HEIMAG München enhances real estate management with an SAP ERP solution from IBM Global Business Services

Published on 22-Dec-2010

Validated on 03 Dec 2013

"The IBM Express solution and the team from IBM Global Business Services have enabled us to deploy an SAP solution that simplifies and enhances almost every aspect of our core business processes." - Christian Kiefer, Head of Rented Apartments and Residential Property Management at HEIMAG

Customer:
Heimag München GmbH

Industry:
Property & Casualty

Deployment country:
Germany

Solution:
BA - Business Intelligence, Enabling Business Flexibility, Enterprise Resource Planning, Information Infrastructure, Information Integration, Optimizing IT, Optimizing IT

IBM Business Partner:
SAP

Overview

Heimag München GmbH is a real estate management company that builds, rents, manages and maintains apartments in Munich, Germany. The company employs more than 50 people and generates annual revenues of approximately €11 million. Since 2008, 70 percent of HEIMAG has been owned by GEWOFAG, Munich’s largest real estate management company, which owns 30,000 apartments and manages 4,000 others across the city. The remaining 30 percent belongs to GWG Baden-Württemberg (the Flat and Trade Building Community of the Federal State of Baden-Württemberg).

Business need:
When real-estate specialist GEWOFAG acquired HEIMAG, moving to a new ERP platform that would enable precious data from the new subsidiary to be integrated with group systems was a top priority. With time at a premium, GEWOFAG wanted to extract value from HEIMAG’s property portfolio as rapidly as possible. HEIMAG used proprietary software, hosted by a third party, with little control over data quality, and no ability to extend the solution. Financial planning functionality was not available within the system, with data transferred manually, often causing errors and re-work.

Solution:
With the help of IBM Global Business Services, HEIMAG implemented SAP ERP 6.0 and SAP Real Estate Management (using the IBM Express Real Estate for SAP Business All-in-One solution). The IBM and HEIMAG team deployed the solution within six months for 25 users, and additionally went live with SAP NetWeaver Business Warehouse and SAP Strategic Enterprise Management.

Benefits:
HEIMAG now operates as an integrated subsidiary, providing accurate data to the parent company, on time. Using SAP applications has eliminated checking of keyed data and manual re-work. Data quality has improved, with no conflicting information sources or gaps in real-estate data, enabling easier audit and compliance with financial regulations. Data from HEIMAG flows upwards seamlessly, allowing GEWOFAG to include HEIMAG information in its business analytics, reviewing financial performance across the integrated enterprise.

Case Study

To read a German version of this case study, click here.

Heimag München GmbH is a real estate management company that builds, rents, manages and maintains apartments in Munich, Germany. The company employs more than 50 people and generates annual revenues of approximately €11 million.

Since 2008, 70 percent of HEIMAG has been owned by GEWOFAG, Munich’s largest real estate management company, which owns 30,000 apartments and manages 4,000 others across the city. The remaining 30 percent belongs to GWG Baden-Württemberg (the Flat and Trade Building Community of the Federal State of Baden-Württemberg). To operate effectively as part of the GEWOFAG group, HEIMAG needed to adapt its business processes and IT systems to align with the parent company’s best practices.

Company-level objectives
“We were using an ERP system called GES, delivered as a hosted service,” explains Christian Kiefer, Head of Rented Apartments and Residential Property Management at HEIMAG. “As a small company, we didn’t have sufficient in-house IT resources to run our own system, so this model worked well for us.

“However, the system didn’t offer all the functionalities we needed, so we also used various spreadsheets and other processes – particularly for reporting on vacancies and maintenance costs, which are critical areas in our business. When we became part of the GEWOFAG group, these manual reporting processes were no longer adequate, so it was clear that we needed to move to a new ERP platform.”

Group-level objectives
From GEWOFAG’s perspective, it was also important for HEIMAG to adopt a new ERP system. GEWOFAG had been using SAP ERP applications for more than ten years, and had developed a sophisticated standardized template for managing core business processes such as accounting, planning and budgeting, centralized purchasing and internal payments across all of its group companies. To simplify business operations and reduce the cost and complexity of IT management, the GEWOFAG IT Services division made it a top priority to bring HEIMAG into the group SAP environment.

Roland Kaiser, Head of SAP Applications at GEWOFAG IT Services, comments: “With a homogeneous IT landscape based on SAP ERP applications, we knew we would be able to manage our core business processes more effectively, both within HEIMAG and across the whole group.”

Building on an IBM Express solution
The SAP template that GEWOFAG had developed was based on the IBM Express Real Estate for SAP Business All-in-One, SAP Strategic Enterprise Management and SAP NetWeaver Business Warehouse solution.

This IBM solution provides all the basic functionality needed for efficient property management according to standard best practices within the industry. The majority of the customization used in the solution is aligned with SAP standards, which enhances compatibility with SAP upgrades. Moreover, it has been used in numerous real-world deployments, so both HEIMAG and GEWOFAG could be confident that it would deliver a simple and rapid implementation.

Consultants from IBM Global Business Services ran a number of workshops with the teams from GEWOFAG IT Services and HEIMAG to analyze the data available in the legacy system and discuss how best to migrate it into an SAP environment. The three teams used a ‘fit-gap’ approach – looking at both the existing processes and the standard template, identifying where the differences are, and deciding whether to change the processes, the template, or both.

As part of this approach, IBM Global Business Services drew on its Business Analytics and Optimization capabilities to help GEWOFAG turn data into insights. This offers increased visibility of financial information that would help improve analytics and optimize data flows through the subsidiary HEIMAG business and upwards to the parent GEWOFAG company.

Meeting a tight deadline with IBM Global Business Services
“At HEIMAG, we had a target of moving the SAP environment into production at the start of the new year in January, which gave us just six months to complete the whole implementation,” comments Kiefer. “This was a very tight deadline for a project of this scale – but IBM Global Business Services helped us to achieve it.”

Kaiser adds: “Using the fit-gap analysis in combination with the SAP template developed by IBM and GEWOFAG saved us a lot of time, because it minimized the amount of SAP development and customization work we had to do. In parallel with the HEIMAG project, we were also restructuring the entire group’s accounting environment, so it is impressive that we were able to meet the deadline. We have built a good relationship with IBM Global Business Services, and they work well with our team.”

IBM Global Business Services helped to create a standardized set of documentation that was used throughout the project, and implement protocols that helped all the different project stakeholders communicate effectively. The team also created a framework for testing and error analysis that helped to improve data quality and minimize re-work during the migration phase. As a result of cleansing the data, substantial performance enhancements were realized.

The solution went live on schedule, and HEIMAG immediately rolled it out to the 25 users who manage the company’s core business processes. The new landscape is based on the SAP ERP 6.0 application, and offers functionalities for financial accounting, controlling, corporate finance management, flexible real estate management, land use management, investment management, materials management, project management and property maintenance.

The company has also deployed SAP NetWeaver Business Warehouse and SAP Strategic Enterprise Management to generate consolidated financial and managerial reports, enable accurate planning, budgeting and forecasting, and create balanced scorecards for performance management.

Better data quality
From HEIMAG’s perspective, one of the most important benefits of the solution is that it increases the accuracy, consistency and completeness of business data.

“When we first started using the system, we noticed some problems with the master data that had come from the legacy platform,” says Kiefer. “SAP ERP provides much higher levels of transparency, which enabled us to identify and fix errors that we couldn’t even see in the old system!”

Enhancing accuracy
Compared to existing spreadsheet-based processes, the SAP solution offers much more powerful ways to check and validate data – helping to enhance the accuracy of reports and forecasts.

“For example, previously we had a spreadsheet that we used for recording the reasons why rental agreements were terminated,” says Kiefer. “Someone had to check this spreadsheet by hand, and actually walk around and ask people if they had updated it correctly. Now, with SAP, when you create a termination in the system, it prompts you to enter the reason, and all the data is held in one place. If something is not up to date, or some information is missing, you notice it at once. As a result, when you run a report, you can be confident that it contains all the relevant data, so it’s a good guide for decision-making.”

Kaiser agrees: “Now, finally, we feel like the data actually ‘belongs’ to HEIMAG. In the past, although the data existed, it wasn’t always possible to find it or be confident in it. With SAP, the data structure is so transparent that it is easy for employees and managers to get a good overview.”

Consistency and completeness
“Another important factor to stress is the comprehensiveness of the integration that SAP provides,” continues Kaiser. “From the customer’s phone-call requesting a repair through to the craftsman’s invoice, everything is within the scope of the system. And since there is only one system, there is only one version of the truth, so we can be sure that the information we have is consistent.”

Kiefer says: “I don’t really ‘speak SAP’ from a technical perspective, but from a business perspective, it is very impressive. Our old system didn’t handle financial planning and budgeting, so we really notice the difference now that we are able to handle these functions within a single system. I can see not only how much we have spent, but exactly what we have ordered and what our future liabilities are. And that makes it easier for me to decide whether we have enough budget to start an activity, or if we should wait until more budget is available. Through the integration of data between the real estate management and financial accounting and controlling components, I can control and manage the maintenance budget much more effectively – and I can even do it in real time!”

Easy adoption
Before this project, HEIMAG’s employees had no experience with SAP software, so there was a degree of concern that they would find the new system difficult to use. However, the GEWOFAG IT Services team worked with IBM to provide comprehensive training and boost their skill levels rapidly.

“There’s a perception that because SAP ERP is such a sophisticated system, it is daunting for new users,” says Kaiser. “Fortunately, we were able to draw on GEWOFAG’s long experience with SAP and design a training program that made it simple for the HEIMAG users. As a result, they realized that the solution was less complicated than they originally thought, and even the SAP novices were able to use the system almost instantly after the migration.”

Conclusion
GEWOFAG and HEIMAG have achieved their main objective of creating a single, standardized system landscape within the group, which will promote business standardization and collaboration between group companies. The enhanced reporting capabilities that SAP Strategic Enterprise Management provides are helping decision-makers within HEIMAG guide the business more effectively, and also help GEWOFAG senior managers assess the performance of HEIMAG within the group.

“Looking at an even wider perspective, the improved ability to manage our data within HEIMAG and across the GEWOFAG group delivers key competitive advantages,” says Kaiser. “For example, the banks are emphasizing more and more that companies need to have their finances under tight control. By demonstrating that we are in control of our data, we show that we are a lower risk for investment compared to other companies in our industry.

Kiefer concludes: “The IBM Express solution and the team from IBM Global Business Services have enabled us to deploy an SAP solution that simplifies and enhances almost every aspect of our core business processes.”

Products and services used

IBM products and services that were used in this case study.

Service:
GBS ISV Community: SAP, IBM-SAP Alliance, IBM Global Business Services

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