New tool to help CFOs manage leased property more sustainably

New tool to help CFOs manage leased property more sustainably

Getting CFO buy-in is key to the success of any corporate sustainability strategy, but it's often difficult to illustrate, in dollars and cents, how a green initiative can improve the bottom line.

The latest version of IBM Tririga software, one of the company's Smarter Buildings analytics offerings, could help. The program enables chief financial officers and real estate execs to more easily see how well a company is managing its leased property and how certain changes -- like improvements for energy efficiency and better use of space -- can buoy the bottom line.

The updated IBM Tririga software was developed primarily to make it easier for CFOs and corporate real estate execs to contend with anticipated financial regulations that will require leased assets -- including buildings, vehicles and other equipment -- to be added to the balance sheet as capital assets. Operating leases currently don't appear on balance sheets because they are considered operating expenses.

The new rules could make financial performance -- as expressed in debt-to-equity ratios and returns on assets  -- appear worse for Standard & Poor's 500 companies, weighing down firms with an average of more than $1 billion in assets, John Clark, the director of Tririga at IBM, told me. The U.S. Securities and Exchange Commission estimates the impact of the pending regulations could approach $1.25 trillion dollars for publicly traded companies in the United States, he noted.

That makes it even more essential for the men and women who track corporate dollars and real estate to know how leased assets are performing and what can be done to make them operate more efficiently.

According to Clark, that's where the IBM Tririga software comes in. "This is an arrow in the bow for real estate and sustainability executives to help them achieve their goals," he said.

The software enables users to view their company's entire asset portfolio, identify underperforming facilities and put together plans to optimize assets and reduce environmental impacts, which can also drag down financial performance.

"It's a double win," Clark said of the updated solution that IBM unveiled Friday as the company readied for its annual IBM Pulse conference in Las Vegas, which opened yesterday. "This really ushers in the age of asset of efficiency."

IBM acquired Tririga, known for its real estate and facility management software, last year as part of a drive to expand the IT giant's Smarter Buildings initiative. The two embarked on the latest edition of their IBM Tririga software with an eye to helping companies deal with new rules expected from the U.S. Financial Accounting Standards Board and International Accounting Standards Board this year. A survey for IBM of senior executives at global firms with revenue topping $1 billion showed that 92 percent said they aren't prepared for the changes.

Tapping China's Market for Refurbished IT Equipment

In other news in the runup to IBM Pulse 2012, the company opened its first server remanufacturing center in Shenzen, China, where the market for used IT equipment is expected to reach $25 billion by 2014, according research by IDC.

The facility will first to focus on remanufacturing hundreds of mid-range IBM Power Systems, the company said. By 2014, the site is expected to ramp up its capacity and remanufacture about 100,000 PCs and low-end to mid-range servers by IBM and other makers each year.

By that time, about two-thirds of the demand for refurbished equipment will be for low- to high-end servers and personal computers, IDC found.

IBM's new center in Shenzen is part of the company's Global Asset Recovery Services operation, which includes remanufacturing and refurbishment facilities in Australia, SIngapore, Japan, Brazil, Canada, France, Germany and the U.S.

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