PeopleCube recently issued a report indicating several predictions of 2009 business trends. The company identified the increased use of alternative workspace, more sophisticated analytics and reporting, the convergence of corporate real estate and facilities management functions, and the continued strength of the software-as-a-service (SaaS) delivery model as cost-saving trends that will be manifested throughout the corporate world, and beyond, in the coming year.
Creating and Leveraging Flexible Work Places
Organizations are implementing alternative workspace because it presents a number of cost-reduction and efficiency-inducing benefits. A common form of alternative workspace is office hoteling, whereby mobile workers can book temporary office space on an as-needed basis, eliminating the need for dedicated workspaces for employees who are only sometimes in the office.
Implementing alternative workspace enables organizations to reduce real-estate overhead while improving the utilization of shared workspace. Further, managing alternative workspace more efficiently can lessen energy consumption and related costs. This supports organizations’ green initiatives, while simultaneously promoting telecommuting, supporting a mobile workforce, and increasing employee satisfaction by offering a flexible work environment—all of which can lead to improved talent acquisition and retention.
“Particularly in tough economic times, companies are seeking innovative ways to cut costs while maintaining productivity,” said John T. Anderson, president and CEO of PeopleCube. “Better management of an organization’s workspace improves the bottom line by reducing overall costs, but it also pays off in terms of employee satisfaction by fostering flexible work environments. That, in turn, helps with recruitment and retention.”
Analytics & Reporting—Making the Most of Your Data
Real estate is typically a company’s second largest expense after labor; thus, maximizing the utilization of space enhances an organization’s financial investment. As a result, organizations are looking to leverage a variety of reporting tools to ensure they are getting the highest value out of their real estate investment.
“As real estate costs continue to rise, it is essential that organizations look for ways to maximize the space and assets they already have,” said PeopleCube’s Anderson. “Oftentimes, the data is already there; it’s just a matter of using it the right way. Companies need to take a closer look at the information they have on space utilization to ensure that they are truly getting the most value out of these assets—particularly when considering expansion at existing or new locations.”
Detailed reporting capabilities provide critical information to help management make educated decisions for controlling costs. For example, a company might review its flexible work program at one location to analyze how shared workspace is being utilized. This allows the company to measure the value of this type of work arrangement from a productivity standpoint as well as an economic one.
Integrated Workplace Management Expansion
Another trend stemming from the need for increased efficiency is the convergence of facilities management and corporate real estate management. This shift is, in part, due to the increasing value of real estate portfolios, a renewed focus on realigning the workforce, and an emphasis on sustainable practices. As a result, many organizations are turning to integrated workspace management systems (IWMS) as a way to streamline collaboration among disparate divisions and to defray growing operational costs while still maximizing productivity.
According to a recent survey conducted by integrated workplace management systems provider Tririga, nearly 71 percent of participants indicate that the “real estate and facilities management function has grown in stature and importance within the C-Suite” and, as a result, the IWMS market has grown 10 to 15 percent on average per year over the past five years.
“Integrated workplace management systems are enabling companies to increase efficiency without sacrificing performance,” said Anderson. “By consolidating the facilities management and real estate divisions and the systems they use to manage their respective areas, organizations are able to maximize operational effectiveness while reducing their overall operating costs both in the short and long-term.”
On Demand Remains In Demand
On-demand software—also known as software-as-a-service (SaaS) and subscription software—has become the delivery method of choice for software applications, and PeopleCube only sees that continuing in 2009. This approach accelerates a customer’s adoption of the application, which helps provide a quick return on investment. It offers a very affordable total cost of ownership, as well as the ability to increase—or decrease—usage as needs change.
Customers also benefit from SaaS applications because no capital expense or software purchase is required; rather, they are charged a monthly service fee and perhaps a small setup fee. This lowers the risks inherent in new software acquisition and keeps software costs predictable. It costs nothing to keep the software up-to-date, and there are no hidden costs such as hardware, annual maintenance fees, or internal support personnel. Furthermore, SaaS applications place little or no burden on the customer’s IT department, eliminating the need to increase headcount, as is often required when managing new software packages.
From a software company’s perspective, SaaS increases a vendor’s ability to penetrate the marketplace. “The characteristics of SaaS made it possible for PeopleCube to adopt the popular delivery model by leveraging our existing technology—there was no need to develop an entirely new product,” said Anderson. “SaaS reduces our support costs, since it gives us better control over what versions of our software companies are using, and it offers us greater flexibility to add new product capabilities that customers request. This not only reduces support requirements, but enhances development and quality-assurance efforts over the life of the product.”
The benefits of SaaS to both customers and vendors is so compelling that PeopleCube believes the SaaS trend will only grow in force throughout 2009. And research firm Gartner agrees, with a recent report claiming that 90 percent of enterprise companies are expected to maintain or increase their investments in SaaS in 2009. Vendors are now in the process of adjusting to the change in revenue stream from one large upfront payment to an ongoing stream of much smaller payments over the long term. Once the transition is complete, the SaaS model helps vendors by ensuring a steady stream of cash throughout the year, rather than the vendor relying on big cash infusions at quarter- or year-end.
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