1. Managing real estate isn't a high priority in many executive suites. In fact, some
business managers concede they don't know precisely how much office or factory space
they have leased -- or how much they are paying for it. But an outfit known as FIS aims
to fix that.
Unlike other operating costs, real estate "has been assumed as a fixed cost that is neither
manageable nor controllable," explains Charles P. Woznick, president and chief
executive of Facility Information Systems (www.fisinc.com ). But with the right tools, he
says, companies can track their real estate accurately and potentially save millions of
dollars by using space more efficiently.
Using software that links computer-aided design drawings to databases built with
Oracle Corp. tools, FIS helps companies track often sprawling empires of office space,
much in the same way they currently track inventory and sales. "If you talk to somebody
who manufactures automobiles, they can tell you what each of 40,000 parts costs down
to the penny, and how many they will need to make cars this year," says Mr. Woznick. His
challenge is to convince business managers to use the same kind of detailed data-
management approach for real estate. One selling point: In a downturn, the data-
management system can help managers to quickly figure out which space to let go and
where to consolidate workers.
Though FIS, based in Camarillo, Calif., has been around since 1993, it has only recently
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UNDER THE RADAR
FIS Helps Managers Save Costs By Tracking Office
Real Estate
Updated April 19, 2001 11:48 a.m. ET
By MOTOKO RICH Staff Reporter of The Wall Street Journal
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2. started to gain visibility among corporate real-estate managers, who have been slow to
adopt new technology. According to the company, it turned a profit for the first time last
year, on sales of about $6 million.
Mr. Woznick, the 49-year-old former co-founder of an orthopedic implant business, first
heard of using technology to better manage real estate when his wife, an architectural
designer, showed him a business plan for a computer-aided design company in the late
1980s. At the time, Mr. Woznick was busy with his own firm, but after he sold his implant
business, investors in the computer-aided design venture approached him about the
possibility of his taking it over, as that company was about to go out of business.
Mr. Woznick, who had mainly been responsible for computerized finance and
production control at his other start-up, decided he could use the assets of the failed
design company to build a business that helped companies introduce cost control to real
estate.
With a few remaining customers, some of the original investors transferred the assets of
Computer Aided Design Group into the newly formed FIS. In 1995, he raised $810,000 in
a round led by Indosuez Ventures of Menlo Park, Calif., and subsequently raised a
further $5.7 million from Indosuez and other investors, quietly signing up major
customers, including Cisco Systems Inc., Intel Corp. , the University of Chicago and
Washington Mutual Inc.
Late last year, the company announced that Autodesk Ventures, the strategic
investment arm of design-software giant Autodesk Inc. of San Rafael, Calif., had taken
an undisclosed minority stake.
With FIS's systems, real-estate managers can figure out precisely how much vacant
space a company might have on its books. Using that information, companies can
determine whether they can move workers into existing space, or need to lease a whole
new office suite. The software also helps companies connect detailed building drawings
with information about workers, so that an employee in a company's head office can
figure out in which cubicle a co-worker in, say, the London office sits.
Cisco, for example, uses FIS to map about half its 12 million square feet of office space.
David Clute, manager of e-solutions in Cisco's corporate real-estate division, says the
company has used FIS since 1997 to model different space-layout scenarios for new
offices or to reconfigure existing office space to better accommodate moving workers.
Historically, Mr. Clute says, Cisco workers have moved offices about 1.5 times a year.
Right now, Cisco is using FIS to manage its space as the company implements a plan to
lay off 8,500 workers.
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3. Westwood, Kan., telecommunications company Sprint Corp., which seats about 85,000
employees across 23 million square feet of office space, is also a customer. With FIS, says
Paul Savastano, director of information technology within Sprint's real-estate group,
"you can say I have this many workstations nationwide, how many are vacant, and where
they are." With such information instantly at his fingertips, says Mr. Savastano, he is
much better able to help managers expand divisions without necessarily having to go
out and lease a whole new building. "If I can find 100 workstations in the appropriate
city or combination of buildings, I can save the company several million dollars over the
term of a new lease," he says.
Before he had such software, says Sprint's Mr. Savastano, "it was a nightmare" trying to
persuade management to better utilize existing space. For most senior managers, he
says, "real estate is kind of an afterthought."
Despite burgeoning interest from corporate tenants, FIS's growth is still modest. "I
think it's fair to say that this has taken far longer than we had anticipated," says David E.
Gold, general partner at investor Indosuez Ventures. But at least FIS, unlike many failed
real estate-related dot-coms, "has a real product, real customers and real revenue."
Write to Motoko Rich at motoko.rich@wsj.com
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