When you begin evaluating workplace management solutions, you’ll quickly discover there is a wide range of pricing. Not to mention very different pricing models. That’s partly because systems vary in sophistication and the capabilities they offer. How can you compare apples to oranges and figure out which solution will provide the most value for your organization?
Here’s a primer that will help you hone in on the most cost-effective workplace management solutions for your needs, take Total Cost of Ownership into account, and calculate the return on investment & value you can expect to gain.
Narrowing the scope for workplace management solutions
Chances are, your search for workplace management software is driven primarily by a need to manage your CRE expenses. When you follow the money trail, there are two key variables: your supply of space, and the demand for space.
Any leasing tool can do a decent job of managing the supply side of the equation, including how much space you have, cost per square foot, etc.
On the other hand, demand management is where a great workplace management system comes into its own. Best-in-class systems provide the means to help you understand the following:
- How well occupied is your space?
- Can you improve space usage or grow within your existing space?
- Can you reduce your footprint/total cost of ownership?
- What is the current demand for space?
- What will the space demand be in the future?
- How well is your real estate working for your business units?
- How well do you understand your business unit’s strategy and how real estate can enable it?
- How can real estate work better for your business?
- How can a workplace management tool help you to drive strategic conversations with your business?
Effectively managing workplace demand and real estate strategy is a task that is rarely outsourced and belongs within an organizations four walls. It is also the area that delivers the most strategic value.
If your primary goal is to reduce CRE spend, you’ll get the most bang for your buck with a workplace management solution focused on modern space planning.
Here’s where to concentrate your efforts to get the most value:
Managing occupancy & optimizing your use of space, so you can avoid leasing unnecessary space. Most companies are wasting 50 to 60 percent of their office space. Here’s an eye-opening exercise: take a walk around one floor of your building and count how many empty desks you see. At $10,000 per desk each year, wasted space costs you a fortune. Look for a tool that makes it easy to identify and re-allocate pockets of under-utilized space. Taking back just 100 vacant desks adds up to a $1,000,000 per year in cost savings.
Getting useful & reliable analytics about how your space is used, so you can make better decisions about your future portfolio. This requires accurate data as well as the ability to slice and dice it as needed to produce the business intelligence you need to guide decisions. Look for modern workplace management solutions with useful tools for keeping data accurate & up to date, and the ability to customize reports to your requirements.
Moving to agile, collaborative workspaces is an idea that’s catching on, and with good reason. The shared workplace model is uber-efficient and has the potential to yield in the tens or even hundreds of millions in savings. Agile workspaces also enable the collaborative cultures that companies need today to remain competitive. If your company has plans to move in this direction (and what progressive corporation is not at least looking into it?) don’t ignore support for agile environments in your evaluation of workplace management solutions.
And if you’ve already got a legacy IWMS in place, modern workplace management solutions can be integrated with existing systems to enhance functionality.
The result? In a surprisingly short period of time, you can take control of your CRE portfolio and reap huge financial paybacks.
Related article: How to Turbocharge IWMS With Facilities Space Management Tools
How pricing models differ
Now that you understand the capabilities that drive value, how do you compare the variety of pricing models for workplace management solutions? Fundamentally, space management systems are priced based on one of the following:
Number of users. The most important priority for workplace management solutions is gathering accurate data and keeping it that way. To that end, it’s in your best interest to have more users entering and validating information in your system. In an ideal world (and simple to achieve with the right tool), you want your business units to participate. Unfortunately, that becomes prohibitive when you have to pay for seat licenses for each business unit representative.
Volume of space managed. It’s one thing to pay for managing the space that actually needs managing: your employees’ work spaces. Workplace management software provides value for that space by tracking who is using it. It’s quite another to pay for managing large, empty spaces such as common areas and meeting spaces. After all, space management tools are not providing any value for these spaces. With this model, you end up overpaying since your total square footage counts toward the price.
Workpoints. When your workplace management software is priced based on workpoints, you’re actually getting what you pay for, since the tool is providing value for every desk in every building. What’s more, as the tool helps you optimize space and reduce unneeded workpoints, you have the opportunity to reduce the cost of the tool.
Other costs you must factor into the equation
It’s important to realize that the cost of implementing workplace management software can reach far beyond the price of the product alone. When calculating costs, don’t forget to include:
Professional services and implementation. Many vendors employ (or outsource) professional services people to help you through a complicated install and data collection process. How much extra will you pay for these services?
Data management. If a tool is difficult and cumbersome to use, you may end up paying consultants to enter and validate your data. This can be an ongoing expense that you’ll have to live with for a long time.
Report design. No two companies are the same, so everyone needs custom reports. How much extra will this cost? Don’t forget you’ll need different reports as your business changes. So this expense can multiply.
Customizations. Again, you’re not a cookie-cutter corporation, so you’ll need software customizations to align the product with your needs. How much more will this cost? And what happens when your requirements change?
Upgrades. How often will you get software updates and what’s the cost each time?
Soft costs to consider
Beyond the hard dollars involved in purchasing workplace management solutions, there are also “soft costs” that you’ll want to factor into the equation:
Service and support. How about the cost of your stress level and your workload? Which vendor is going to make your job easier, and even more pleasant? Are they committed to helping you work through issues and reach your goals?
Your reputation and career. No pressure, but this decision has the potential to fast-forward your career trajectory, or not. Which product will make you look like a star to your business units and your superiors?
Your ability to influence and drive business change. Will the workplace management software provide the tools and ammunition you need to drive strategic workplace changes and business goals? Can it help you build relationships with lines of business so they support your initiatives?
Comparing time to value
One of the most overlooked factors in evaluating workplace management solutions is how long it will take to realize the benefits.
If you have been involved in implementing an IWMS system in the past, you know that it’s likely to take years for the system to be fully operational. And return on investment? Who knows if that will happen at all.
Today’s modern workplace management software is different. Cloud-based and built on modern technology foundations, systems can be implemented in a matter of months. It won’t be long before you’re taking back unused space, right-sizing your portfolio, and making strategic decisions that save millions. You may even be ready to make the move to agile working for the biggest cost savings of all.
Don’t forget to factor in the cost of lost opportunity. While you’re waiting years for that new system, how many unneeded leases did you sign? How much are you continuing to pay for wasted space?
You’ll hear a great many claims from workplace management solutions vendors about how their system will save you loads of money. How many of them can back up their claims?
Get references. Speak to at least one current client (ideally one that’s similar to your company in size and/or CRE goals) to learn how they have used the tool to cut CRE expenses. Find out the scope of the results to date, and how long it has taken to achieve ROI. At the same time, it’s a great idea to ask how the vendor has provided assistance along the way and helped to overcome any hurdles.
Find out how to calculate hard savings. Ask each workplace management solutions vendor you’re evaluating about how they calculate the potential cost savings they promise. They should be able to provide guidance at a minimum, if not actual tools to calculate ROI.
Serraview has an interactive value calculator that helps potential clients estimate the actual cost return they can expect. Feel free to reach out to us and we can guide you through it.