In a previous Blog What is IWMS Anyway? I talked about how much I disliked the acronym IWMS as it tries to broadly describe a wide class of products that really are very different. This is most true for retail, restaurant, hospitality, healthcare and other companies that drive most revenue from multiple locations that directly serve customers. Companies with multiple revenue generating locations have a largely different set of needs than large corporate users who may have as much or more square footage but whose revenue does not come from direct sales of some kind at each location.
This Blog will focus on the value of IWMS applications, or more aptly, Location Performance Management systems for clients with multiple revenue generating locations that directly sell to customers; for the sake of brevity I will refer to all of these types of users as “location managers”. Examples would be a clothing retailer, a quick service restaurant, a chain of MRI centers, a quick service oil and lube shop, an investment center or a bank branch.
While it is not true of all location managers it is extremely common to hear this story on first meeting.
We have several systems from different vendors for construction project management, work order management, mapping, demographics, lease administration, lease analysis and capital project management. These systems are used across the real estate, construction, facilities, legal, architecture and finance groups. Everyone’s been choosing their own systems for years. All the systems work fine for each area but over time, as changes occurred, it caused inconsistencies in the systems and now we are not even sure how many locations we have and can’t be confident in a facility address, square footage, equipment warranties and many other key details. Our executives have to look at reports from different systems and try to match up location details that are diverging more and more with time.
These location management companies begin to see the shortfall in the best of breed approach they have taken and begin to consider Location Performance Management IWMS to consolidate their data. As a result, some of the common benefits a location manager will see from implementation of a location performance management IWMS are:
Trust in the system
One of the biggest problems the problem described above causes is a lack of trust in the systems of record. Each group has their own but, because of the inconsistencies across the company, the accuracy of all of the systems comes into question. It limits decision makers’ willingness to use the information in the system to make critical decisions hence slowing the entire process down. By implementing an IWMS and thus creating a single system of record for all location data, all inconsistencies are eliminated, all users in all areas are using the same underlying database and over time all gain trust in the system when making critical decisions.
If this one wasn’t true it would be really hard to justify implementing an IWMS. Evidence from companies that have implemented IWMS for location management has shown huge savings in a number of categories. One of our case studies even shows one company that achieved payback at go-live just based on the savings from replacing redundant systems. Savings can come from:
Replacement of redundant systems – when a company implements an IWMS they often replace one or more systems that have both an external (maintenance) and internal costs(IT charge throughs).
Fewer errors/changes – using a real-time system that provides online collaboration across the entire lifecycle and every player in it (internal and external) significantly reduces mistakes and costly changes related those mistakes.
Reduced travel – when a real estate professional can find a site, research it, look at an aerial image, collect leasing details, check access and traffic counts all from their desk at corporate, the number of trips related to securing one site are reduced. Of course there will have to be some travel to see the location before you secure it, but use of IWMS systems typically cut the required travel by 20% to 50%
Lower Total Cost of Ownership (TCO) – This does not apply to all IWMS systems but those that allow for client control and configuration over their own environment allow for a low long term TCO.
Less postage, printing – with the ability to do design reviews and site meetings online, there is no need to print out and mail dozens of packages of paper around the country and the world including costly blueprints. One customer provided evidence of a $2,000 savings per construction project using IWMS project management.
Smarter work orders – when the work order system knows the remaining value of each piece of equipment and flags a work order with a repair that exceeds that value, costly mistakes are avoided
Slower staff growth - As the existing staff becomes more productive, the need to hire more staff occurs more slowly. With an IWMS, the existing staff can get so much more done, and better, that staff additions occur more slowly than they had in the past.
While this is often deemed intangible when calculating an ROI, users of IWMS systems universally note a noticeable difference in productivity once the system has been implemented and is in full use. One case I remember well was a construction coordinator who claimed to get 40+ calls a day from people involved in any project before the system was implemented. Once the system was fully implemented across all internal and external users she received at most 3 calls a day and often referred those information requests back to the system.
Gains in productivity can come from:
Effective use of time - staff spends less time searching and more time analyzing opportunities
Transparency breeds effectiveness – with an online collaboration system, there is nowhere to hide; any work that is behind that is impacting a date will be obvious and escalated.
Single solution is simpler – using one system with one user interface means people will become competent in the system faster as compared to using multiple systems
Easy to find everything – with one system for the entire lifecycle, users know where to find information and most IWMS systems make it easy to search and find all key information
Access from anywhere – 100% web-based systems mean anywhere you have an Internet connection you have the whole system.
This is the one benefit that is hardest to believe for many location managers. It’s easy to show them how IWMS solutions can cut cost and increase productivity but why would revenue increase. In fact this is typically, long term, overwhelmingly the biggest pay-off.
Some reasons revenue will increase with time:
Faster to market – using site deal analysis features of some IWMS applications will lead to quicker lease signings, faster projects and quicker grand openings. More sales weeks equals more revenue.
Better locations – with integrated decision analysis tools including mapping, demographics and sometimes prediction models, IWMS users make better location decisions and end up with higher revenue generating locations
Predictable revenue streams – the ability to monitor the development process and predict new revenue/sales weeks in a quarter or year allows for better investment of capital leading to more revenue
Please understand that I have just scratched the surface of the benefits of a Location Performance Management IWMS for location managers. There are many, many more benefits; I attempted to summarize the most obvious and significant.
Lx IWMS has been helping retailers, restaurant, banking, finance, healthcare and other location management companies for almost ten years. With the recent partnership with Buxton, we now have far and away the most effective product for location managers everywhere. No other IWMS solution can provide the depth of location analysis inside a complete location lifecycle management system.
This blog was contributed by Lucernex executive, Joe Valeri.