Tuesday, July 28, 2015

"Insights and Strategy, Please" — Overheard in the C-Suite by guest blogger Maureen Ehrenberg

Corporate real estate leaders are taking a cue from IT and turning to insight-driven partnerships over tactical delegation


Keep the lights on in Toledo. Secure 20,000 square feet of space in LA. In the 1990s, corporate real estate (CRE) outsourcing strategy was primarily tactical, giving direction to whichever on-the-ground service provider was most fit for the job. Tactical service delivery just isn’t in demand today. Strategic, data-driven insights, advice and results are replacing tactics, and partnerships are replacing vendor relationships.

Introducing Outsourcing 4.0: We're in this together.

With a trusted CRE supplier serving and acting as strategic partner, corporate leaders are finding they can more readily develop a centralized system to supercharge every corner of the workplace, and real estate portfolio – and their people. They can harness cutting-edge technology, tap actionable predictive analytics, and optimize performance. They can even free up internal teams to focus on higher level work, such as enriching connections with HR, Procurement and IT for a more aligned workforce.

This new model might have a familiar ring to it.

These fresh CRE strategic outsourcing strategies are similar to progressive IT outsourcing that has transformed the role and impact of technology services across a corporation’s operations.

Likewise, new CRE outsourcing brings together quantitative and qualitative approaches, and incorporates close dialogue with other business units. CRE partners serve as managing consultants that impact much more than the physical space of corporate operations; they make the entire workforce stronger. By acting globally and integrating locally, portfolio strategy and facilities management are streamlined with central decision-making, while shaped for the specific needs of each location.  

Three signs C-suites are poised for outsourcing strategy revolution

"But that's the way we've always done it," is no longer effective in terms of outsourcing strategy and business results. Following are a few key indicators that corporate leaders are ready for change:

1.       Making companies “thin.” Corporations are increasingly adopting a “thin client” model in which one or two supplier partners serve all CRE needs, including infrastructure, personnel and the supporting software services. Centralized CRE outsourcing means more streamlined operations, focused inter-company decision-making and user-friendly client interfaces. Companies increasingly expect supplier partners to integrate across corporate sectors and innovate by using advanced data and analytics to pose creative ideas, solutions and innovate
2.       Expanding the definition of “real estate” to “workplace.” Corporations expect today’s outsourced partners to be holistic workplace experts, helping to create the employee experience and transforming the built environment this is much broader than traditional property matters. In top companies, the expanded purview of the CRE outsourced provider includes the delivery of the workplace environment and how the worker is enabled to operate within it. Collaborating with HR, IT and other shared services business teams, real estate professionals are now directly influencing worker productivity, employee well-being, recruitment and retention. In addition to physical space, CRE partners are involved in supporting “relationship management” at every level of a company’s operations.
3.       Prioritizing outcomes over metrics. While key performance indicators (KPIs) and service-level agreements (SLAs) continue to matter, the expansion of outsourced CRE roles has emphasized the importance of overall outcomes and standards. Employee satisfaction and productivity are, for example, a strategic imperative. And CRE suppliers are being engaged to a greater extent in support of corporate goals through new types of contracts. These contracts align them with the risks and rewards of company business outcomes related to the transformation of the portfolio and the delivery and management of the built environment together with their CRE partners within the corporation.

The desire to improve global positioning is no passing interest, either. An overwhelming 73 percent of CRE leaders say their mandate to centralize real estate functions on a global basis is stronger than it was just three years ago, according to JLL’s 2015 Global Corporate Real Estate Survey. Deep alignment is more necessary than ever.

Today's leading companies are seeking the kind of collaborative synergy that leads to improved innovation, productivity, profitability and employee engagement across even the most far-flung locations. Is it time for a new model? The answer is a resounding yes, and doing so will enhance every corner of the workplace: physical, psychological and digital. 
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By Maureen Ehrenberg, International Director, JLL Integrated Facility Management

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