a significant challenge.

In addition to business inefficiency, the economic impact is significant. The lack of integration between technology systems, project teams, facilities management departments, and outside suppliers has created huge cost impacts for owners/operators, construction firms, architects, engineers, and so forth. A study commissioned by the U.S. Department of Commerce, and conducted by the National Institute of Standards and Technology (NIST), reported that this interoperability problem costs $15.8 billion annually in the U.S. alone, with two-thirds of this cost borne by the owner/operator. Technology systems that do not integrate the Plan-Build-Operate asset lifecycle lead to costly communication breakdowns that result in:

• New projects and programs significantly over budget
• Delayed time to market for new and remodeled facilities
• Escalating maintenance and operations costs
• Growing backlog of deferred maintenance
• Increasing total cost of ownership
• Poor visibility into construction and facility performance

To address these compelling issues, ILM software solutions utilize Web services and XML technologies to consolidate all vital areas of capital project management and facilities management, then further adding layers of business process management and business analytics functionality. This combination enables multiple project team members, supply chain providers and executive stakeholders to come together on one enterprise technology platform to collaborate more effectively, yielding several benefits:

• Organizations can improve how they operate and manage physical assets, reducing costs for new construction and existing facility renovations.
• Senior executives and managers gain visibility into their entire portfolio of new and existing facilities.
• Best practices can be implemented consistently throughout the organization, increasing efficiencies and streamlining routine processes.

According to Aberdeen Group (from its whitepaper, Infrastructure Life-cycle Management, Overdue Solution for G5000), “owners and operators of properties lose millions in top-line revenue and bottom-line profits because they cannot get critical facilities operational or renovated in a timely manner. Companies have responded with a mix of makeshift systems (often no more than spreadsheets, as prior Aberdeen Group research has found), the formation of capital expenditure committees, and political might (in the absence of real hard data) to reduce the risk of project failure.”

Additionally, IDC Research also notes that companies using one tool to automate the Plan-Build-Operate capital project lifecycle stand to gain many advantages. (From its whitepaper, *Meridian Systems Blazes the Trail for PPM in the Asset Life Cycle with Proliance 3.0.)

The advent of Service Oriented Architecture, Web Services and XML technology have now made the interoperability of PPM, FM and BPM possible. To learn more about ILM technology, download the complete IDC and Aberdeen whitepapers mentioned above, and to see which organizations are adopting this project management approach, go to www.meridiansystems.com/research.