This document provides a summary of a presentation on future trends in corporate real estate outsourcing. The presentation discusses how the corporate real estate leader's role will evolve to be more strategic and add value across the organization by 2020. It outlines key components of corporate real estate for 2020, including optimizing costs and employee productivity, measuring impacts on productivity, and partnering with other functions. The document also summarizes trends in outsourcing models, what companies want from outsourcing, reasons outsourcing fails, and latest trends like new success models and an "integrator model" used by Microsoft. Profiles of panelists from Cisco, Microsoft and CBRE are also provided.
2. DICK PALOMBA
Founder/President - Corporate Planning Consultants, Inc.
Dick brings 30+ years experience & thought leadership to CRE clients in
the areas of: strategy development, operational assessments, sourcing,
RFP development, process improvement and organizational redesign.
CPC founded in 1984 has serviced more than 60 international
corporations including: Google, Oracle, JDSU, Microsoft, PG&E, URS,
Charles Schwab and Juniper Networks.
CORPORATE EXPERIENCE: Formerly VP/Director of CRE with Levi
Strauss & Co., Informix Software, Sybase & COLO.COM.
Co-founded a full-service, turn-key international real estate services
company, AsiaPac International, in 2001.
EDUCATION: BA and MEd from U Mass at Amherst and Ed D work at
University of San Francisco.
Dick is an active member of Nor Cal IDRC/CoreNet since 1990.
Served as leader of Programs Committee - 2011 to 2012.
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3. Program Take Aways for Professional Growth
Leave Today Understanding:
Evolution of Outsourcing
Keys to a Successful Relationship
Current Trends/Models
What Role will it Play in your Career in
the Future? ? ?
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4. The Future of Corporate Real Estate in 2020
“By 2020, the corporate real estate (CRE) leader
will evolve from a subject matter specialist to a
strategic partner with a broad knowledge of
business strategies. He or she will display a
mastery of the core functions of the CRE role while
demonstrating an ability to add value to the
enterprise by identifying potential synergies and
efficiencies across the organization.
Excerpt from “The Leader” magazine – CoreNet Global publication, September 2012.
(Recognized as the leading source of research and thought leadership by CRE
organizations globally.)
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5. Core Components of Corporate Real Estate in
2020
1. Optimizing costs while driving employee productivity - design collaborative,
flexible workspaces that are adapted to the specific needs of the work force and
reinforce the organization’s culture and values.
2. Measure impact of enhancements on workplace productivity
initiatives with overall corporate strategies.
align design
3. Outsourcing and Service delivery models engrained in CRE repertoire - to
leverage increasingly strategic and collaborative relationships with supply-side
service providers to champion initiatives.
4. External service provider alignment and integration becomes more
important and necessary - internal resources are increasingly refocused on
strategic roles.
5. Partnering with key support functions (IT/HR/Sourcing) is central - for adoption
of emerging technologies and for work enablement.
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6. CRE Organizational Pressures of Today
Standardize
Processes
Improve
Improve
Service
Service
Delivery
Delivery
Customize
To Client
Specs
Reduce
Headcount
& Expenses
Add
Services
C R E
Cut
Cycle Time
Corporate
Real Estate
Demonstrate
Value Add
Daily Pressures
&
Ensure
Flexibility
Improve
Reporting
Increase
Customer
Satisfaction
Tighter
Controls
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Challenges
Page 6
7. Industry Trends: Emergence of Outsourcing
3 rd
All day-to-day operations directly
2009 - present
managed by one Service Provider
Generation
and RE & Facilities role is strategic .
Outsourcing
BPO
New cross functional solutions provided by
Evolution
2006 -2008
Integrate
2001- 2006
1995-2000
1990 - 1995
19801989
major players aligned with real estate
service providers
Outsource
Out Task
Self Perform
Within Service Providers across silo functions,
with business units, with shared services
Emergence of firms that manage out tasked
vendors or provide related services within a
single shop
Individual services like cleaning, security
One-off transactions or design work
Facility operations, cleaning, security,
food services, mail, project management,
brokerage done in-house
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8. Outsourcing Models – A Range of Options
Collaborative Alliance – Multiple Providers ensure business continuity/mitigated
risk; all use consistent processes, tools, performance measures & technology.
Strategic Alliance - Provider & Client change business paradigm to create a mutual
and competitive advantage, sharing risks and rewards.
Outsourced Partner - Performs all services for a function to the exclusions
of other providers with shared goals & Rewards.
Exclusive Provider - Performs one or more repetitive
functions under favorable terms on exclusive basis.
Preferred Provider - Provides repetitive service(s)
with favorable terms. May be one of many providers.
Service Provider - Provides discrete
contract-based service when and as needed.
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9. Industry Trends: What Companies Want
Streamline management of vendors: less = more
Benchmark data – thirst for more info/knowledge
Results – clearly documented, validated
Identify and develop potential risks/mitigation plans
Broad geographic and/or functional integration capabilities (fully
integrated/global)
Strategic Value - Thought Leadership to CRE
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11. Latest Trends in Outsourcing
New Models for Success
Vested Outsourcing – (“win-win” approach for both parties)
Low cost not always best
Who’s the Expert Here?
Transaction vs. Managed Services Contract
In-house turf wars need to be dealt with upfront
Consistency – keep Performance Mgmt. and Transition teams throughout contract
Proper incentive-outcome-based pricing model at start
SLA’s - Measurement minutiae – reduce to 5-10 key performance indicators
Metrics are meant for adjustments/improvements or get rid of them
Cisco’s Global Delivery Collaboration Model
Have best Playbooks/Technology used by all Service Providers
The “Integrator Model” – at Microsoft
One Service Provider manages all Tier One Providers for a Fee
RE&F – Role becomes Strategic/Planner/CRM to Internal Customers
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12. Presenting Our Distinguished Panelists
Mr. Chris Henderson, Sr. Director
Global Delivery – Cisco Systems
Mr. Brian Collins, Director
Global Workplace Strategies – Microsoft
Mr. Matt Werner , Sr. Managing Director
Global Corporate Services – C B Richard Ellis
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13. CHRIS HENDERSON – Senior Director
WPR Global Delivery – Cisco Systems Corporate Real Estate
Chris joined Cisco in 1996 and his responsibilities included:
Research Triangle Park, NC – Program Management
San Jose, Cal - Theater Director of Services
London, UK – Director - European / Emerging Markets
San Jose, Cal. – Advance Strategies
San Jose, Cal. – Global Delivery - Leading Facilities Management, Real Estate
Transactions and Capital Projects for Global Portfolio of 22M sq. ft.
International Experience – Team Transformation; Multi Cultural Teams
Chris was born in Nuremberg, Germany and has traveled to 35 countries.
Hobbies include: Cycling (century rides); Winemaking.
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14. BRIAN COLLINS - Director of Global Workplace Strategies –
Microsoft Corporation
Brian’s primary role is to define, communicate and implement
next generation of the Global Workplace Services Model in
Microsoft. Brian manages a set of services and resources to
support the global RE&F organization in managing its
workplace strategy and assets.
He is responsible for Microsoft’s ‘Workplace Advantage’
program; defining and driving Global Workplace programs,
including Research, Guidelines, Knowledge Management,
Project Consulting, Lab Strategies and Operations.
Brian has 18 years experience at Microsoft as FM Director for
Ireland, EMEA and Portfolio Manager for Central & Eastern
Europe
Brian graduated from the Dublin Institute of Technology.
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15. MATT WERNER , Sr. Managing Director
Global Corporate Services – CB Richard Ellis
» Matt Werner brings 18 years of experience in transforming
organizations, optimizing real estate portfolios, and reducing
occupancy operating costs.
» Since 2000, Matt Werner has been responsible for CBRE Global
Corporate Services (“GCS”) business development in the
Western United States.
» He has worked to develop long-term, integrated service solutions
for several organizations, including Cisco, Microsoft, HewlettPackard, Chevron, Union Bank, and McKesson.
» Matt is a member of CORENET, and he resides in Berkeley, CA.
In 2012, he was awarded by CBRE the Trammell Crow
Master Builder Award and the LMA Partnership Award.
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17. Change how we manage our business
• Enhance relevance to individual businesses while maintaining Cisco
enterprise view
• Develop and build organizational competencies
• Improve productivity and employee engagement
• Create an agile & globally scalable organization
• Define role clarity and efficient alignment of resources to business
needs and performance measures
• Assign ownership and accountability for process performance
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18. Cisco Global Resource Optimization
Process
Re-engineering
11
CONCURRENT
GOALS
Organizational
Re-definition
Supply Chain
Optimization
•• Reduce variability and
Reduce variability and
achieve standard
achieve standard
outcomes worldwide
outcomes worldwide
•• Maintain or improve
Maintain or improve
quality of delivery
quality of delivery
•• Consolidate and
Consolidate and
standardize WPR
standardize WPR
technology platform
technology platform
•• Maximize portfolio
Maximize portfolio
opportunities
opportunities
•• Shift “context” tasks to
Shift “context” tasks to
partners
partners
•• Resolve project delivery
Resolve project delivery
model
model
•• Consolidate partners/
Consolidate partners/
vendors
vendors
•• Reduce partner spend to
Reduce partner spend to
achieve cost savings
achieve cost savings
•• Procure the A-Team
Procure the A-Team
•• Seamless global
Seamless global
partnership
partnership
•• Maximize sourcing process
Maximize sourcing process
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19. TRANSFORMATION
LEGACY
•Inconsistent workflow processes
• E2E process mapping and
engineering
• Inconsistent job descriptions
• Increase span of control
• Significant job and role overlaps
• Define key inter-relationships
among job roles
• Bloated organization size
• Limited performance measures
• Lack of effective governance
•Gaps between organizational
needs and workforce capabilities
• Right-size org based on strategy
and benchmarking
• Create process owners and
process governance
• Aligned roles – removed the
gaps/overlaps/ambiguity
• Gain global consistency and
standardization
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21. Global RE&F Centers of Excellence
Guidelines, standards and Functional Subject
Matter Experts (SMEs). Provides consultation
and development global best practices for
local adaptation and vendor governance.
•Global Resources Team
• FM, D&D, RE, ES & Technology
• SRM & Global Programs
• Communications
•Global Workplace Strategies
• Workplace Research
• Design Guidelines
• Change Management
•Global Procurement Group
• Regional and Global Sourcing
Global Supplier Integrator
• Provide global accountability
of Service Delivery
• Industry leading processes, tools and
standard metrics reporting and KPIs
Regional and Local RE&F Professionals
CLIENT
SATISFACTION
• Client Point of contact
• CRM and business strategy
• Partner (MSIT, HR, FIN, CPG)
relationships
• Understand Business Needs
• Accountability for local
plans, solutions and services
• Inform, adopt, and adapt
global COE platforms to
local needs
• Innovate new best practices
Best-in-Class Providers
• By Geography and Function
• Project Management, Brokerage,
Integrated Facilities Management
22. •
•
•
•
•
•
•
•
Business Partnering
Partnering with HR, IT, Fin, LCA, GPG
Strategic Supplier Management
RE, PM, IFM, AWS - Platform Ownership in COE
Governance
Insight & Strategic Planning
Execution accountability
Industry leadership
•
•
•
•
•
•
•
Lease Administration
Tier 1 Contract Management
RE Planning
RE, PM, TM Service Oversight
Performance Systems
Portfolio Management
Infrastructure Management, Benchmarking
•
•
•
•
•
•
•
•
Transaction Management
Project Management
Design and Construction
Facilities Management
Energy Management
Food Services
Employee Services
Other user services
History of Outsourcing
What are the Keys to Success
Current Trends & Models
How does fit in with your future???
CoreNet Leader (Sept 2012) --- CRE role in 2020
Move from a Subj. Matter Expert to
Strategic Partner with BROAD
KNOWLEDGE of Biz Strategies that adds
value to the enterprise
Executive Summary – 5 key steps to achieving this..
1. Reducing Costs / Driving Productivity thru
Workspace
2. Align workplace design with Company strategy
3. Partner w/ key support functions
(HR/IT/Sourcing)
4. Two of four key steps involves OUTSOURCING
Outsourcing/Service delivery models/playbooks engrained in CRE
Essential to internal resources being refocused on strategic roles for company
CRE PRESSURES
Improve service delivery
Standardize Processes
Add Services
Cut Cycle Time
Add Value
Better reporting
Tighter Controls
Increase Customer SAT
Ensure Flexibility
Reduce Costs/Headcount
Better technology/metrics
History of Outsourcing over Past 30 years
Self Performance (1980 – 1989)
Out Tasking (1990 – 1995)
Outsource (manage out task vendors) (1995 – 2000)
Integrate (2001 – 2006) Service Providers work across silos w/ biz units & shared services
Biz Process Outsourcing (2006 – 2010) – new cross functional solution
3rd Generation – All services directly managed by Service Prov. – CRE strategic
Models – A Range of Options
Spectrum - shows a range of needs and contractual exclusivity/advantages
No one best model – each fits different needs and circumstance
Range is from more basic needs to more complex requirements
Clients Want:
Streamline mgmt of vendors
Benchmark !!!
Results – documented/validated
Risk – identify potential/create mitigation plans
Global & integrated
Thought leadership
REASONS OUTSOURCING CAN FAIL:
Unclear Expectations
Interests of Parties Misaligned over Time
Poor Governance
Poor Communications between both Parties
Not as much:
Poor performance
Not beneficial
New Models/Trends
Vested Outsourcing (win-win approach)
Low cost not always best solution
Who’s the Expert??
Turf Wars – Dealt with Upfront
Consistency – Keep Perf Mgmt/Transition teams thru contract
Incentive outcome-based pricing at start
Keep SLA’s to a minimum – 5 to 10
Metrics – adjustments for improvement or they go.
Collaboration Model – Cisco –best tech/process used by all
Integrator Model – Management by one Service Provider (Microsoft)
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Addresses - WHY CHANGE NOW
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Microsoft Real Estate and Facilities has been in a thoughtful evolution of our business since becoming a global organization five years ago. Focusing on our regional and local operating group partnerships, we clarified and streamlined interactions with MSIT, Security and CPG.
We implemented the Microsoft International (MSI) finance partnership model to bring consistency to processes and engagements with finance and business partners.
Since the stabilization of the economy, we have been able to turn our attention and bandwidth to plan and execute the next step in our continued evolution as a global RE&F organization.
We’ve implemented first Client End User and Business Client Satisfaction Survey,
Improved our Global Business Model (which I will speak to further) by Strengthened the Global Center of Excellence governance Platform and Implementing the “B3” Supplier Delivery model
And we are in the process of further enabling the a global business through defining Global Metrics and Benchmarking and implementing an Enterprise Technology Platform.
Through out goals have been to maintain regional accountability and increase our capabilities to do things faster and more consistently with global predictability.
This latest phase in our organizational development will bring us closer to the globally aligned business our teams, partners and clients have asked for.
And ultimately providing trusted leadership- being relied upon by our partners and clients for business & subject matter insight and leadership to deliver successful outcomes for the company
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Slide has animation
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Animation 1:
B3 is a global initiative to evolve our vendor model.
The New Global Delivery Supplier model is a part of an our RE&F ecosystem to deliver on client satisfaction
The goal is an RE&F function that is more effective in service delivery and strategic in supporting our client’s business goals and provides greater value both globally and locally to the company and clients.
It is a direct outcome of feedback from our RE&F clients and employees to provide more consistent and improved delivery, deliver improved communications, and spend more time on strategy and planning.
Animation 2: (COE)
Our new vendor model is supported by Centers of Excellence Global Platform providing governance, guidelines, standards and subject-matter experts covering the spectrum of RE functional services, workplace strategies and procurement practices.
Animation 3: (Delivery)
The new model will implement a global program management vendor which will be responsible for coordination and integration of underlying service providers.
This Integrator Model provides the advantages of a single platform for RE&F to manage globally consistent processes and outcomes, while bringing best in class delivery to our clients on a local basis.
Animation 4: (Regional and Local Teams)
Our regional and local RE&F professional will remain the primary point of contact for the business…providing greater focus on CRM…..<Walk through the points and highlight or call out additional areas that my resonate with the specific client>
Ultimately, the result will be a more strategic alignment of the portfolio with the needs of the business and improved delivery performance and costs.