It all began with the consolidation of companies in the group
CREAM Real Estate Group (previously Uni Reality) is part of a group of companies owned by the CREAM closed investment fund, which focuses on investments in the real estate market. The Fund currently owns 120 properties and more than 300 pieces of land throughout the Czech Republic. During the past five years CREAM Real Estate has become the only service organization for the Facility Management Fund and it gradually took on the agenda of a total of 15 companies. The Fund had acquired them together with other individual properties. The process of consolidating property management into one company had already begun in 2006. That meant that each of the 15 companies had its own accounting system, had its own procedures set up, and a system for document management for managed properties. There was no unified system for data exchange between the individual companies. Financial statements for the entire group were put together through manual consolidation of the accounting results of individual businesses. This brought about unnecessary costs that the Fund decided to eliminate through the consolidation of all companies under the management of one service organization. As part of this strategic move, a decision was taken to implement a unified enterprise information system and a professional system for facility management with the aim of achieving maximum efficiency for business operations and to unify all processes.
The company decided to use a unified platform for all information systems. Bearing in mind the fact that the chosen CAFM and DMS solutions used Windows Server/SQL Server, the company requested that the ERP system also be built on this platform and also that it be international and support both national accounting standards as well as IFRS. Therefore it chose Microsoft Dynamics AX, which was the only platform to fully meet all the company’s requirements.
Microsoft Dynamics AX was the company’s only choice
CREAM Real Estate was the first to look for a quality specialized solution for CAFM (Computer Aided Facility Management) that could visualize CAD drawings of individual buildings and connect these drawings with information about the rented space therein, extract information from them about the technological wholes including related operational costs (related invoices and orders), etc. At first the company looked for a large multinational company, but none of those solutions offered a Czech-language version, which was an obstacle for a Czech company with Czech employees. Therefore CREAM Real Estate ultimately contacted the Czech company, Alstanet, and chose its solution, Alstanet Facility Management (AFM) built on a Microsoft platform. Similarly, the document management system (DMS) the company chose also used a Microsoft platform. So when CREAM Real Estate began to select an enterprise information system, the company decided that, on grounds of efficient IT infrastructure administration and maintenance, it would have to use the same platform. The company was also looking for an international system that would eventually allow it to expand operations abroad in the future and which would be able to provide auditable accounting reports both according to local legislation as well as IFRS. The solution also needed to come from a trustworthy supplier that would guarantee future support and system development. The only manufacturer who could meet the company‘s requirements was Microsoft. CREAM Real Estate therefore issued an internal tender process for an enterprise information system from Microsoft. Several certified Microsoft partners immediately responded to the call for tender. Ultimately the company chose Microsoft Dynamics AX and a partner from the same region that suited it most.
Another partner took on implementation
During the implementation process however it happened that the given partner did not have sufficient experience in the field of facility management and could not effectively counsel the company on internal policy issues that came about with consolidation of such a large amount of diverse companies with various original owners. Thus CREAM Real Estate contacted the runner-up in the tender, AutoCont. It had to first sort out the personnel part of the whole implementation and gain the backing of future users of the new system. AutoCont was ultimately able to do this and so there was no problem with successfully completing the implementation, neither from a technical nor a procedural point of view. Thus CREAM Real Estate was able to as of 1st January 2011 move completely to a new system at the beginning of its fiscal year.
Microsoft Dynamics AX fully automated accounts receivable management
Microsoft Dynamics AX introduced a whole range of essential changes to business operations. As such it was meant to look after the company’s financial management and to automate certain key processes. Part of the implementation also involved the close interconnection with Alstanet Facility Management (AFM) and the relaying of important data to Microsoft Dynamics AX, i.e. about renters and their rented space, operational costs for the technical wholes of individual buildings, about approval of invoices received from renters/leasers or service providers as pertained to individual spaces and extracting information from them, i.e. supplier or customer lists. Indeed the automation of debt collection management became the biggest plus of using Microsoft Dynamics AX. It works for all types of properties – industrial, commercial, logistical and residential. Three days after an invoice is due, the system automatically sends the debtor an informative text message and also informs the relevant sales reps about the fact that a debt has arisen. 7 days past an invoice’s due date, Microsoft Dynamics AX generates a personalized e-mail containing all necessary information for making payment and sends it to the relevant customer. It also informs the sales rep as well. 14 days after an invoice is due, the system produces a written reminder that the mail office puts in an envelope and dispatches by post. 21 days after an invoice is due, the system produces a contract cancellation and the relevant fine is charged and automatically entered into the company’s accounting as an outstanding debt. The company also motivates its sales reps to take an interest in customers‘ payment morale. In the Microsoft Dynamics AX system, each sales rep directly sees information on the overall status of outstanding debts for their customers and part of their bonuses are tied to whether their customers pay on time. Thus they are motivated to select trustworthy renters and also to proactively sort out payments that are overdue. In the past the company could not use a similar system, i.e. when invoices and payments were matched up manually or by using local accounting software in each company in the group. Payment data was not current and invoices were often manually entered in company accounting with as much as a several week delay and always in individual batches. It was only thanks to a switch to real time accounting and use of an automated debt management system that the company’s investment into Microsoft Dynamics AX was recouped during the first six months of its implementation.
Microsoft Dynamics AX simplified the company’s efforts to become an energy trader
This was not however the only benefit. In a further step the company decided to enter the energy trading market. This was relatively easy thanks to the interconnection of the Microsoft Dynamics AX information system and the AFM and DMS, which gave the company an immediate, detailed overview of each individual rented space and energy consumed in individual buildings. By becoming an energy trader the company was able to secure energy supplies to all its buildings on its own and it began to invoice energy costs on a monthly basis based on actual consumption. In contrast to the situation where the company had to re-invoice energy costs to its distribution company and sort out payment in the form of deposits, a part of the demanding administration of rent contracts stopped/started during the course of a year was removed and also further improvements to cash flow and lowering risks of non-paid accounts receivable exceeding deposits paid by renters was achieved.
Company builds its own solution on top of Dynamics AX within a couple dozen hours
Bearing in mind the close interconnection of key business processes for all information systems, company management decided to develop its own application that would provide individual users – mainly members of management and the sales force – an immediate and fast overview of data from each system that interested them most. Thanks to the fact that the company had decided in the past to use an identical platform, Microsoft Windows Server/SQL Server, for all three systems, development of such a tool was very simple. Thanks to the openness of the Microsoft Dynamics AX system and use of the Microsoft SQL standard database technology, the company was able to develop such a system on its own, without the need for assistance from an implementation partner. Programmers decided to use the PHP and MySQL platform that they knew well and which is fully supported by the Microsoft Windows Server 2008 system for developing an e-commerce application. Development of the first version took a mere 40 man-hours. Dozens of users in the company could begin to work with the e-commerce application and data from all three systems shortly after implementation of Microsoft Dynamics AX. Today e-commerce is in fact the application that these users refer to first.
Main Solution Benefits:
- Processing of all invoices in real time
- Constant immediate overview of the company’s financial situation
- Automated system for accounts receivable management
- Significant cash flow improvement thanks to elimination of overdue accounts receivable exceeding renter deposits
- Support for further company growth and for new activities such as energy trading
- Significant expedition of preparation of consolidated financial results for all properties in the group managed by the Fund
- The company is prepared for eventual expansion to foreign markets
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.
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