HP Leverages Integrated Real Estate Portfolio System for Streamlined Performance

Published August 2005 The merger of Palo Alto, Calif.-based Hewlett-Packard (HP) and Compaq initiated a comprehensive reevaluation of the company's combined real estate portfolio and space management systems. HP's Real Estate and WorkPlace Services group faced the challenge of integrating a diverse set of Real Estate (RE) and Facility Management (FM) data systems that would track information on the combined companies' properties worldwide, which amounted to tens of millions of square feet. Through the consolidation process HP created a powerful integrated space management system that functions on a global level to enable the management of the real estate portfolio and its space utilization.

" Delivering on the economies of scale was a merger imperative. And quick execution was essential. To accomplish this, we followed the principle of 'adopt and go' to consolidate key applications we already had, and then we re-built data integration architectures at a global and corporate scale," says Bob Sawhill, Information Technology Program Manager for HP's Real Estate and WorkPlace Services group.

The real estate portfolio system provides key facilities management information essential to important decision-making processes. In fact, this information helped in developing and implementing real estate consolidation plans that achieved a 20 percent reduction in space, representing a savings to the company of approximately $200 million a year. Therefore, the executive management team launched a company-wide initiative around development of the system. In addition to eliminating redundancies and refining procedures, HP wanted to increase data quality and overall value to system stakeholders.

"This wasn't just about IT systems reductions and cost cutting. It was also about extending the technology to a broader user community, increasing our capabilities, and improving what we deliver," says Sawhill.

The initiative forced HP to completely reevaluate its FM data systems, data gathering processes, and reporting. Additionally, the initiative required quicker execution through adopting the best processes, standardizing on existing applications, and leveraging corporate systems. Solutions utilized what HP already had, and was not about reengineering, reinvention, or analysis paralysis. The main challenge facing Real Estate and Workplace Services was centralizing the two disparate building asset data systems and several space management systems into one globally scaleable solution. To achieve this, HP developed an aggregated network of off-the-shelf space management Computer Automated Facility Management (CAFM) software, a powerful interactive Business Intelligence (reporting) web portal, and a custom integration layer built in-house that links it all together.

One of the ways HP measured success during the merger was by tracking the number of systems that were phased out. In addition to cutting software costs, significant savings were achieved by eliminating hardware expenses and ongoing system management.

"There were considerable cost savings associated with eliminating unnecessary systems. For every application that is retired, there are reductions in the associated servers, training programs, system upgrades, hardware maintenance, and multiple software experts. By consolidating everything down to one product on a global level, we streamlined the operation and are able to gain economies of scale, such as volume price discounts for software and maintenance contracts," says Sawhill.

Prior to the consolidation effort the company had six different space management applications and numerous spreadsheet-based systems worldwide, all of which were reduced to one. Now, instead of maintaining dozens of regional and site-specific databases, there are three global servers providing the information.

"We achieved a 70 percent reduction in software applications," says Sawhill.

Achieving global centralization of system hardware proved to be a challenging task for the space management (CAFM) application. HP's Consolidated Client Infrastructure product team implemented HP's own Blade PC—a "thin client" server system that eliminates the need for individual desktops—which shifted application computing and data traffic to a single data center.

HP consolidated the systems support into global functional programs and a centralized IT support. Real Estate and WorkPlace Services also shifted its software and hardware support to HP's own managed services organization, and thus reduced support costs, gained 24 hour coverage, and improved system reliability.

"Many of our internal user groups in Europe, Latin America, and Asia were not automated before and were unable to implement their own local CAFM systems because they didn't have the necessary resources. Global automation programs are easier to get onboard with, which has increased our CAFM adoption in those areas considerably," says Sawhill.

Developing a scaleable system necessitated the standardization of processes, software, and the data itself, but establishing corporate- and industry-wide standards was no easy task. Doing this required corporate-wide consensus, which took time to develop.

"There really is a lack of standardization in the RE/FM industry. We struggle with this in all of our businesses. Not only was it difficult to achieve consensus within our own organization worldwide, we had to work with other corporate divisions such as finance, IT, HR, and external RE/FM suppliers so we could link to their systems as well," says Sawhill.

A guiding principle in the consolidation process was "one source of truth." HP wanted to leverage its primary data sources and reference systems to eliminate redundancy and increase data quality.

"Too often people get their information from different systems that disagree. We would go to one reference system for personnel information and one reference system for finance information," says Sawhill.

To resolve this issue, Real Estate and WorkPlace Services developed a central data repository, built around a standard Microsoft SQL server database, that would be used as the sole reference system for space, finance, and personnel information gathered from the corporation's other systems. Additionally, the real estate portfolio system is HP's corporate source system for building information. The building data is output into a corporate directory used by finance, IT, HR, procurement, and other business functions.

"The flexible system architecture is fundamental to achieving corporate-wide integration and adaptability," says Sawhill.

Real Estate and WorkPlace Services also recognized the importance of having accurate data in a single repository system. So the group set out to build in quality from the beginning by conducting automated validity checks on all data.

"With this system, validation procedures are executed whenever we are transferring or submitting new data," says Sawhill

Because the automated data cleansing processes confirm accuracy whenever information is transacted, the system is the gold source for facilities data throughout the organization. If data is submitted from an outside source that does not correspond with master records, it is denied and flagged for verification.

The real power in HP's real estate portfolio system comes from a high level of integration between three layers of operation.

The top layer is an access portal that allows users to analyze content-rich FM and RE information from any networked computer. The bottom layer consists of the basic space information transaction systems, which are off-the-shelf solutions, and outsourced lease management supplier's systems that handle the day-to-day transacting of FM data.

The key element tying everything together is the integration layer. Built by the HP team, it aggregates information from the other layers and links them to the data repository and other corporate systems. This layer enables the interactive output and data cleansing processes, and allows HP to maintain the flexibility of changing out other systems and providers.

Despite achieving a high level of consolidation Real Estate and Workplace Services didn't want to be reliant on a single software application or outsource service provider. Hence, the flexible adaptability afforded by the integration layer has been a crucial factor in development of the portfolio management system.

"We need to be able to plug in and out of other systems and vendors. The next time we go through a merger, we want to adapt quickly, not rebuild the entire system," says Sawhill.

The integration layer and central data repository facilitate this arrangement by allowing HP to change vendors and software products based on the corporation's needs, but retain all core information and functionality in-house.

"We see this system as a powerful foundation that will enable us to adapt to change, and to further leverage across workplace functions in the future," says Sawhill.

By Johnathon Allen