It is a common myth that SAP RE-FX is a better fit only for leasing companies which have huge real estate assets. In this blog, I would like to bust the myth and elucidate the benefits of RE-FX implementation across various industries / sectors to improve ROI on Corporate assets.
Every large scale business invests heavily on real estate assets such as Land / buildings/ Plants etc either by leasing or acquiring. Businesses need an integrated solution for optimum utilisation of these assets. SAP RE-FX perfectly fits into this solution portfolio. RE-FX can be implemented in every company or corporate where real estate assets are used either for internal or external use to control its availability, track revenue, account expenses and report margins against these assets.
The module offers several features such as portfolio management, space planning, visual aids to track the assets, contract management, tools for optimum resource allocation etc. It is tightly integrated with various modules such as SAP FI/CO/PS/MM /TRM with respect to capturing value flows, integrated with Plant maintenance module in terms of equipment and maintenance schedules. CAD drawings software can be mapped to RE-FX assets to visually experience the space to better manage its availability and allocation. The buildings / Lands can be viewed on google maps as well for tracking purposes.
Real estate module can basically be divided into 2 categories
- Commercial Real estate
- Corporate Real estate
The indicative list of industries where the module can be implemented are given below:
- Commercial Real Estate :
- Leasing companies
- Real Estate Management companies
- Third party consulting companies managing other’s properties / assets.
- Fuel marketing companies
- Telecom Companies
- Utility companies
- Retail outlet companies
- Financial Institutions such as Banks/ Insurance companies/ Financial institutions
- Manufacturing companies with huge buildings/ Plants / Other real estate assets across various locations
- Service sector such as Airports/ Railways/Transport companies
- Agricultural businesses.
2. Corporate Real estate
- All corporates houses with huge space can use this functionality to control available space as an internal control mechanism. Features such as Reservations, Move planning, Long term seating arrangement etc are very useful to ensue proper utilization of scarce resources.
Due to the wider acceptance of RE-FX module cross industries, SAP RE, which initially was introduced as an industry specific solution, later transitioned as a generic one and is available to all SAP customers for use under SAP Accounting .
In recent times, SAP RE-FX has been a focal point among industry circles due to the changed regulations in IFRS 16 – Leasing ,wherein changes were introduced with respect to accounting treatment of leasing . Companies which have implemented SAP RE-FX will have a smooth transition to comply with the new accounting regulation, whereas others will have a herculean task to meet those requirements due to their complexity of implementation.
Based on the above, it is clear that RE-FX implementation ensures proper utilization of space thereby increasing accountability and helps in better space management. Many manual processes can be automated, assets can be remotely controlled and monitored against any misuse, thus achieving a significantly higher ROI on the corporate Investments.
Welcome to the fascinating world of “SAP Flexible Real Estate Management”
Comments on the above blog are most welcome.