CB Richard Ellis Delivers Increased Value with PROACTIS
PROACTIS helps closely control expenditures for property
management clients.
Profile
CB Richard Ellis Group, Inc, (CBRE) a fortune 500 and S&P
500 company headquartered in Los Angeles is the world's largest
commercial real estate services firm. The company has over 30,000
employees and serves real estate owners, investors and occupiers
through more than 300 offices worldwide.
CBRE's UK Property and Asset Management service provides owners
with lease management, accounting, risk management, facilities
management, and procurement services for commercial properties
including shopping centres, office buildings, and industrial
estates. Operating out of 12 UK offices with approximately 460
employees, the team manages 1,300 properties and delivers service
to 12,000 tenants. They demand and collect rent and service charges
of more than £1.3 billion each year. In terms of procurement, they
have an annual spend approaching £200 million, with over 2,000
suppliers and over 100,000 invoices a year.
Challenge
When property owners contract with CBRE to manage their assets,
they expect the CBRE team to leverage property management expertise
and local knowledge to operate their investments to maximise
long-term value and reduce exposure to risk and financial
shortfalls. Among other things, that demands close control of
expenditure for services such as cleaning, maintenance, security,
landscaping, and all activities required to keep a property in top
condition and ready for sale. It also requires careful management
of a wide range of suppliers, as well as proper, and prompt,
payment of utility and tax bills, and other invoices. Both the
owners and the tenants who are in receipt of and pay for the
services expect clear, accurate and timely accounting for all
operating expenses.
That's a tall order when CBRE is responsible for full service
charge management at over 850 properties. This level of service can
only be provided using well-conceived and consistent management
processes, such as the way in which goods and services are procured
and supplier payments are handled.
The Property and Asset Management executive team recognised that
a comprehensive organisation-wide procurement and invoice
processing system was needed. The system to be designed to
effectively support the growing scope of the business and to
provide great customer service. They also knew that such a system
would put them ahead of the competition in terms of the value they
could offer clients, and so it was made a top priority.
Why PROACTIS?
CBRE wanted a procurement solution they could put in place
quickly, but also a solution that had the framework to become a
true spend control system for all of their properties. "We wanted a
system that would be a significant value-add to our clients and our
tenants," says Matthew Burnham, CBRE's Property & Asset
Management Chief Operating Officer. "As such it needed to help us
be more efficient in procurement while at the same time enabling us
to accurately record and control expenditure across over 850
separate entities. The system needed to ensure that we had control
and visibility of not just what we are spending but also what we
are planning to spend, thereby significantly improving financial
control."
CBRE actually met PROACTIS when they acquired the software
company that CBRE had initially selected. But when the CBRE team
saw the PROACTIS solution, it was clear that it would meet their
needs quite well and the decision to adopt the system was an easy
one. The fact that PROACTIS was available as a hosted solution made
it even more attractive. That meant the CBRE team could focus all
their attention on deployment and use of the system, and let the
PROACTIS team handle day-to-day technical operations.
Results
As hoped, CBRE implemented PROACTIS very quickly, achieving full
deployment across all properties in just nine months. The system is
now in use by over 350 employees ranging from central office
personnel to on site operations people. Frequent users also include
regional facility managers responsible for multiple properties who
are often working on the road using laptop computers with mobile
Internet access. The system is integrated with four different
financial systems to support CBRE and various property owners.
Using PROACTIS workflow and authorisation rules, most purchases
are made directly by the authorised employees. If the purchase
exceeds a specified value, risks an over-budget situation, or is
otherwise outside the norm, it is automatically routed to a manager
for further approval.
"The PROACTIS system has been very well-received," says Lee
Tanner, CBRE National Procurement Manager. "Once people got
accustomed to using the computer for purchases, they got
comfortable with it pretty quickly. They generally sing its praises
today."
Tanner adds: "Some of the people who appreciate the system the
most are the site managers who are responsible for the budget of
their facility. I understand that - having been a site manager in
the past, I would have given anything to have the budget control
and visibility they have now with PROACTIS."
Invoice processing is another area where the system is helping
to streamline things. Many expenses are necessarily based on
invoices alone - for instance phone, utility, and tax bills. CBRE
is already using PROACTIS with large suppliers like the phone
company and internal CBRE charges, and is about to implement
electronic invoices with utility providers. Soon, about 40% of all
invoices will be received electronically. That plus the use of
purchase order matching and workflow to verify service delivery by
the originator, has greatly reduced paper based processing and
enabled the AP department significantly increase control of the
payment process.
PROACTIS is helping with strategic procurement issues as well.
"We now have visibility of exactly what we're doing with our
suppliers - what we're buying, how much we're spending, delivery
performance, etc. That's enabling us to proactively identify and
resolve issues, and to work towards obtaining even better value
with our contracts," says Tanner.
Burnham summarises by saying: "It was no small feat to establish
a single procurement system that enables us to manage 850 different
properties as separate entities. But in doing so, we now have one
of the best spend control system in our business. We believe
PROACTIS gives us the perfect platform to ensure that we are at the
forefront of delivering both value from procurement and control of
expenditure management."
