Issue link: https://resources.tangoanalytics.com/i/1465847
STRATEGIC STORE LIFECYCLE MANAGEMENT SMARTER STRATEGIES. FASTER EXECUTION. I www.tangoanalytics.com I PAGE .5 Solutions are Costly Implementing traditional Lease Administration solutions is challenging. Common data issues and complex accounting rules result in ever-expanding timelines, and some implemen- tations take over a year to complete. Rather than trying to address this issue, most providers simply "solve" the problem by increasing the number of consulting and implementation hours required, which ends up dramatically increasing implementation costs. It is not uncommon for these costs to be more than two-times the cost of the original software license fees. Furthermore, several solutions today are on-premise, requiring customers to deploy technologies behind their own firewall or with a third party hosting provider, both of which drive up maintenance and support costs. Additionally, these on-premise solutions typically issue two releases per year and compel customers to upgrade in order to access new functionality, resulting in a higher total cost of owner- ship as upgrades require consulting services costing hundreds of thousands of dollars and months of work. The Changing Regulatory Environment We have established that lease information is an important part of an integrated real estate lifecycle. But the impact of lease information is not solely internal. In fact, a major external change is also compelling retailers to take lease information more seriously. Recently, The Financial Accounting Standards Board (FASB), voted on a lease standards act that has been over a decade in the making. By moving leases to the balance sheet, it is estimated that we will see an increase in aggregate reported debt by as much as $2 Trillion. As stated in a Wall Street Journal Article – "that change could dramatically boost the reported leverage for retailers, restaurant chains, airlines, package delivery companies and other companies that use leases heavily." The change will cast light on companies' lease obligations and increase transparency and comparability between companies - and as FASB Chairman Russell Golden stated, "We believe that this new standard is important because it will provide investors, lenders and other users of financial statements a more accurate picture of the long-term finan- cial obligations of the companies to which they provide capital."