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Real Estate Group Uses Cloud Software To Unleash New Business Opportunities

Oracle

Having spent most of its 40-plus years investing in land and doing entitlement and mapping work to prep its properties for construction, Murrieta, California, developer Rancon Group is now taking its business in two new directions.

It’s bringing into its properties the utilities, roads, and other infrastructure that make them more appealing to developers. Meantime, it’s beginning to develop and run income-producing businesses of its own, such as a winery resort with tasting rooms, restaurants, hotel, and events facilities, scheduled to break ground later this year in Southern California’s Temecula Valley. Among Rancon’s nearly 100 operating companies are a real estate brokerage, an escrow company, and a significant number of real estate investments.

Once impeding Rancon’s expansion strategy, however, was its legacy financial management system—a QuickBooks application and myriad Excel spreadsheets. “We outgrew QuickBooks long ago, but we just kind of made it work,” says Steven Van Houten, the company’s chief financial officer. “It’s not really meant for a business of our complexity.

Even before Van Houten joined Rancon several years ago, the company had looked to replace QuickBooks, taking a couple of on-premises financial applications for a spin. But they were too complicated—end users struggled with the changes. Furthermore, they were cumbersome to use, difficult to administer, and didn’t provide the tools and flexibility that the business required

'Natively Available’

When Van Houten arrived, he saw the potential to make it a more strategic project. Working with Rancon’s management team, he set three broad goals for a replacement system: It needed to be flexible and scalable enough to support whatever new businesses (such as resort management) the company would decide to pursue; it needed to support the company’s current move into infrastructure development (specifically with project management functionality that lets it analyze detailed cost components); and it needed to let company decision-makers access, share, analyze, and report data easily across its operating companies.

“The way the architecture of the previous system was set up, every company was locked in a silo,” he says. “There was really no easy way to report across our different companies.”

After evaluating cloud services from Oracle, Microsoft, NetSuite, SAP, and Intacct, Rancon selected Oracle Enterprise Resource Planning Cloud, which hit on all of the above needs and more, Van Houten says.

“We could see Oracle’s long-term commitment to the platform,” he says, including the financial and project management modules Rancon needed immediately, as well as inventory, supply chain, hospitality management, procurement, human capital management, business intelligence, and possibly even sales and marketing modules to support its future expansion.

“Out of all the cloud solutions that we looked at, Oracle’s product was the only one that really did what our real estate company needs in terms of project management and cost control,” Van Houten says. “The other companies were basically offering some type of an extravagant work-around or an add-on that we would have to use in order to accomplish our needs in that area—functionality that was natively available in the Oracle product.”

All of Rancon’s data is essentially in one database now, so that executives can derive granular insights. They can, for example, evaluate project performance, see investor activity by company, inquire about vendors and payments, or see how different operating units are performing.

Rancon now has instant and global access to its accounting data. For example, simple reporting of the company cash balances used to take up to two hours. “The way our previous solution was set up, I literally had to have somebody sit there, log in to one company, pull its cash balance, log out, log in to company number two, and so on,” Van Houten says. “Now with Oracle ERP Cloud, we utilize their SmartView technology to immediately update our analysis. This significantly improves our ability to keep our focus on what is important.”

Another Oracle ERP Cloud feature he loves is the ease with which his team can schedule the distribution of financial reports. “As soon as the month closes or the weekend arrives, the system just runs those reports and they show up in the individual’s inbox in the morning,” he says. “It has saved us a great deal of time from an accounting perspective, and we’re able to use that time elsewhere.”

Cloud Advantages

From the beginning, Rancon’s end users also liked that the interface of Oracle ERP Cloud is simple and easy to use. “It was something that everybody felt they could get used to,” Van Houten says. And senior management liked the fact that the cloud service could be up and running in about 90 days, a fraction of the time it would take to deploy an on-premises financial application.

Did Rancon have any concerns about moving its financials off premises into someone else’s data center? And because the company’s QuickBooks setup was so customized, did Rancon worry that a cloud solution wouldn’t fit its needs?

No on both fronts, Van Houten says.

As a midsize company, Rancon would rather spend its time and money on growing its core business than on managing and securing IT infrastructure. “What it really came down to is that Oracle is much better qualified at handling those things than we are,” he says.

As for customizing the cloud applications, Rancon knew it wouldn’t be able to rewrite the code on the backend, but “many different ways to do things” are built into Oracle ERP Cloud, Van Houten notes. “We were always able to figure out a way to have the system match our existing business processes. In several cases, we utilized new functionality available to us in the Oracle Cloud to improve our processes.”

For example, it used to be that when paper invoices came in, Rancon’s accounting department would forward them to the offices of the relevant operating companies for approvals, and then wait for them to be sent back for payment. Now those invoices go straight to Rancon’s central accounts payable group, which scans them into its Oracle ERP Cloud system, from which they’re routed electronically to the appropriate people for quick approval. It’s easier to track invoices, and the company’s vendors are sure to get paid on time.

“Oracle ERP Cloud really helped modernize our business,” Van Houten says, so that Rancon’s further diversification plans won’t hinge on the company’s ability to manage a new business on the back end.

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