More Firms Rely on AI to Drive Facilities Strategies

DALLAS—Tango, provider of lifecycle management and integrated workplace management system solutions, recently unveiled a new lease administration and accounting solution created specifically to meet the needs of mid-market organizations. Tango helps these organizations oversee day-to-day operational requirements and ensure compliance with new lease accounting standards (FASB ASC 842 and IFRS 16) by automating and streamlining accounting for real estate property, equipment and embedded leases, calculating ROU asset and lease liability, and accurately reporting from a single solution.

“Considering that real estate represents a top two expense line item for most mid-market companies, it’s essential they gain the visibility and insights to help them identify savings opportunities within their lease administration and accounting processes, as well as ensure compliance with new FASB regulations,” said Pranav Tyagi, Tango CEO. “Until now, the mid-market was forced to choose between less robust lease administration and accounting solutions that didn’t fully meet their needs or rely on time-intensive and expensive manual approaches.”

Tango helps mid-market companies make data-driven decisions about lease administration and accounting while keeping operating expenditures low. Tango’s lease administration and lease accounting mid-market software solution allows the ability to administer leases with ease from abstraction through management of options, terms, clauses, co-tenancy and all key items, manage occupancy costs by automating complex calculations, reconciliations and billings; achieve FASB ASC 842 and IFRS 16 lease compliance; leverage data insights to identify issues; and prioritize lease management activities for all sizes of portfolios. The interface provides actionable insights into all lease-related items and users receive immediate alerts to items that require attention.

“2020 will be the year for organizations to finally reconfigure their workspaces to meet the growing demands of today’s remote workforce,” Tyagi tells GlobeSt.com. “As we continue to see drastic changes in today’s mobile workforce, more organizations will be forced to make adjustments to both their work policies and office space to attract and retain employees, while keeping overhead costs down.”

Tyagi says there has been a shift in the workforce in the last 15 years and this isn’t slowing down. More than 26 million Americans or about 16% of the total workforce are now working remotely at least part of the time, according to the US Bureau of Labor Statistics.

“To remain competitive in today’s next-gen workforce, organizations need to give their employees flex time and other office space perks, i.e, communal space; meeting rooms, study rooms or a game room,  as recent grads have come to expect this. Studies show this increases motivation and employee morale,” Tyagi tells GlobeSt.com.

Many organizations overestimate how much space they need and spend millions on space that goes unused, he says. Through integrated workplace management systems solutions, organizations can balance employee requirements while protecting bottom lines by ensuring optimal space utilization and reducing high overhead costs. Moreover, many organizations will rely on AI and predictive analytics to drive corporate real estate and facilities strategies.

“To keep up with market demands, enterprises will look to technology solutions that help align their physical footprint with both company strategy and employee needs, all while driving down costs,” Tyagi tells GlobeSt.com. “Through evolutionary modeling based on numerous and varied data inputs, modern integrated workplace management system solutions that incorporate AI and predictive analytics help businesses determine department needs and accessibility for efficient planning. With the issue of new lease accounting standards, mid-market organizations will look to tap more robust automated solutions for efficient and reliable reporting and ensure compliance.”

Although the FASB ASC 842 lease accounting standard deadline for private companies has been extended to January 2021, these companies would be wise to start implementing the right automated software solution now, to manage and streamline accounting for real estate property, equipment and embedded leases, and calculate ROU asset and lease liability for accurate reporting, he says.

“It’s essential that mid-market companies gain the visibility and insights they need to help them identify savings opportunities with their lease administration and accounting processes, and ensure compliance before extra costs creep up from errors that could occur and will require additional adjustments, etc., as the deadline draws near,” Tyagi tells GlobeSt.com. “Over the last year, many public companies found some type of Band Aid solution to help them meet the new FASB ASC 842 lease accounting compliance deadline, but now have to take their medicine and figure out a long-term sustainable approach. Although companies may feel like they meet compliance, it’s important for them to ensure current and future lease transactions align to their long-term strategy.”

For example, meeting compliance requires moving all leases to the company’s balance sheet, resulting in an initial reduction in earnings and will increase EBITDA. Investors need to be aware of these implications as this transition will have far-reaching impacts including stock performance. And, companies need to know the specific impact to educate all parties and determine their best path for implementation, Tyagi cautions.

Finally, nearly 40% of economists surveyed expect a recession next year and 72% expect one by the end of 2021, says the National Association for Business Economics.

“With an economic recession on the horizon, organizations will be scrambling to cut costs yet having an integrated workplace management system that manages lease administration and accounting, and helps assess market trends, fluctuating rents, etc., can be the lifebuoy they need to survive,” Tyagi tells GlobeSt.com.