*Strategic Facility Planning, IFMA World Workplace
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Bob Sawhill\’s presentation at IFMA\’s World Workplace Conference. Titled: Strategic Facility Planning: "Get out of the weeds, and align your workplace with your business’ needs"
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*Strategic Facility Planning, IFMA World Workplace
- 1. Strategic Facility Planning: Get out of the weeds, and align your workplace with your business’ needs Bob Sawhill, CFM Director of Product Strategy, TRIRIGA CEU/CFM Code: 508SS
- 4. the situation … Get out of the weeds, and align your workplace with your business’ needs
- 5. Real estate assets are a cornerstone to success 1 Source: CFO Research Services 2 Source: NACORE 20% of an organizations income statement are real estate and facilities expenses 35% of an organizations balance sheet assets are real estate and facilities 48% of an organizations greenhouse gas emissions are produced by buildings
- 6. Real estate executives support multiple objectives Stakeholders Objectives Drive Performance Growth and Competitive Advantage Cost and Financial Impacts Operational Efficiency & Organizational Effectiveness Service Delivery and Service Costs Increased Profit Time to Market Carbon Emissions Talent Retention Budget Adherence Occupancy Costs Lease Flexibility ROI Space utilization Process Cycle Times Service Productivity Schedule adherence Work Environment On-time delivery Chargebacks CEO CFO COO Business Unit Head
- 7. The challenge Process silos Emergencies Business Environment Economy fluctuating Globalization Offshore Risk and uncertainty Mergers & Acquisitions Reorganizations Perceptions: - Order taker vs. advisor - RE cost of doing business vs. strategic asset Internal politics Balancing act: Resources Scope Time Juggling Act: Cost Reduction Capital Investment Environment Changing Workforce Outsourcing Aging Bldgs Technology advances Lack of resources Disparate Systems
- 9. current trends in Strategic Facility Planning out of the weeds
- 11. IFMA Research – Current Trends & Future Outlooks
- 12. The missing link: strategy misalignment Maximum Wealth of Shareholders Corporate Strategy Source: CFO Perspective on Real Estate, 2003, USI Corporation of organizations report workplace assets and operations are misaligned and not integrated with the overall business strategy > 60%
- 14. Strategic Facility Planning evolution Integrated Infrastructure, Enterprise Knowledge Integrated Workplace Management Systems (IWMS) Point Solutions CAFM, RE, CMMS, PM, AEC, … Leading indicators Time-based utilization Future plans and assignments Space allocation, current situation Project Portfolio Management Program-based Project-based Optimize: work/worker/workplace collaboration, teams, environment People-centric anywhere, anytime, anyplace Place-centric building, space, asset Global Enterprise Regional Division/Business Units Departmental Floor Plan Integrated Infrastructure Workplace Solutions Space Plan Break-through strategies Continuous process improvement ‘ Survey says’ Agile Adaptive, flexible Responsive Performance Management Key Performance Indicators Status Reports Strategic Workplace Framework Linked strategic initiatives, tactics Service fulfillment targets Predictive Proactive Reactive Optimal solutions Effective balance Efficient operations Value focus Productivity focus Cost focus Visionary - Strategic Workplace Planning Evolving - Strategic Facility Planning Traditional - Space Planning
- 17. Leading workplace management organizations are transforming capabilities from task master to strategist Collaborative Strategist Capability Maturity >> catalyst role optimal value & performance business investment Workplace Trusted-advisor Order-taker enabler role value focus business expenses caretaker role task efficiency facility expenses Workplace Management Evolution >> Traditional Future Organizational Effectiveness
- 21. Performance Management delivers continuous improvement through the lifecycle Align. Establish Objectives (Workplace Performance) Records Objectives Analyze. Evaluate Outcomes (Workplace Performance) Delivers Reports and Alerts Analyzes and Measures Outcomes Prioritizes Improvements Act. Improve Operations (Workplace Performance) Applies Improved Processes Infuses New Objectives, Changes Objectives, Processes, or Seeks New Data Processes IWMS Work Manage Operations (Workplace Operations)
- 25. Linking RE/FM to business strategy Align strategy Anna-Liisa Lindholm et al., “A Framework for Identifying and Measuring Value Added by Corporate Real Estate”, FMLink , 2006
- 26. Performance Management Cascade objectives down to drive accountability Performance Targets CFO VP Workplace Facilities Manager Increase Company Profitability by 2% Reduce Workplace TCO by 10% Increase utilization by 20% Align strategy
- 28. Workplace Performance Analytics balance utilization opportunities to right-cost facilities Optimize planning Financial – Operating Cost (Actual vs. Budget) Portfolio – Workpoint Utilization Operational – On Time Service Responsiveness Customer – Services Satisfaction Environmental – Carbon Emissions / GSF
- 30. Facility Planning and Analysis matches business demand to the right-space Optimize planning
- 31. Facility Planning and Analysis seeks solution scenarios at the right-place Optimize planning Emissions /GSF Dallas-Campus Emissions /GSF Emissions /GSF
- 32. Facility Planning and Analysis seeks solution scenarios at the right-place Optimize planning Stack Planning
- 33. Facility Planning and Analysis seeks solution scenarios at the right-place Optimize planning
- 34. Facility Planning and Analysis determines RE Portfolio solutions for the right-time Optimize planning
- 35. Facility Planning and Analysis determines RE Portfolio solutions for the right-time Optimize planning
- 36. Facility Planning and Analysis determines RE Portfolio solutions for the right-time Optimize planning
- 37. Facility Planning performance indicators align designs to attain strategy objectives Optimize planning
- 39. Launch the right programs Optimize planning Low High Low High Good-to-Go high value, low risk Retarget Rethink, or cancel Postpone Risk – ability to execute Business Value mitigate risk focus scope Adapted from: R. Napier, “The Role of Governance and Program Management in the CIO Office, HP CIO Summit, 2003
- 40. Prioritize quick-wins Optimize planning Low High Low High Quick Wins Low Hanging Fruit Money Pits Must Haves Ease of Execution Business Value Prjct #1 Prjct #3 Prjct #2 Prjct #4 Prjct #6 Prjct #7 Prjct #8 Prjct #9 High Value Low Resource Effort
- 41. Prioritize opportunities Replace inefficient plumbing fixtures Re-carpet with low emissions carpet Replace outdated water heaters HVAC systems tuning Insulation projects Re-lamp portfolio Net Present Value Optimize planning
- 42. Evaluation and compare scenarios to support informed decision making Optimize planning
- 43. Evaluation and compare scenarios to support informed decision making Optimize planning
- 45. Complete the cycle – monitor and measure Workplace Performance Management continuous improvement and business planning cycles A lign Strategy Optimize Planning Manage Delivery past performance | future plans
- 48. Strategic Facility Planning Framework Integrated Methodologies Across the Process Lifecycle - Manager, Technician, Specialist - Workplace Consumer - Remote worker - Manager, Planner, Consultant - Business Unit Manager - Third-Party Suppliers/Partners - Executive, Partner, Advisor - CEO, CFO, COO, … - Strategic Business Partners Primary Roles, Stakeholders - Move Services - On-boarding, Provisioning - Site Services - Maintenance & Operations - Lease Administration Space Planning & Analysis: - Forecasting, requirements - Supply vs. Demand - Stacking, Blocking - Move Sequencing, Planning - RE Transaction Management - Bldg System Capacity Analysis Function Specific Processes - Customer Surveys - Change Management - Account Management - Requirements Forecast - Iterative feedback - Strategic Needs Assessment - Workplace Solution Fit/Gap - Interview, Survey, Evaluate Customer Relationship Management - Business Intelligence - Ad-hoc Reporting Evaluate Scenarios, Options: - Strategic Fit Rating / Compare - Financial Evaluation / Compare - Qualitative Rate / Comparison - Risk, Sensitivity Analysis Analyze/ Define/ Set: - Funding, Financial targets - Resource Investment Decision Support Systems Project Management: - manage scope, time, cost - manage plan execution - evaluate spend Program Management: - Prioritization - Plan Projects, Resources - ROI, Risk Analysis Portfolio Management/Planning: - Portfolio Balancing - Analyze/Set Resource Mix - Investment Analysis Project/Program Portfolio Management, Service Portfolio Mgmt. - Monitor & Evaluate - Scorecard, Metrics - Analysis, Corrective Action - Planning Metrics & Indicators - Embedded Planning Analytics - Performance-based Evaluation - Access Opportunities - Align Goals to Strategy - Set Metrics, Thresholds Workplace Performance Management - Performance Management (see below) - Assess Plan of Record Gaps - Establish Programs & Tactics - Bottoms-up Prioritization - Assess Situation, Opportunity - Set Objectives, Strategies - Tops-down Initiatives, Goals Strategic Planning Manage Delivery -Implement workplace plans -Manage service delivery -Monitor & evaluate performance Optimize Planning - Analyze & optimize scenarios - Align, design, and refine plans - Evaluate & decide on the plan Align Strategies - Access opportunities - Adapt strategies - Define solution goals Process Group > Methodology:
- 50. Strategic Facility Planning Keep on-track, and stay out of the weeds
- 54. Achieve greater workplace performance results Facility Management Strategic Workplace Planning Workplace Performance Management VALUE Improves operational efficiency and organizational effectiveness Increases financial return Increases shareholder value
- 55. Contact Information: Bob Sawhill, CFM Director, Product Strategy TRIRIGA Email: [email_address] website: www.tririga.com visit us at booth 2540
- 56. Strategic Facility Planning: Get out of the weeds, and align your workplace with your business’ needs Bob Sawhill, CFM Director of Product Strategy, TRIRIGA CEU/CFM Code: 508SS
- 60. Project Portfolio Management (PPM) Diagram source: ProjectConnections.com PPM Project Funnel and Pipeline – Align and Optimize Align strategy
Editor's Notes
- With 30 years of experience, Bob Sawhill has a broad background in Workplace Management and Information Technology. He has attained deep-level expertise through hands-on experience in Facility Planning and Integrated Workplace Management Systems. Bob is currently Director of Product Strategy at TRIRIGA for their Integrated Workplace Management Systems and Strategic Facility Planning product. His career has included a variety of Facility Management positions with Hewlett-Packard, USAA Insurance, Tektronix, and Lockheed-Martin. As well, Bob has contributed to Facility Management education as instructor and guest lecturer for several terms at California State University, Sacramento.. Bob Sawhill has been active in IFMA for 18 years, as a past Chapter President, Information Technology Council programs leader, and has earned IFMA’s Certified Facility Manager (CFM) designation for 14 years.
- What is SFP – background Evolution, Maturity of SWP/SFP Guiding principles, … Org Ex Process & Tech Process Methodology- wpm, ppm, planning analytics Tech – Follow principles- integrated,, perf, Yet, not just follow, enable - info soph, agility, dec sppt iwms, bi, wpm, km, crm
- The largest contributor CFOs and financial executives increasingly view an organizations real estate portfolio as a strategic asset, one that if managed actively adds significant value to an organization’s financial performance. Real estate has always been critical to the financial success of any organization, but never has it received the focus of attention from senior executives as it has today. The main reason for this is simple: they are now legally accountable for the financial results, to which real estate strategy contributes significantly. Secondly, real estate and facility assets rank in the four highest costs of business within most organizations, they are the greatest long-term liability and are typically 35% of most organizations’ balance sheet. Due to the magnitude of the investments involved, even small variances in real estate costs impact an organization’s balance sheet more readily than depreciation or amortization. Furthermore, environmental sustainability has captured the attention of senior executives within many organizations today. They recognize the bottom-line benefits of improved social responsibility, environmental protection and improved financial performance. U.S. Energy Information Administration data conclude that buildings consume the largest share of total energy and produce the majority of green house gas emissions. This research also finds buildings have the highest growth in CO2 emissions since 1960.
- Who takes the heat? As a result of the significant impact real estate has on the financial and environmental performance of an organization, senior executives now view real estate as a rising priority that must be addressed. Today, typical reporting structures place the real estate function under the C-suite of the organization, which requires workplace executives to serve as fiduciaries to the organization. In this capacity, real estate executives actively reduce costs of operation to improve income statement impacts and increase asset effectiveness to improve the balance sheet contributions. Many organizations now generate top-line improvement in their financial performance by utilizing sale-leasebacks as a source of capital to increase revenues. Meanwhile, the recent global real estate dynamic, which has seen rental rates escalate also provides some organizations the opportunity to sublease excess space to generate revenue. By renegotiating lease agreements, disposing of underperforming assets, terminating underperforming leased locations and implementing tighter financial controls, organizations are able to reduce real estate expenses. Furthermore, as fiduciaries, real estate executives must also focus on compliance. SOX and Basel II require transparency of activities that have ‘material’ impact on financial reports. As the largest long term liability of a corporation, real estate costs must be reported to the financial regulatory agencies such as the SEC.
- Inadequate technologies While workplace executives’ accountability to their organizations has increased, many use inadequate tools and technology to effectively assess, evaluate and reduce their organizations’ environmental impact. Workplace executives depend on disparate databases and systems that lack the information and tools to accurately measure the carbon footprint of workplace assets to create and drive progress to meet environmental sustainability corporate goals. Silo-oriented resources and technologies such as LEED (Leadership on Energy and Environmental Design) certification checklists, home-grown Excel-based return-on-investment and carbon calculators do not provide the means to effectively manage and achieve an environmental sustainability strategy. These complex expensive tool-based approaches do not provide accurate timely data to analyze the environmental impact of workplace assets and operations, to identify environmental opportunities and lastly to reduce energy consumption and greenhouse gas emissions. Multiple data bases, Complex and manual methods to gather Data, measure carbon footprint
- Increase shareholder value and achieve enterprise strategies by driving right-cost portfolios, productive work environments, and improved delivery performance * ALIGN Strategies – integrated collaborative strategic planning drives business alignment and value * OPTIMIZE Plans - performance-based planning analytics drives effective workplace solutions MANAGE Delivery – integrated adaptive lifecycle management achieves agile and effective execution
- Workplace Executives Lack Critical Tools A CFO Research Services survey 1 of financial executives concludes that real estate is an essential component of an organizations ability to achieve its strategic plans. However, sixty percent of respondents felt that real estate and corporate strategies were misaligned. Senior and financial executives now demand better insight into the business performance of the real estate department. Meeting these demands calls for a detailed level of analysis into financial and operational information from across the organization that few executives have today. Although workplace executives’ accountability to their organizations has increased, most organizations approach the greatest opportunity to positively affect the balance sheet, or mitigate one of their largest expenses on the income statement, with inadequate technologies such as spreadsheets designed to replace financial ledgers. Workplace executives depend on disparate databases and fragmented systems that lack the information and tools to align workplace processes, analyze the performance of workplace assets and operations and drive action to meet financial goals. Workplace executives need different technologies from transactional systems used to support delivery of workplace services.
- This table summarizes the emerging thinking and the evolution of Strategic Facility Planning objectives, methodologies and practices, which are contrasted in their transitional stages. Strategic Facility Planning has been around for decades; however, it has evolved into a richer set of capabilities. Improved methodologies, organizational maturity, and advancing technologies have improved over the years to meet increasing needs of business enterprises and evolving workplace management. Thus, new opportunities exist to extend traditional space planning and RE portfolio planning to a more comprehensive cross-functional process to seek new levels in value-add and increased performance. To reflect this evolution and transformation, many have coined new terms; such as, Strategic Facilities Master Planning, Strategic Workplace Planning, Holistic Workplace Planning, and Real Estate and Facilities Lifecycle Management. For the sake of terminology standardization and minimizing buzz-word proliferation, this paper and presentation will use the common term used by IFMA ‘Strategic Facility Planning’ with the implied sophistication of: Holistic Integrated Strategic Workplace-Infrastructure-Enterprise Optimal Master Planning Lifecycle .
- What is SFP – background Evolution, Maturity of SWP/SFP Guiding principles, … Org Ex Process & Tech Process Methodology- wpm, ppm, planning analytics Tech – Follow principles- integrated,, perf, Yet, not just follow, enable - info soph, agility, dec sppt iwms, bi, wpm, km, crm
- Provide a structure for selecting the right projects and eliminating wrong ones Allocate resources to the right projects, thus reducing wasteful spending Align portfolio decisions to strategic business goals Base portfolio decisions on logic, reasoning, and objectivity Create ownership among staff by involvement at the right levels Establish avenues for individuals to identify opportunities and obtain support Help project teams understand the value of their contributions
- Reduced Expenses With real estate costs escalating as a result of the real estate boom, expense management has become critically important to retailers. TRIRIGA for Retail ™ reduces overall real estate expenses by as much as 5%. TRIRIGA for Retail ™ r educes real estate costs by notifying legal rights within lease clauses. Critical date alerts identify opportunities to secure below market rates, identify legal options to exercise and vacate under-performing locations, and reduce lease costs by preventing CAM / OPEX overpayments. TRIRIGA for Retail ™ r educes construction costs with improved cost forecasts and reports. Create project budgets from analogous stores and historical projects, the project cost summary report shows health of budget in real-time, and potential change orders warns against potential impacts. TRIRIGA for Retail ™ r educe facility costs through better vendor and asset management. Landlord and vendor invoice audits prevent overpayments, Preventive Maintenance extends the life of critical assets and equipment, and Condition Assessment helps prioritize capital investments for remodels.
- Manage Environmental sustainability requires a system that identifies and evaluates opportunities to improve energy efficiency and energy savings across the real estate portfolio. TREES compiles and compares those opportunities across the real estate portfolio to optimize capital spend, financial return, and societal value. TRIRIGA Facility Assessment collects and identifies environmental opportunities for existing buildings in the portfolio. TRIRIGA Energy Value Calculator includes Energy Star calculations to estimate and identify energy opportunities for the highest energy savings points, impact on carbon footprint and overall savings. TRIRIGA Energy Opportunity Summary prioritizes environmental opportunities across the real estate portfolio based on the Energy Value Calculator results.
- What is SFP – background Evolution, Maturity of SWP/SFP Guiding principles, … Org Ex Process & Tech Process Methodology- wpm, ppm, planning analytics Tech – Follow principles- integrated,, perf, Yet, not just follow, enable - info soph, agility, dec sppt iwms, bi, wpm, km, crm
- In Summary You have the ability to achieve environmental sustainability with your organization. With TREES, you can reduce your organization’s environmental footprint, and still achieve greater financial performance results today. Contact TRIRIGA now to find out more on how TRIRIGA Real Estate Environmental Sustainability can help you. TRIRIGA 6700 Via Austi Parkway Las Vegas, NV 89119 USA (702) 932-4444 (888) TRIRIGA www.tririga.com