IT Governance Business Case
Streamlining the Real Estate
Portfolio Management & Acquisition Process
General Services
Background
The Durham General Services Department Real Estate Division is responsible for the City of Durham's services relative to real estate sales, acquisition, and property management, as well as preparing feasibility studies, comparative market analysis, and management of the City Tract database. The services provided by the General Services Real Estate Division include, but aren't limited to:
• General Acquisition of Properties
• Property Management
• Disposition of surplus City-owned real property
• Fire stations and Police substations
The Real Estate Division is currently managing the 1134 properties owned by the City of Durham, and managing 60 leases, 50 of which are active. The acquisition and sales, as well as the property management processes can be complex and nuanced necessitating a need for a tool to adequately track and manage these processes.
Current Business Problem
Currently, the General Services Real Estate Division does not have an adequate tool to help track and manage their processes relative to acquisition and sales, as well as property management. They are currently utilizing Microsoft Excel and SharePoint for tracking their sales and acquisition operations, and a SaaS Archibus for their lease and portfolio management.
The lack of adequate management tools results in behind schedule tasks, especially considering turnover and staffing shortages, inefficient manual processes, and lack of real-time visibility into project status for management and reporting.
Current Pain Points
• Antiquated technology for current business needs: The property management capabilities of Archibus are antiquated and not updated and customer support is extremely poor with Account Managers being extremely difficult to contact. Additionally, Archibus has experienced outages impacting data availability. Acquisition and sales processes using the combination of SharePoint, Excel, and Outlook is inefficient and decentralized
• Decentralized Communication: The current acquisition, sales, and property management communications are handled via email resulting in decentralized communication threads and sometimes lost communication threads in the event of division turnover. There needs to be a central communication log for reporting, transparency, and historical reference
• Decentralized Documentation: Documentation for acquisitions and sales are currently being housed in SharePoint, with calculations and project management tasks being conducted in Excel. This is extremely inefficient and can easily cause problems with version control, loss or misplacement of documents due to human error
• Lack of reporting: With the current process, there is no real-time dashboard or reporting capability for acquisition or sales progress. Excel documents must be consistently updated, cross-referenced to activities to have idea of real-time status of projects. Centralized workflows, documentation, and communication would allow for reporting capabilities
• Manual Processes: Many of the processes are manual and time consuming to include using mail merge to form letters and notifications, updating Excel spreadsheets with process updates, searching SharePoint for case documents, and the overall workflow required for acquisition, sales, and property management processes.
The combination of the above listed pain points has contributed to being very behind in acquisitions with 100s of cases sitting in queue
Future State Benefits
• Capable technology for Real Estate Division processes
• Centralized location for process documentation and communication
• Built-in workflows based on Real Estate Division workflows and dependencies
• Database for document and lease storage
• Automated event notifications (payments needed, lease expiration)
• Automated document creation based on relevant processes
• Real-time reporting
Desired Business Value
City of Durham's Strategic Plan Goal:
Innovative & High Performing Organization
TS Objective 3: Maintain and modernize all the City's assets to align to the evolving and emerging technologies in the marketplace for City's business units
Analysis and Recommended Solution
Option 1: Cityworks PLL (Permits, Licensing and Land)
• The City of Durham has been using Cityworks Asset Management System for a long-time and has extensive relationship with the vendor.
• Cityworks PLL is customizable to the needs of the Real Estate Division, which has been fully demonstrated
• Security and integration not an issue as Cityworks is already in production on-premise
• The City of Charlotte leverages Cityworks PLL for their real estate acquisition and management needs as well and reports positive ROI
Option 2: CoStar Real Estate Manager
• CoStar Group is a publicly-traded company providing information, analytics, and online marketplace services to the real estate industry, with a market cap of $34 Billion
• Headquartered in Washington, D.C.
• Provides multiple solutions to include Real Estate Manager for lease administration, portfolio management, and lease accounting
• Solution is designed for real estate management, mostly geared towards property and lease management
• Integrates with Oracle Fusion ERP
Comparative Business Value Analysis
Decentralized Communication Alleviates Pain Point Alleviates Pain Point
Decentralized Documentation Alleviates Pain Point Alleviates Pain Point
Extensive Manual Processes Alleviates Pain Point Alleviates Pain Point
Lack of reporting and analytics Alleviates Pain Point Alleviates Pain Point
Pain Point Cityworks PLL CoStar Real Estate Manager
Capability Cityworks PLL CoStar Real Estate Manager Acquisitions & Sales Workflow Capable Capable Portfolio Management Capable Capable Lease Management Capable Capable
Comparative Technical Analysis
Cityworks PLL CoStar Real Estate Manager Number of End Users License cost per user Unlimited Start-up-costs $188,460.00 implementation/data migration $17,500.00 annual license/run cost Total year 1: $205,960.00
implementation/data migration $78,000 annual license/run cost
year 1: $201,620.00 Recurring Cost of Ownership $17,500.00 / annually $78,000,00 annually w/ add-on pricing for growth License Structure Costs per end-user accounts Costs based on # of projects, transactions, & owned locations Hosting On premise SaaS web-based Security Meets City of Durham Cyber Security Standards Meets City of Durham Cyber Security Standards Real Estate Market Data N/A Embedded commercial real estate market and submarket analytics Accounting Capability Future state integration capability with Oracle PPM and Oracle Fusion Cloud via API Built-in real-estate specific accounting functionality & can integrate with Oracle ERP
$123,620.00
Total
Recommended Solution:
Cityworks Permits, Licensing, and Land
Description
Cityworks PLL is a leading GIS-centric solution designed to simplify applications for customers and streamline workflows for staff, helping local government track the full life-cycle of public assets and achieve greater interdepartmental collaboration
Pros
• Leveraging existing technology and vendor relationship
• Capable technology for Real Estate Division processes
• Centralized location for process documentation and communication
• Built-in workflows based on Real Estate Division workflows and dependencies
• Database for document and lease storage
• Automated event notifications (payments needed, lease expiration)
• Automated document creation based on relevant process
• Real-time reporting
Cons
• High opportunity cost for implementation and training
Security Review
The recommended solution meets the cyber security standards for the City of Durham.
Architecture Review
The recommended solution meets the architectural standards for the City of Durham.
Recommended Solution - Project Financial Estimate
COST ESTIMATES FUNDING Description Implementation Costs (Hours) Post Implementation Run Costs (Hours)/ KTLO Departmental Funding Amount: $ 12,940.00 Labor $ (Hours) Internal TS Department: 96 hours 10 Hours Funding Requested (Y/N): Y Business Analysis 15 Hours 0 hours Internal Labor New FTE – Year 1 Costs $0.00 IT Support & Cyber Security Analysis 5 hours 0 hours Project One Time Costs (External) $205,960.00 Data Center Services 16 hours 5 hours *Total Project Funding Requested for Year 1 $205,960.00 Enterprise Application Support Services 18 hours 10 hours PMO Implementation 60 hours 0 hours Asset Run Cost $17,500.00 Less re-allocated funding from Archibus ($12,940.00) General Services Real Estate Division 240 hours 40-50 hours Asset Run Costs Requested for Recurring Years $4,560.00 External Labor $: $0.00 Professional Services: Professional Services $188,460.00 Non-Labor $ Software Licensing: $17,500.00 $17,500.00 Hardware: $0.00 $0.00 * Total Project Funding Requested Year 1 includes New FTE Labor, External Labor and Non Labor
Risk Identification
Description of Risk Risk Impact (High/Medium/Low) Mitigated (Y/N) Contingency(Y/N) Vendor performance Low N N Cyber Security Low N N Project Team Turnover Low N N Poor Execution Low N N
Mitigation Risk (Costs)
• N/A
Contingency Risk (Costs)
• N/A
Our ask
We are asking the IT Governance Steering Committee to approve the business case for the General Services Real Estate Division to procure and implement Cityworks PLL for their real estate management and acquisition needs.