Big business failing to manage its third largest cost

Citation

(1998), "Big business failing to manage its third largest cost", Property Management, Vol. 16 No. 3. https://doi.org/10.1108/pm.1998.11316cab.014

Big business failing to manage its third largest cost

Big business failing to manage its third largest cost

Ernst & Young's Real Estate Consulting group has revealed that big business is failing to adequately use IT systems to control the management of its third largest cost ­ property.

Directors and managers responsible for property in "The Times Top 1000" companies took part in Ernst & Young's REMIT '97 survey, revealing how they use IT systems to manage property, and their views on specialised IT packages currently available.

The survey reveals a number of weaknesses in business's current usage of IT systems to manage complex property portfolios. In fact, 38 per cent of corporate occupiers have no database of their properties ­ in some cases up to 60 sites. Most IT systems are used for only the most basic functions, including accounts and rent collection diaries.

Although many of the UK's largest businesses are using new and often complex IT systems to manage property assets, many operators do not understand how to use them to "add value" to their company's core business. A quarter of respondents reported they could not get their software to "do what they want", while 75 per cent said problems with their systems remained unresolved.

Other key findings of the report include:

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  hi-tech companies are the lowest users of property databases (20 per cent);

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  the majority of companies spend between £10,000-£25,000 in total on property IT systems;

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  over 75 per cent of respondents have upgraded their systems in the last three years, but 35 per cent of companies are looking to upgrade again this year (1998);

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  increased expenditure on implementation and training leads to greater satisfaction levels for property software packages;

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  most respondents would like to link their property systems to CAD and rates management, but few currently do this.

Real Estate Consultant, Andrew Waller, said:

"The consequences for businesses failing to plan and manage their property portfolios through IT systems are alarming. Business cannot be keeping an accurate record of property cost, so they don't know where savings can be made. IT systems are so flexible ­ instead of just using the basic accounting and diary functions companies are missing opportunities to increase business efficiency by using IT to manage property more effectively."