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Cushman & Wakefield- Smarter Procurement to Drive Corporate Growth (IASTA webcast)

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  • 1. Smarter Procurement to Drive Corporate Growth A Partnership © Joanna Martinez, May 2012, All Rights Reserved
  • 2. Overview• Cushman & Wakefield, a privately held company, is one of the world’s largest commercial real estate services firms with brokerage, facilities management, consulting, capital markets, and other services.• The company was founded in 1917 and the firm’s largest shareholder is Exor, the investment arm of the Agnelli Family.• Cushman & Wakefield currently has 231 offices in 58 countries, and 13,000 talented professionals.• Cushman & Wakefield was named the exclusive leasing agent for 1 World Trade Center, the Freedom Tower, by the Port Authority of New York and New Jersey. The Freedom Tower, will total 2.6 million square feet upon its completion in 2012. © Joanna Martinez, May 2012, All Rights Reserved
  • 3. Facilities Management Trends• Facilities Management is evolving from localized building management and office services to a centralized workplace solution• Sourced through corporate procurement groups and/or consultants• Focus on operational and performance management to deliver best in class price points and service delivery levels. Major changes in FM include: – Investments in energy and utility management – Expanding scope – Focus on enterprise goals • Sustainability and LEEDs mandates • ISO compliance • Diversity – Risk Management © Joanna Martinez, May 2012, All Rights Reserved
  • 4. Many Standard FM Services and Resulting Skill Sets are NotNecessarily Procurement Core Competencies  Critical Systems  Compliance & Regulatory  Energy Management Management  EH&S Administration  Emergency Preparedness  Sustainability Program  Work Order Management  Financial Management &  Predictive Maintenance Reporting  Housekeeping  Office Support Services  FM Staff Development  Knowledge of building codes  Project management, and and regulations, and how they differ across the globe resulting partnerships with GC’s, subecauseontractors But our core competencies are complementary, and by working together we can do a faster, more effective job for our clients and our suppliers © Joanna Martinez, May 2012, All Rights Reserved
  • 5. The Circle Charts: Partnering to Better Serve our ClientsFormer Process FM Professionals Purchasing RFI, RFP Spot Buys for Corporate Spend Supplier Selection Negotiations ? Transactional Processing Order Entry Ongoing SRM Delivery TrackingCurrent Process FM Professionals Supplier Evaluation Corporate Sourcing Business Requirements Sourcing Strategies Procurement Tools and Techniques Detailed Specifications Negotiations Manage Strategic Sourcing Process Scope of Work Total Cost Analysis & Measurements Contracts Final Decision Category Management Supplier Mgmt © Joanna Martinez, May 2012, All Rights Reserved
  • 6. What Happens When a New FM Account Relationship Begins?FM Action Related Procurement Competency• Manage people transition • Contract Management Systems• Organize contracts and understand key expiration dates © Joanna Martinez, May 2012, All Rights Reserved
  • 7. Contracts Management Benefits How a Contract Management System helps the Strategic Sourcing process: • Automated alerts and reports on contract expiration. • Captures payment terms to support early payment discounts • Provides visibility to supplier rationalization options • Helps the accrual process by providing visibility to contractual commitments • Assists in assessing compliance to signatory policy • System features help employees know where to go for purchases • Improves planning: - Workload management - Business cycles (union contracts, energy peaks, etc.) © Joanna Martinez, March 2012, All Rights Reserved © Joanna Martinez, May 2012
  • 8. A Contract Management tool can be a powerful asset and a “To-Do” list for years to come Number of Contracts Archived10000 Information = Sourcing Projects 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Feb Mar Apr May Jun Jul Aug Sep Oct No7 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct• Note: The trend line indicates the number of contracts identified, including contracts in queue. © Joanna Martinez, May 2012, All Rights Reserved
  • 9. What Happens When a New FM Account Relationship Begins? FM Action Related Procurement Competency • Manage people transition • Contract Management Systems • Organize contracts and understand key expiration dates • Global processes and linkages • Assess for cost reduction opportunities © Joanna Martinez, May 2012, All Rights Reserved
  • 10. Procurement Understands Global Relationships …and understands that not all spends should be global Global Client Preference Global Maintenance Help Desk Elevator Maintenance Suppliers ability to deliver Local Regional Security Lease s MRO Local Specific Generic Business Needs © Joanna Martinez, May 2012, All Rights Reserved
  • 11. What Happens When a New FM Account Relationship Begins?FM Action Related Procurement Competency• Manage people transition• Organize contracts and • Contract Management Systems understand key expiration dates• Assess for cost reduction • Global processes and linkages opportunities• Support facilities on behalf of • Different sourcing approaches the client • Automate/ apply sourcing tools• Manage projects on behalf of to the general contractor the client relationship © Joanna Martinez, May 2012, All Rights Reserved
  • 12. Corporate Procurement Supports Facility Management Supported the facility management sourcing team consolidation for the integration of two large banks.  Team charter, spend analytics, supplier leverage opportunities Utility company used eProcurement tools to speed up NDA process for 30 potential vendors Large bank reduced cost audio conferencing via benchmarking Created a client specific Contract Management System template as part of new client on- boarding.  Allowed facility teams to quickly identify sourcing opportunities Enabled advanced negotiation tools to allow immediate pricing feedback to suppliers.  Immediate Pricing Feedback Tool – eProcurement tools for General Contractors to obtain “Best and Final” Pricing  Dynamic Bidding – spreadsheet bidding over several day to allow subecauseontractor input/ participation © Joanna Martinez, March 2012, All Rights Reserved
  • 13. Savings Beyond Standard General Contractor Methods Budget Actual Savings % Savings Electrical $270,000 $229,588 $ 40,412 15% Doors Frames Hardware $170,000 $132,000 $ 38,000 22% Glass Glazing $100,000 $89,500 $ 10,500 11% HVAC $146,000 $157,900 $ (11,900) -8% Drywall Accoustical $205,000 $140,500 $ 64,500 31% Paint Wallcover $60,000 $49,000 $ 11,000 18% Flooring $140,000 $138,500 $ 1,500 1% Millwork $140,000 $116,000 $ 24,000 17% Mechanical $1,400,000 $1,224,765 $ 175,235 13% Electrical $1,300,000 $1,175,000 $ 125,000 10% Drywall $700,000 $574,615 $ 125,385 18% Computer Flooring $146,000 $138,730 $ 7,270 5% Paint $98,000 $73,900 $ 24,100 25% Millwork $85,000 $76,000 $ 9,000 11% Cabling $592,000 $522,382 $ 69,618 12% Furniture - new $1,847,850 $1,129,616 $ 718,234 39% Car Parks - 300 $600,000 $443,000 $ 157,000 26% Carpeting $277,500 $198,860 $ 78,640 28% Carpet II $580,000 $385,000 $ 195,000 34% Movers $120,000 $55,453 $ 64,547 54% Dallas Office VOIP $165,000 $147,000 $ 18,000 11% Glass Door & Glazing $124,000 $117,500 $ 6,500 5% Ceiling $215,000 $143,000 $ 72,000 33% Telecom Software and Hardware $335,000 $261,000 $ 74,000 22% Total $9,816,350 $7,718,809 $2,097,541 21% © Joanna Martinez, March 2012, All Rights Reserved
  • 14. C&W’s Reverse Auction Tool C&W’s Immediate Feedback Pricing Tool C&W’s Online Pricing ToolELECTRICAL © Joanna Martinez, May 2012, All Rights Reserved
  • 15. C&W’s Online Pricing Tool: Back and Front Covers
  • 16. Some other thoughts… © Joanna Martinez, May 2012, All Rights Reserved
  • 17. We found a place with no gatekeeper: The Process Itself! OPPORTUNITY ANALYSIS High Level Potential Cost Improvement High Category Improvement Creative Solution Opportunity Opportunity 20%+ 10%+HistoricalProcurement Significant Benefit Strategic Sourcing ProcessExpertise and Opportunity OpportunityEffort 40% + 30%+ The Process… Low Low Category Content and Technical High Knowledge © Joanna Martinez, May 2012, All Rights Reserved
  • 18. And we applied the “Captain Cook” method of sourcing engagement © Joanna Martinez, March 2012, All Rights Reserved © Joanna Martinez, May 2012
  • 19. …Skip the obstacles and go back later Portfolio Professional fees Rent Capital Print and Fulfillment MRO Travel Tech - Maintenance, Leases Recruitment, Training, Outplacement Office Equipment & Services Telecom Tech - Consulting Meetings T&E Promotions and Servicing Misc. Employee Benefits Employee Fringes Misc. Business Fees Sourceable Spend © Joanna Martinez, May 2012, All Rights Reserved
  • 20. … because you can build a “tidal wave” of Justification. Annualized Value of Cost Reductions (P&L and non-P&L) $ Start Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 © Joanna Martinez, May 2012, All Rights Reserved
  • 21. Global HQ European HQ 12800 N. Meridian St. Hartham Park Suite 425 Corsham, Wiltshire Carmel, IN 46032 SN13 ORP United States of America United Kingdom Operations: 317.594.8600 Operations: +44 (0) 870.199.4060 Sales: sales@iasta.com Sales: +44 (0) 1249.700726 eSourcing | wiki eSourcing | forumwww.eSourcingWiki.com www.iasta.com www.eSourcingForum.com Iasta Alliance Group www.Twitter.com/Iasta www.LinkedIn.com Copyright © Iasta, All Rights Reserved