This blog was written by Andy Hamilton, a Consultant at Proactis.

Proactis, a certified MRI Software Solutions Partner, helps property management companies control 100% of their spend. Their solution transforms the Source-to-Pay processes, which helps organisations save money and create efficiency gains while increasing compliance and reducing risk.

Over the years, I’ve worked with many organisations in the property management sector, including CBRE, Knight Frank and Savills, to help them drive better value from their spend control and management processes. Through this experience, a number of key themes have emerged:

1. React to changing market conditions with flexibility and agility

Whether you’re managing your own company’s properties or those of your clients, controlling and managing spend is critical in terms of getting the best value possible for the goods and services you purchase – no matter how things change.

If the latest events have taught us anything, it’s to expect the unexpected. And with that mindset brings the need to develop agile strategies that can change should your environment shift overnight. Time doesn’t stand still, financial obligations must be respected, and business needs to keep going.

Some companies have been able to adapt their processes. For example, Proactis customer Honeywell expanded its production at its aerospace facility to manufacture N95 masks for Covid-19 protection.

Other institutions, such as the University of Sussex, have embraced technology to ensure they can keep functioning and, in this case, deliver higher education.

Agile Purchase-to-Pay (P2P) also proved critical for Bright Horizons, with a portfolio of over 320 nurseries, as it enabled the company to respond to the pressures Covid placed on the business when it was forced to shut the majority of nurseries during lockdown. Having the ability to control and manage cost effectively and centralise more purchasing was key to successfully navigating through the initial lockdown.

For Finance teams in many organisations, I have found that the situation has actually highlighted a number of areas that can be improved – not only short-term fixes, but for the long-term running of the business. For example, systems that connect teams, simplify reporting, centralise data and connect with the wider organisation can redistribute workload and reduce paperwork.

The impact of Covid forced many to accelerate their journey on the path to digital transformation.

2. Make it simple, but accurate

Obtaining the best value is critical, not only to success, but in some cases to survival. An agile approach to spend management helps achieve this by improving the effectiveness and transparency of both strategic and tactical sourcing processes, while reducing administrative time and effort. Savings can be realised by driving on contract spend and proactive expenditure control through the P2P front-end.

In complex property organisations in particular, it is key to be able to accurately determine who should authorise spend, how the recoverability should be classed, and ultimately where it should be allocated through the underlying property management system.

3. Gain visibility and control

Visibility of spend, through the entire process – from request, through comparison against service charge, to summary analysis – is invaluable to every level of decision-making. Budgets are tight across most businesses, with many having to do more with less.

It’s crucial for property management firms to closely manage costs against budgets, ensure that costs are controlled within the boundaries of the service charge provision, and have the flexibility to react to operating changes at any stage in a process.

4. Improve efficiency

A common objective, and challenge, that I often hear is whether Finance functions can improve process efficiency or not. For example, a strong P2P process, underpinned by well-integrated technology, supports ‘right first time’ invoice submission. This in turn reduces invoice queries and processing time. Imagine the value and reduced time when an invoice can be matched first time to an approved PO, goods receipted, and suppliers validated!

5. Eliminate overpayment and reduce fraud

Another important goal for Finance teams is eliminate overpayments and reduce invoice fraud. Well-adopted and efficient P2P processes prevent payments to unknown suppliers, duplicate payments, or payments when goods or services are missing. I have found that this often results in significant reductions in wasted resources for the buying organisation.

6. Add value without duplicating functionality

My experiences have proved that you can deploy effective spend control around just about any core system. In fact, deploying spend control that’s aligned with your property management system is the only sensible approach when seeking to deliver truly quantifiable value.

True best-in-class, agile P2P systems are “agnostic” of other systems but are built with clear integration points that utilise industry standards and tools to make integration into a product management system easy to implement and manage. Such integration ensures that you can get best-in-class procurement capabilities aligned with the familiarity of your property management system to deliver simplicity and maximise user adoption.

7. Integration is not just a suggestion

Proactis and MRI Software work in partnership to provide a complete end-to-end system for property companies around the world. Combined, our systems are truly agile and integrate seamlessly with each other. They create a complete solution that enables property management organisations to operate in a more effective way and ultimately better serve their customers.

As we mentioned above, Proactis is an MRI integration Partner! Their procurement and spend management solutions can streamline business processes, ensure compliance and drive down costs. To learn more about Proactis, visit their website.

As the vaccine rollout continues and real estate occupiers across the globe are assessing local health and safety requirements, everyone – from employees to landlords – is asking the same question. When and how will companies bring people back into the office? Answering that question requires finding a solution for the return to work that prioritizes the needs of the business and of its employees. No one office will return the same way, and for that reason, businesses need to have a solid plan in place to address those who wish to work onsite full time and those who are more productive working remotely.

We understand that workplaces are about driving productivity and collaboration, which is why we’re introducing MRI Workplace Central, a set of solutions that enable occupiers to create a safe, flexible work environment that empowers employees to make optimal use of your workplace. Workplace Central can be your one-stop shop for bringing employees back into you’re the office and manage your space requirements as the needs of your business change.

Plan for the right reopening

As one survey showed, most occupiers are planning on bringing their workforce back gradually, with some remaining in their work-from-home schedules full time. Maximize your office space with Workplace Central by easily planning your new occupancy floor plans and return-to-office scenarios to ensure a safe and successful reopening.

When employees come back to the office, they can return to a workplace that is designed specifically for collaboration across teams, whether those teams are in-office or working remotely.

Track who’s on site with presence management

Workplace management isn’t just about office layouts – it’s about establishing clear lines of direction on where employees are supposed to go, having established procedures for visitors, and booking desks for employees working on a hybrid schedule. Gain visibility into who’s on site with solutions that let you fully track the people coming into your building, from visitors to contractors and even full-time employees.

For those who might not spend every day of the week in the office, this means utilizing booking technologies that let them reserve a desk for themselves, schedule a meeting room, and allow visitors into set parts of the premises – all from a mobile application.

Modify the space to suit your needs

The pandemic hasn’t just caused a shift in market trends. It’s completely changed the way we think about office space. The workplace will need to be constantly flexible and open to reinvention based on the needs and desires of its employees. Workplace Central gives you a full view of real time and historical trends to highlight shifts in usage and adjust layouts to meet changing demands for space.

As more employees return to the office and use the space over longer periods of time, you’ll gain a better understanding of how the space is being used. With this knowledge, Workplace Central can enable you to readjust your original plan to better meet evolving space needs, whether that means adding room for collaboration or removing desks.

Optimize your office with usage data

While changes will always need to be made to accommodate your employees, you also need a workspace management tool that gives you greater insight into how changes to your office are impacting the business and how your leases might need to be adjusted as requirements continue to change. Workplace Central lets you leverage reliable, strategic insight into your reconfigured workplace to identify areas of improvement and lease re-evaluation, utilizing AI-powered lease abstraction.

Learn more about how you can utilize Workplace Central to the benefit of your business and your employees in this webinar.

Organizations that occupy real estate have faced many challenges over the past year. In particular, the spotlight on the relationship between tenant and landlord/agent has intensified – with a greater-than-ever need for clear communication and collaboration. Regardless of sector, the way in which businesses provide services, sell goods and interact with their customers and employees has changed, and many of these changes are here to stay.

The future of leases

Real estate lease agreements as we know them have evolved during the last 12 months, with the introduction of new clauses, increased scenario coverage, more options available, and a shift towards turnover-based structures. The very nature of negotiations over the life cycle of the lease are therefore becoming increasingly key to the long-term profitability of a business, in terms of driving down costs and reducing the extent of obligations.

Occupiers have naturally moved to explore and push for more flexibility within lease agreements to accommodate a rise in scenarios such as underutilized office space due to employees working from home, and account for space that perhaps cannot be legally utilized due to COVID restrictions. Occupiers may become more reluctant to signing up to long-term lease agreements based on fixed space, instead there could be more of a movement to demand more defined types of space around temporary or flexible areas with differing options and unit costs. It begs the question; will we see more short-term leases forming part of occupier real estate strategy? The added attraction of this approach of course is that those short-term solutions often do not require inclusion on financial statements and lease accounting schedules, which may act as an additional driver.

The introduction of COVID-type clauses brings a whole new dynamic to real estate lease negotiations and management. These clauses can vary significantly depending on country, region or property use; however, there have been such scenarios recently of termination options made available to the occupier linked to financial stability of the business based on COVID factors, as well as mutual terminations and break options linked to COVID or pandemic-related scenarios.

Many MRI occupier clients have proactively moved to renegotiate and re-gear leases on mass to agree a more sustainable commercial model, whether that be concessions, deferrals or a change in payment frequency. Recently, particularly in the UK, occupiers have sought to renegotiate quarterly rent payments to monthly, more akin to the US leasing model – spreading the risk thanks to smaller periodic payments. The impact this can have on reporting and internal processes means technology alignment is particularly significant if this negotiation covers a large and complex portfolio.

New lease variables

As the impact of the pandemic forces occupiers to re-evaluate the structure of leases, it’s bringing to the fore other questions and trends around how real estate agreements are put together. Take sustainability, a hot topic in many walks of life, and none more so than sustainability within the property sector. ESG clauses are increasingly being imposed within lease agreements to enable landlords to more accurately track progress on ESG initiatives, which naturally require the occupier’s permission. This is placing responsibility on an occupier to now share sustainability data for more of a detailed indication to the landlord of the premises being a “green building.” We are seeing this become a common requirement within the market where occupier organizations have a need to understand much more than their financial obligations, and now have a potential legal obligation from a sustainability perspective across their portfolio of lease agreements, which we anticipate could have a consequence when negotiating any sublease agreements, too.

For retailer occupiers, we are also seeing an increased movement towards desirable turnover rent based agreements with landlords, with many landlords also proactively presenting a regearing of the lease to restructure the agreement. This model creates a more interdependent relationship between landlord and occupier and is aimed at benefiting both parties. This is evidently a more attractive proposal for when times become tough as we have seen during the pandemic, where stores out of the occupier’s control are legally required to stop trading.

Role of technology

In the same way that there has been a natural evolution to single source of truth; i.e., a single lease record driving all payments, lease accounting schedules, key event alerts, etc., there is now a movement toward Artificial Intelligence-powered occupier management.

For a sector that has been notoriously slow to adapt to change and adopt technology, the pace at which real estate lease structures are evolving demands a faster movement toward innovation and automation. Many occupier technology procurement processes are no longer simply looking at functional requirements around key business processes, but are instead conducting deep evaluations of how best to maximize the integrity and auditability of real estate and lease data, to provide confidence in the data held within systems not just at the point of go-live, but on an ongoing basis. To be able to leverage lease data confidently, to rely on auditable data to inform strategic decisions, to have visibility of the obligations across the portfolio, to identify key clauses and options directly linked to opportunities to drive down costs, are all of paramount importance. The introduction of AI to real estate and integration with core real estate management applications is a game changer, with the ability to move away from manual, time-consuming, error-prone data entry methods and instead leverage clean, structured, and complete data captured at source from lease contracts. With leases becoming more complex, technology needs to be robust, flexible, and scalable. We have seen more and more organizations incorporate additional departments like legal, along with senior stakeholder involvement as part of a procurement process, often with a project steerco, given real estate now has more of a seat of influence at c-suite level than perhaps ever before.

As a whole, customer and employee habits look likely to continue changing, lease agreement structures are evolving and becoming far more sophisticated and far reaching, new trends across occupier requirements are developing, and technology’s role in supporting and underpinning real estate strategy will continue to become more prominent over the coming months and years as the occupier space becomes more complex. It’s therefore absolutely key to the long-term vision of occupier organizations to fully understand their obligations beyond financials in order to leverage their portfolio, and technology will be fundamental to successfully doing so.

Learn more about getting the most out of your leases.

After a year of lockdowns and social distancing, governments around the world are starting to cautiously map out the roads to lifting restrictions. Vaccinations have now been administered to over half a billion people globally and are providing the world with a route back to something resembling the “old normal.” Vaccines are helping to reduce transmission and countries like the UK are already seeing a quick decline in the number of coronavirus cases due to its rapid rollout of vaccines.

The early success of vaccination programs provides hope that employees will be able to return to the office in the near future – even as new variants of the virus emerge – but the ramifications of COVID-19 will still be felt in workplaces across the world long after lockdowns have ended. Facilities managers in charge of day-to-day operations and tenant safety now have to shoulder the responsibility of ensuring workplaces are as safe as possible.

Adapting workplaces for the future

Even as vaccination programs continue to reduce the number of coronavirus cases and help ease restrictions, we’re unlikely to see a total and immediate return to offices. Many employees have now seen how remote working can improve their work-life balance and in many cases actually make them more productive. Global businesses have already kick-started projects that will determine when employees begin to return to the office and how frequently – with many expected to adopt hybrid working models.

Facilities managers will have the responsibility of helping people feel safe when they return to the workplace in the coming months. They need to ensure any and all new COVID-secure requirements are being met at all times and make certain the workplace offers an environment that meets all safety standards and guidelines for occupiers. Keeping these spaces Covid-safe means that businesses will have to consider tools that provide greater flexibility – for this, FM technology will be crucial.

Preparing for the long-term impact of coronavirus

The pandemic is likely to have a lasting impact on the way we think about work in the future. While some companies will adopt a fully remote working model, the vast majority will take a hybrid approach and have employees commute to the workplace a couple of times a week to help spark those impromptu chats and watercooler conversations that often lead to enhanced creativity in teams. However, in a post-pandemic world the future of work will likely mean that offices will be reconfigured for shared spaces. A survey from Gartner revealed that over 80% of global leaders plan to let employees work from home some of the time, which will lead most firms to reconfigure their office space. We might expect some companies to reduce the size of their commercial real estate as they continue to evaluate what to do with their square footage in a bid to identify cost-saving opportunities, while others might need more space to enable lower office densities and more collaborative spaces for when employees come in.

This need for more practical space planning, combined with employees potentially mixing working from home with hot-desking rather than having their own full-time, fixed workspaces, means the facilities manager will have to leverage PropTech and the data-driven insights it provides. Having the right technology in place is necessary for understanding how much office space they have, how much square footage they need going forward, and how to execute plans for rearranging floor plans effectively.

Reaping the benefits of PropTech

With the help of space management solutions that offer visibility of room layouts, seating configurations and calendar bookings, businesses are better placed to more efficiently use the space they have – thus cutting down on valuable real estate costs by making the best use of capacity. For the FM professional, this means that they can understand how people are using workspaces and their working patterns and can find innovative solutions to building safety and security issues.

In London alone, businesses will occupy an additional 13 million square feet of office space in the near future and New York is expected to grow its office space by 14.3 million square feet, so the need for FM teams to use software to plan office re-openings and ensure spaces promote the safety and wellbeing of those that occupy them is evident. Solutions that allow employees to book meeting rooms, rather than historically, simply walking in, and more stringent visitor management methods, such as having individuals signing in to record who guests are and who they are visiting, will create a more structured and controlled use of the environment.

Additionally, systems that track hot-desking, informing a manager of when a team member will be coming into a workstation, not only serve to effectively manage space but also help the FM team meet health and safety standards by ensuring that all necessary deep cleans of an area are carried out between uses. This will become essential in implementing acceptable safety measures so that employees can be assured that an organization is doing everything it can to protect everyone’s safety and well-being.

Likewise, technologies for scheduling collaborative spaces such as conference and meeting rooms will be critical to managing the number and flow of employees in an office and ensuring the deep cleaning of those spaces between uses. Furthermore, occupiers can reinforce health, safety and security within a building by utilizing PropTech platforms that record, track and manage everyone with a physical presence in an office at any one time – not just employees but visitors and contractors, providing arrival notifications and access permissions.

The future of the workforce is almost here

There is still a considerable amount of uncertainty surrounding coronavirus, but many businesses are already setting plans in motion for a hybrid working environment that combines the flexibility of homeworking with the collaborative nature of the office. The onus is now on FM teams to manage reconfigured office spaces and ensure they function well. The result is employees can not only stay safe but also improve efficiency and performance. By being equipped with the right tools, FM teams can work with corporate occupiers to prepare ways of working that will become the new reality even as we emerge from the pandemic.

This article was co-written by Brian Zrimsek, Industry Principal, and Arik Kogan, Vice President of Financial and Investment Solutions at MRI Software.

The COVID-19 pandemic has created the most challenging planning and forecasting moment for real estate investors since the Great Recession from over a decade ago. In comparison, the current period is both broader and deeper in its impact on real estate, creating substantial needs for technology to help (re)forecast 2021 and the next few years, in spite of all of the unknowns.

What makes this challenge more complicated for the real estate industry?

Unlike other market downturns in recent memory, there is a uniquely human element to the one that has acutely impacted the real estate investment landscape since March 2020. With the turbulence of the last year behind us, Green Street is already noting a valuation recovery and pointing to a continued positive trend.

Global transaction volume hit record lows through 2020 (anywhere from 13% to 61% across various regions, according to JLL), but these numbers were brought down primarily by asset classes that investors do not believe will bounce back hard and fast in the post-COVID global economy. There is plenty of capital available to be deployed, and while office and retail transactions have been limited, other asset classes, like apartments, student housing, and hotels, are being sourced and acquired eagerly by private equity investors.

How to create opportunity out of the challenge

These phenomena affecting the market, and core assets in particular, create an unprecedented challenge for investors, but also an incredible opportunity for those equipped to navigate it effectively. Strategic planning through this pandemic is not just an exercise in economics and math, but an intricate web created by the intersection of the market with human beings. We will be working from home. We will be shopping online. And when we don’t, we want health, safety, sustainability and an experience worthy of the effort.

As more factors, data points, and potential scenarios come into play for real estate investors looking to make quick and confident decisions, modern technology has become table stakes. For short-term planning and forecasting, integrated planning and budgeting tools make quick work of using past periods to drive future period forecasts, while providing for both general and specific assumptions to be put into specific planning scenarios and then rolled forward from one period to the next.

Driving multiple scenarios is important given the lingering uncertainty, allowing leaders to understand the likely bounds of the playing field in front of them.

Short-term, operational plans should then be used as inputs to longer-term planning processes. With a strong basis in operational realities, longer-term plans can be more reliable for further scenarios and strategic planning, including:

• Planning cash flow in support of expense or capital activities
• Identifying debt covenant opportunities or issues
• Projecting valuations as part of acquisition and disposition scenarios

Using data to model scenarios and gain consensus on plans is truly important given the uncertainty of the current time. In addition to gaining consensus over future plans, you must also ensure that you are leveraging data to both manage risks and ensure compliance.

Learn more about how you can plan to win with financial planning and analysis technology.

What if your real estate business could leverage technology powered by artificial intelligence without requiring coding skills on the part of the user? This is the potential that “no-code AI” offers – the ability to let non-technical experts utilize applications that can expedite data extraction and entry processes.

With the digital transformation taking place across the real estate industry, businesses are turning to technology to bring their operations into the modern era. Given its application to lease abstraction and lease management, artificial intelligence offers immediate value for real estate businesses and property management firms. With no-code AI for real estate, these organizations can quickly save time and money.

No-code AI could be a mainstay in the future of the real estate industry for businesses that want to harness the power of AI without the need for deep technical skills. Here are four benefits of no-code AI that can transform the real estate industry:

1. Scales with your business

No-code AI’s biggest advantage is that it can adapt to your business needs as they grow and change. End users don’t have to have a deep technical background to tailor the system or make adjustments. As your business expands, the solution can learn your new requirements over time and easily scale to meet your needs.

2. Allows automation of specific tasks

Most firms in the real estate industry are inundated with manual tasks, and AI can automate these to help commercial organizations and real estate occupiers save time. Processes such as lease abstraction, contract reviews, and hunting for terms and conditions in legal documents can be handled automatically. No-code AI gives real estate executives and analysts the ability to benefit from this tool, even without an IT background.

3. Quick training for regular tasks

With any AI-powered tool, the end user will need to “train” the system by introducing it to sample documents so it can learn what to look for and how to accomplish certain tasks. With no-code AI, this process can be done quickly, and once you’ve trained it to identify the type of information you need, whether it be a key term or critical lease clause, the system becomes more accurate every time it reads a document.

4. Can be used for predictive analytics

Artificial intelligence can be used for more than just documentation and lease management, however. While no-code AI can automate your business’s regular processes and pull key data from your leases, it also has the potential to be used for predictive analytics. AI has the capability to understand the terms that it extracts from a contract, which could give an occupier or lease administrator the ability to make better decisions and budget more accurately.

AI is one of many solutions that can drive the digital transformation of real estate organizations and help save time and money. While no-code AI is beginning to grow at a steady pace, MRI Contract Intelligence has been utilizing this technology since its inception. Contract Intelligence automates the data extraction and contract review process for commercial businesses and occupiers, helping them reduce the risk of costly revenue leakage and providing valuable insights hidden in documents. Learn more about how MRI Contract Intelligence can benefit your business.